A Matter of (Anti)Trust: The Harry Fox Agency, the Performance Rights Societies, and Antitrust Litigation
Volume 81, No. 4, Winter 2008
By Michelle E. Arnold

Although laypersons may often equate monopolistic antitrust practices with the size of a company’s market share, courts examining antitrust allegations have stated that “the size of the market is not conclusive of monopoly or absence of it.” Nowhere is this proposition better illustrated than with the Harry Fox Agency (“HFA”), which controls mechanical licensing and collections for eighty percent of United States music publishers. Unlike the performance rights societies–the American Society of Composers, Authors, and Publishers (“ASCAP”); Broadcast Music, Inc. (“BMI”); and the Society of European Stage Authors & Composers, Inc. (“SESAC”)–which control much smaller performance licensing markets of approximately fifty-four, forty-three, and three percent, respectively, HFA remains free from antitrust charges, while the societies share an extensive history of antitrust litigation.

This Comment examines whether HFA’s large market share violates antitrust laws. In doing so, the Comment compares HFA’s structure and operation to that of the performance rights societies and argues that the differences lead to HFA’s immunity from antitrust charges, despite the agency’s large mechanical licensing market share. Part II.A provides background information on both HFA and mechanical licensing. Part II.B discusses the three performance rights societies, performance royalty licensing, and the major antitrust challenges arising from the societies’ practices throughout the twentieth century. Part III.A addresses the possibility that § 115(c)(3)(B) of the 1976 Copyright Act provides a statutory antitrust shield for common mechanical licensing and collection agents, such as HFA. Part III.B examines the operational differences between HFA and the performance rights societies and uses a rule of reason test to determine that HFA does not violate antitrust laws. Part III.C argues that HFA’s large mechanical licensing market share stems not from illegal monopolistic behavior but from allowable, “fair and open salesmanship.” Finally, Part III.D analyzes a hypothetical situation in which HFA could potentially engage in trade-restraining behavior but ultimately concludes, through application of the rule of reason test, that the availability of the statutory compulsory license precludes any antitrust violations by HFA.

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