Gus Hurwitz on the DOJ’s Music Consent Decrees in Competition Policy International
ICLE Director of Law & Economics, Gus Hurwitz, published an article in Competition Policy International on the DOJ’s consent decrees with the music industry’s Performing Rights Organizations (“PROs”). In short, although the consent decrees are imperfect, and there are likely better ways to facilitate the market, DOJ should tread carefully when potentially upending the system upon which the music industry has been at least partially built:
Almost fifty years ago the Rolling Stones sang that iconic line: “you can’t always get what you want.” Mick Jagger probably wasn’t thinking of administrative law when writing the album “Let it Bleed.” However, fifteen years later the U.S. Supreme Court seemed to set out to prove Jagger wrong. In its Chevron decision, the Supreme Court directed federal courts to defer to agencies’ interpretations of statutes, giving agencies broad discretion to use those statutes to get whatever policies they may want. Today, agencies are able to get whatever statutory interpretation they want with the barest minimum of justification. Indeed, the doctrines of judicial deference even allow agencies to reverse course or flip-flop between policies for almost any reason, including “the election of a new President of a different political party.”
But you don’t get a reputation for “moves like Jagger” by being wrong. While agencies have very broad discretion to interpret adopt and change policies to get what they want, that discretion does have its limits. This is perhaps most strongly the case when a market has significantly relied on the current policy. Justice Scalia wisely stated that “it would be arbitrary or capricious to ignore” serious industry reliance interests. According to the Supreme Court’s FCC v. Fox decision, this means that an agency needs to engage in greater process and provide a more detailed justification for a change in policy on which the industry significantly relies.