US Representative Scott Fitzgerald called on the US Federal Trade Commission to examine two performance rights organizations for potentially misleading businesses about their song catalogs.
In a letter to FTC Chairman Andrew Ferguson on Monday (December 8), which you can read here, the Wisconsin Republican requested an investigation into whether AllTrack and Pro Music Rights violated consumer protection laws through deceptive practices.
Fitzgerald’s letter focuses on claims that both PROs may be misrepresenting the scope of their music rights portfolios.
PROs operating in the US collect licensing fees from businesses that play music publicly, then distribute royalties to songwriters. The Congressman said the market was previously dominated by ASCAP, founded in 1914; SESAC, from 1930; and BMI, which started in 1939. Global Music Rights entered the field in 2013.
AllTrack and Pro Music Rights launched in 2017 and 2018, respectively. AllTrack was launched by former SESAC board member Hayden Bower.
“[I]t is unclear whether AllTrack or Pro Music Rights have amassed a repertoire that a licensee would find valuable to its business.”
Scott Fitzgerald, US Representative
The Congressman alleged that the two PROs “begun to solicit businesses for the purchase of a license.” He said AllTrack and Pro Music Rights have started approaching businesses with requests to buy a license for their catalog of works.
However, Fitzgerald said “both entities feign legitimacy,” adding, “[I]t is unclear whether AllTrack or Pro Music Rights have amassed a repertoire that a licensee would find valuable to its business.”
Fitzgerald pointed to some examples of alleged misrepresentation. AllTrack’s website displays artists including Billy Ray Cyrus and No Doubt on its homepage. However, according to comments submitted to the Copyright Office, AllTrack only represents a “partial interest” in one Cyrus song and a composition once recorded by No Doubt, “but does not represent the artists themselves or a substantial volume of their recorded works.”
“it appears both entities may be misrepresenting to licensees the bodies of work they actually manage, thereby pressuring businesses to obtain a performance license they may not need.”
Scott Fitzgerald, US Representative
Pro Music Rights claims a 7.4% U.S. market share. BMI’s analysis suggested that figure would exceed the combined rights managed by SESAC and Global Music Rights, raising questions about its accuracy, the Congressman wrote.
Fitzgerald argued that: “[T]he lack of a complete, authoritative database has allowed PROs like AllTrack and Pro Music Rights to misrepresent their volume of works without verification.”
The letter asks the FTC to examine whether AllTrack and Pro Music Rights violated Section 5 of the FTC Act, which prohibits unfair or deceptive business practices.
“I also ask that the FTC consider issuing guidance on potential unfair or deceptive acts or practices in music licensing. This will ensure both PROs and licensees have clear guidance on what behavior may constitute a violation of Section 5.”
This marks Fitzgerald’s latest crackdown on PROs. Last year, he was joined by US House Reps. Jim Jordan and Darrell Issa in writing a letter to the US Copyright Office, expressing concerns about the number of PROs in the US and the difficulties many businesses face in licensing music, given the need to sign blanket licensing agreements with numerous collections organizations.
In response, the Copyright Office launched an inquiry into PROs in February to answer “questions related to the increase in the number of PROs and the licensing revenue distribution practices of PROs.”
The USCO counts six PROs in the US: ASCAP, SESAC, and BMI, the “traditional” PROs operating in the US, along with three relatively new organizations – Global Music Rights (GMR), PRO Music Rights, and AllTrack – all of which were founded in the past 12 years.
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