## Facts

- Copyright law grants owners of musical compositions exclusive public-performance rights, but individual licensing and enforcement against widespread, fleeting uses is often impractical.
- ASCAP and BMI functioned as collective licensing organizations for composers and publishers, issuing nonexclusive licenses and distributing royalties.
- ASCAP’s and BMI’s repertories together covered nearly all domestic copyrighted compositions.
- The organizations offered broadcasters a “blanket license” allowing performance of any work in the repertory for a stated term, for a fee typically set as a percentage of revenue or a flat amount, not directly tied to particular music use.
- CBS operated a national television network with numerous affiliates and thousands of programs yearly and historically used blanket licenses from ASCAP and BMI for decades.
- CBS sued, alleging the blanket license involved collective price setting by otherwise competing copyright owners and therefore constituted unlawful horizontal price fixing and related antitrust theories under § 1 of the Sherman Act.
- The district court dismissed after a liability trial, finding no per se price fixing.
- The court of appeals reversed, holding the blanket license was per se illegal price fixing and established copyright misuse.

## Issues

1. Whether ASCAP’s and BMI’s issuance of blanket licenses to CBS at collectively negotiated fees constitutes per se unlawful price fixing under § 1 of the Sherman Act.
2. Whether the blanket licensing practice should instead be evaluated under the rule of reason in light of market context and potential efficiencies.

## Decision

- The Supreme Court reversed the court of appeals and remanded.
- The Court held that blanket licensing by ASCAP and BMI is not per se unlawful price fixing.
- The Court required analysis under the rule of reason because the practice could have substantial efficiency justifications and did not fit classic per se price-fixing categories.
- Justice Stevens agreed per se treatment was improper but would have found a § 1 violation on the existing record under the rule of reason.

## Legal Principles

- Per se condemnation is limited to restraints with demonstrated, predictable anticompetitive effects based on substantial judicial experience.
- Not every agreement involving joint price setting is per se illegal; courts must examine the practice’s economic function and competitive effect in context.
- Joint arrangements that create a distinct product and integrate functions (such as aggregated licensing with monitoring and enforcement) may warrant rule-of-reason treatment rather than automatic invalidation.
- Institutional and legislative acceptance of an industry practice may inform whether per se treatment is appropriate, though it does not confer immunity from antitrust review.

## Conclusion

The Court held that collective blanket licenses for public performance rights, priced as a single comprehensive offering, are not automatically unlawful as per se price fixing; instead, their legality turns on a rule-of-reason assessment of competitive harms and efficiency benefits in the relevant market.


Broadcast Music, Inc. v. Columbia Broadcasting Sys., Inc., 441 U.S. 1 (1979)