In re Pandora Media, Inc.

ASCAP, which licenses public-performance rights for its members under a 1941 antitrust consent decree (AFJ2), amended its licensing rules in 2011 to let members withdraw ASCAP's right to license their works to new media companies while still licensing to older ones. Pandora Media, Incorporated (Pandora), an internet radio service treated as a new media entity under the amendment, began negotiating direct licenses once certain publishers withdrew, and Sony/ATV Music Publishing LLC (Sony) demanded a rate of 12 percent of Pandora's revenue — triple the four-percent industry average — based on the disparity between sound-recording and performance-license rates. When ASCAP failed to negotiate Pandora's license renewal and Sony withdrew, Pandora filed a rate-court petition, ultimately agreeing to pay Sony five percent under time pressure. The district court separately held that AFJ2 barred ASCAP's 2011 Compendium amendment, since ASCAP members must be willing to license any requesting music user.