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Google’s Justice Department to Interfere with a Century of Private Contracts

June 30, 2016
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Renata B. Hess, former Lawyer for Google and Head of the Antitrust Division’s Attack Plan on Songwriters

According to Billboard, the Google Justice Department has decided to impose on songwriters a government order that songwriters didn’t want, has never been the business practice and will increase transaction costs on the one thing that is working well in online music licensing: blanket performance rights licenses.

[The Department of Justice] is moving ahead with its interpretation that the two PROs must use 100-percent licensing and can no longer engage in fractionalized licensing — meaning that any rightsholder in songs with multiple songwriters, who may be represented by different PROs, has the right to license the entire song to a user, as long as he accounts to and pays the other songwriters.

At the very least, music publishers fear that this change will lead to reduced royalty rates for songwriters because it will allow music services to rate-shop among the licensors for the lowest rate. Publishers also say that songwriters may end up making different amounts for songs: For instance, they could be hit with double service charges if they weren’t the party to license the song. Also, PROs and publishers wonder if the financial ramifications of this ruling will cut down on collaborations, with some writers choosing only to collaborate with writers within their own PRO.

I’m still trying to figure where this ridiculous idea came from, but it definitely didn’t come from any music publisher.  The DOJ would evidently like us to believe that it hit them like Paul on the road to Damascus.  We’ll see what the record actually shows about this, but the only one that will be helped by this “interpretation” is anyone who wants to destroy PROs and blanket licensing.

Namely Google.

Google White House Meetings

Not only will this absurd “interpretation” impose rules on songwriters that have never been even thought of before by the all-powerful U.S. government, the Department of Justice is unilaterally interfering with every joint administration agreement ever entered into by songwriters or music publishers in which the writers agreed to administer their own shares.  That’s literally hundreds of thousands, if not millions, of private contracts going back 100 years.

It will also potentially destroy valuations attributed to publishing catalogs–as if songwriters haven’t already been crushed by the Department of Justice’s utter failure to protect the property rights of American citizens from piracy.

Of course, songwriters now have to decide if they will fight this issue in court, at great expense, probably millions in legal fees fighting the government’s bottomless pit of lawyers at the Department of Justice.

This decision must become a campaign issue.  The DOJ is an executive branch agency, and this issue is unlikely to be resolved before the next President takes office.  You must ask your candidate whether they will permit the DOJ to run roughshod over songwriters and music publishers and whether the candidate will instruct the DOJ to keep their sticky fingers out of private contracts where they are not invited.

Why?  Because if a private corporation like Google can influence the Department of Justice to this degree, there’s no stopping them.

And they will keep sticking it to us until someone gets unelected.

If they can do this, they can do anything.

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