''Broadcast Music Inc. v. Columbia Broadcasting System Inc.'', 441 U.S. 1 (1979), was an important
antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
case decided by the
Supreme Court of the United States
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all Federal tribunals in the United States, U.S. federal court cases, and over Stat ...
. It examined a complaint brought by
CBS
CBS Broadcasting Inc., commonly shortened to CBS (an abbreviation of its original name, Columbia Broadcasting System), is an American commercial broadcast television and radio network serving as the flagship property of the CBS Entertainme ...
affiliates that the method in which broadcast companies determine fees for the issuance of blanket licenses (the permission to use a set of copyrighted media materials) was a violation of the
Sherman Antitrust Act
The Sherman Antitrust Act of 1890 (, ) is a United States antitrust law which prescribes the rule of free competition among those engaged in commerce and consequently prohibits unfair monopolies. It was passed by Congress and is named for S ...
. The Supreme Court ruled that the issuance of blanket licenses was not a violation of the act, holding that the nature of blanket licenses did not arise to
price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
.
Background
The TV network
CBS
CBS Broadcasting Inc., commonly shortened to CBS (an abbreviation of its original name, Columbia Broadcasting System), is an American commercial broadcast television and radio network serving as the flagship property of the CBS Entertainme ...
(also, at the time, owner of
) filed an
antitrust
Competition law is the field of law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies. Competition law is implemented through public and private enforcement. It is also known as antitrust l ...
suit against licensing agencies alleging that the system by which these agencies received fees for the issuance of blanket licenses to perform copyrighted musical compositions amounted to illegal
price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
.
The basic question in the case is "whether the issuance by ASCAP and BMI to CBS of blanket licenses to copyrighted musical compositions at fees negotiated by them is price fixing per se unlawful under the antitrust laws."
Judgment
The Supreme Court held that blanket licenses issued by
ASCAP
The American Society of Composers, Authors, and Publishers (ASCAP) () is an American not-for-profit performance-rights organization (PRO) that collectively licenses the public performance rights of its members' musical works to venues, broadc ...
and
BMI did not necessarily constitute
price fixing
Price fixing is an anticompetitive agreement between participants on the same side in a market to buy or sell a product, service, or commodity only at a fixed price, or maintain the market conditions such that the price is maintained at a given ...
. The judgment, delivered by White J, was unanimous in holding that such practice should instead be examined under the rule of reason to determine if it is unlawful. Stevens J agreed with the majority, but would not have remanded the case to the lower courts for rehearing. He would have held that the blanket license were a breach of s1 of the Sherman Act using the rule of reason.
Significance
The case was part of the court's retreat from applying rigid ''
per se
Per se may refer to:
* '' per se'', a Latin phrase meaning "by itself" or "in itself".
* Illegal ''per se'', the legal usage in criminal and antitrust law
* Negligence ''per se'', legal use in tort law
*Per Se (restaurant)
Per Se is a New Amer ...
'' rules in antitrust to a more permissive
rule of reason
The rule of reason is a legal doctrine used to interpret the Sherman Antitrust Act, one of the cornerstones of United States antitrust law. While some actions like price-fixing are considered illegal ''per se', ''other actions, such as pos ...
.
See also
*
US antitrust law
In the United States, antitrust law is a collection of mostly federal laws that govern the conduct and organization of businesses in order to promote economic competition and prevent unjustified monopolies. The three main U.S. antitrust statute ...
* ''
Westmoreland v. CBS
''Westmoreland v. CBS'' was a $120 million libel suit brought in 1982 by former U.S. Army Chief of Staff General William Westmoreland against CBS, Inc. for broadcasting on its program '' CBS Reports'' a documentary entitled ''The Uncounted E ...
'' (S.D.N.Y. 1982)
* ''
Estate of Martin Luther King, Jr., Inc. v. CBS, Inc.'' (11th Cir. 1999)
External links
*
References
1979 in United States case law
United States antitrust case law
CBS
United States Supreme Court cases
United States Supreme Court cases of the Burger Court
Broadcast Music, Inc.
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