RMLC loses injunction, but good news too

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SESAC, Inc.The Radio Music License Committee (RMLC) has been denied an injunction in its ongoing lawsuit against SESAC. Eastern District Court of Pennsylvania Judge Lynn Sitarski ruled that the RLMC had failed to prove that a SESAC rate increase will cause irreparable harm to radio. However, she also agreed with some of RMLC’s antitrust allegations.


RLMC had asked for the injunction to stop the performance rights organization (PRO) from raising its rates while the lawsuit is ongoing. In 10/12, the RLMC filed an antitrust lawsuit in the Philadelphia Federal District Court against SESAC, alleging it charges rates disproportionate to the number of works it licenses in comparison to BMI and ASCAP. The suit charges that while the radio industry has seen its revenue drop and the number of stations that have a licensing agreement stay the same, SESAC increased its rates on an average of 8% annually. In that same period ASCAP and BMI rates have dropped by about 40%.

Sitarski also ruled that stations could not realistically consider foregoing a SESAC license due to an inability to exercise total control over what they play due to music used in spots and an “inability to determine what songs are in SESAC’s catalog…A station cannot bypass a SESAC license by obtaining a bundle of direct licenses, which means the only option is a blanket license.”

Even though the SESAC PRO blanket license represents an efficient manner for radio stations to get properly licensed, Sitarski also said,  “SESAC has engaged in exclusionary conduct by failing to disclose its repertory and ensuring that users have no alternative but to purchase their licenses.”

The court said its satisfied that RMLC has established a likelihood of success in proving a concerted action, and demonstrated there are no restrictions in place on SESAC’s ability to raise prices on its product. Those conditions “further supports a finding that the challenged conduct has produced anticompetitive effect,” according to her ruling.

Since SESAC has no mechanism to challenge the rates it sets (like ASCAP and BMI, which operate under consent decrees), the court also ruled RLMC has proven a likelihood that SESAC is acting in a monopolistic fashion.