Trump Admin Is Cracking Down on the Entertainment Industry
Recently, the Trump Department of Justice, headed by Attorney General William Barr, took significant action against Live Nation Entertainment — a titan of the music industry that was found to be rigging what is supposed to be a free marketplace.
Knowing the predatory history of Hollywood and the leftist entertainment industry in general, the DOJ in 2010 put Live Nation under antitrust orders before it acquired ticketing giant TicketMaster.
Those orders, known as consent decrees, forced it to abide by certain terms in order to protect consumers. The most significant stipulation prevented the company from threatening to withhold touring events from specific venues that refused to renew their contracts with Live Nation.
Eventually, the DOJ found that the music giant had been ignoring the consent decree. Hailing it as “the most significant enforcement action of an existing antitrust decree by the Department in 20 years,” the department strengthened the consent decree and threatened that further violations would subject the company to an automatic penalty of a whopping one million dollars.
Reasonable people can agree to disagree on the need for the DOJ to crack down on Live Nation, but one thing is for certain: The department isn’t wrong for erring on the side of caution when it comes to the entertainment industry.
The Hollywood and New York show-business scene has long been known to attempt to squash its competition through sheer force and collusion. Based on what Live Nation had attempted to do in this case, strengthening its consent decree was the right thing for the DOJ to do.
After all, Live Nation has grown into a monopoly that controls over 80 percent of the market, and there is no harm in deterring it from engaging in anti-competitive behavior in the future. Now the DOJ should probably focus on doing the same thing with some of the other Hollywood monopolies that are on its radar.
For example, the DOJ is currently reviewing the consent decrees imposed on two companies known as ASCAP and BMI. While most people outside of the music scene probably haven’t heard of the American Society of Composers, Authors and Publishers or Broadcast Music, Inc., like Live Nation, both organizations hold tremendous power over the pricing and accessibility of music for consumers.
Together, ASCAP and BMI manage the public performance rights of about 90 percent of all the music Americans hear today. Essentially, nearly all music heard in America is licensed through those two entities, forming what is tantamount to a cartel-like system of music providers, and, like any other cartel, if left undeterred, ASCAP and BMI would run roughshod over the entire music industry. This would wind up leading to higher prices being charged for the use of music nationwide.
Luckily, just as with Live Nation, consent decrees exist to keep the anti-competitive ambitions of ASCAP and BMI at bay.
To prevent the two organizations from gouging music consumers with absurdly high prices, the DOJ established a system in which any company can acquire a license to perform all their songs for a set, flat rate. That way, businesses and consumers are protected from any cartel-like price manipulations.
But, following the industry’s trends, ASCAP and BMI have often not obeyed these DOJ agreements.
In fact, in 2016, ASCAP had to pay close to $2 million in fines to the DOJ for doing just that. And so, while the DOJ is in the middle of reviewing its consent decree arrangements, it should consider doing exactly what it did with Live Nation – strengthening enforcement mechanisms by upping penalties to provide more deterrence for future anti-competitive behavior.
In cases where power has been overly consolidated in any given industry, consent decrees are necessary.
In conjunction with proper enforcement from the DOJ, these decrees stop industries from descending into monopolistic chaos. They function as a bulwark against the formation of domestic cartels while preventing all the price gouging, anti-competitive tactics and consumer harm that are synonymous with a monopoly.
In short, the Trump DOJ is doing the right thing in reviewing these arrangements and it must use every tool it has to ensure conglomerates like Live Nation, ASCAP and BMI do not raise the cost of using music to everyone’s detriment.
That is a song I think we can all sing along with.
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