Broadcast Music, Inc. v. CBS, Inc.

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Broadcast Music, Inc. v. CBS, Inc.
Seal of the United States Supreme Court.svg
Argued January 15, 1979
Decided April 17, 1979
Full case nameBroadcast Music, Inc., et al. v. Columbia Broadcasting System, Inc., et al.
Citations441 U.S. 1 ( more )
99 S. Ct. 1551; 60 L. Ed. 2d 1; 201 U.S.P.Q. 497
Prior historyCBS, Inc. v. Am. Soc'y of Composers, Authors & Publishers, 562 F.2d 130, 195 U.S.P.Q. 209 (2d Cir. 1977); cert. granted, 439 U.S. 817(1978).
Holding
The issuance by ASCAP and BMI of blanket licenses does not constitute price-fixing per se unlawful under the antitrust laws.
Court membership
Chief Justice
Warren E. Burger
Associate Justices
William J. Brennan Jr.  · Potter Stewart
Byron White  · Thurgood Marshall
Harry Blackmun  · Lewis F. Powell Jr.
William Rehnquist  · John P. Stevens
Case opinions
MajorityWhite, joined by Burger, Brennan, Stewart, Marshall, Blackmun, Powell, Rehnquist
DissentStevens

Broadcast Music v. Columbia Broadcasting System, 441 U.S. 1 (1979), was an important antitrust case decided by the Supreme Court of the United States.

Supreme Court of the United States Highest court in the United States

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Contents

Background

The TV network CBS filed an antitrust 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.

CBS is an American English language commercial broadcast television and radio network that is a flagship property of CBS Corporation. The company is headquartered at the CBS Building in New York City with major production facilities and operations in New York City and Los Angeles.

Price fixing agreement over prices between participants on the same side in a market

Price fixing is an 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 level by controlling supply and demand.

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 and BMI did not necessarily constitute price fixing. 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 rules in antitrust to a more permissive rule of reason.

In US law, the term illegal per se means that the act is inherently illegal. Thus, an act is illegal without extrinsic proof of any surrounding circumstances such as lack of scienter (knowledge) or other defenses. Acts are made illegal per se by statute, constitution or case law.

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 possession of a monopoly, must be analyzed under the rule of reason and are only considered illegal when their effect is to unreasonablyrestrain trade. William Howard Taft, then Chief Judge of the Sixth Circuit Court of Appeals, first developed the doctrine in a ruling on Addyston Pipe and Steel Co. v. United States, which was affirmed in 1899 by the Supreme Court. The doctrine also played a major role in the 1911 Supreme Court case Standard Oil Company of New Jersey v. United States.

See also

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