Coalition Warns of Anti-Competitive Provision of Music Modernization Act

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Posted on July 23, 2018 by

For Immediate Release
Monday,  July 23, 2018

Coalition Warns of Anti-Competitive Provision
of Music Modernization Act

(Washington, D.C., Monday, July 23, 2018) The Center for Freedom and Prosperity led a coalition of free market organizations in a letter to Senate Judiciary Chairman Chuck Grassley outlining concerns with a provision of the Music Modernization Act (MMA). The MMA is comprised of a number of bills reforming various aspects of music copyrights, such as the distribution of royalties from digital services. Reform and modernization of federal music copyright law is long overdue, but one provision of the MMA conflicts with free market principles.

Our coalition letter reads:

“The MMA intends to ensure songwriters are compensated by digital music services in a timely manner for uses of their works. We support this overall objective. However, we are concerned that the creation of the Mechanical Licensing Collective (MLC) would short-circuit a spirited marketplace, undercut competition, and grant unprecedented power to a handful of decision-makers.

The MLC represents a continuation of the same interventionist approach that has proven inadequate. Usefully, it calls for the creation of a comprehensive database of music copyright holders, though it lacks funding for the project. Unfortunately, it also links the database with the functionality of a collective rights organization empowered to grant licenses, receive royalties, and remit payments to rights holders. In doing so, the MLC repeats past mistakes by relying on compulsory licensing and regulated rates, instead of encouraging direct negotiation and other forms of market competition.”

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