[A2k] Copyright collective management and antitrust: European Commission renders its decision in the CISAC v. RTL case

[Anne-Catherine Lorrain]

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[ Picked text/plain from multipart/alternative ]
The European Commission has rendered its decision in the *CISAC v.
RTL*case... in favour of RTL.
... towards real pan-European licenses for music?

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1165&type=HTML&aged=0&language=EN&guiLanguage=en


*IP/08/1165*

Brussels, 16th July 2008
*Antitrust: Commission prohibits practices which prevent European collecting
societies offering choice to music authors and users* *The European
Commission has adopted an antitrust decision prohibiting 24 European
collecting societies from restricting competition by limiting their ability
to offer their services to authors and commercial users outside their
domestic territory. However, the decision allows collecting societies to
maintain their current system of bi-lateral agreements and to keep their
right to set levels of royalty payments due within their domestic territory.
The prohibited practices consist of clauses in the reciprocal representation
agreements concluded by members of CISAC (the "International Confederation
of Societies of Authors and Composers") as well as other concerted practices
between those collecting societies. The practices infringe rules on
restrictive business practices (Article 81 of the EC Treaty and Article 53
of the EEA Agreement). The Commission decision requires the collecting
societies to end these infringements by modifying their agreements and
practices, but does not impose fines. The removal of these restrictions will
allow authors to choose which collecting society manages their copyright
(e.g. on the basis of quality of service, efficiency of collection and level
of management fees deducted). It will also make it easier for users to
obtain licences for broadcasting music over the internet, by cable and by
satellite in several countries from a single collection society of their
choice.*

Competition Commissioner Neelie Kroes said: "This decision will benefit
cultural diversity by encouraging collecting societies to offer composers
and lyricists a better deal in terms of collecting the money to which they
are entitled. It will also facilitate the development of satellite, cable
and internet broadcasting, giving listeners more choice and giving authors
more potential revenue. However, the Commission has been careful to ensure
that the benefits of the collective rights management system are not put
into question in terms of levels of royalties for authors and available
music repertoire."

Music authors (lyricists and composers) sign over to collecting societies
the rights to manage on their behalf, worldwide, the copyright of their
musical works. Based on the CISAC model contract, collecting societies have
concluded reciprocal representation agreements for the collective management
of the public performance rights of their musical works so that they can
each offer the repertoire of all the artists represented by all the
collecting societies participating in the representation agreements. The
public performance rights enable authors of musical works to authorise or
prohibit the exploitation of their works by commercial users such as TV
channels and radio stations, and to receive royalties every time their music
is played.

The Commission opened an investigation following complaints from
broadcasting group RTL and Music Choice, a UK online music provider.

The Commission's decision recognises the valuable role of collecting
societies and does *not* challenge the existence of the reciprocal
representation agreements. It does, however, prohibit certain aspects of
those agreements as well as concerted practices among collecting societies.

In particular the decision requires the 24 EEA-based collecting societies
which are members of CISAC to no longer apply:

   - the *membership clause*, currently applied by 23 collecting societies,
   that* *prevents an author from choosing or moving to another collecting
   society.
   - *territorial restrictions* that prevent a collecting society from
   offering licences to commercial users outside their domestic territory.
   These territorial restrictions include an *exclusivity clause*, currently
   contained in the contracts of 17 EEA collecting societies, by which a
   collecting society authorises another collecting society to administer its
   repertoire on a given territory on an exclusive basis and a *concerted
   practice* among all collecting societies resulting in a strict
   segmentation of the market on a national basis. The effect for a commercial
   user such as RTL or Music Choice that wants to offer a pan-European media
   service is that it cannot receive a licence which covers several Member
   States, but has to negotiate with each individual national collecting
   society.

The decision will allow collecting societies to compete on the quality of
their services and on the level of their administrative costs (which are
deducted from the money collected before it is passed on to the author). It
will thus provide incentives to collecting societies to improve their
efficiency.

In 2007 the Commission sought to resolve the case amicably when formal
commitments were offered by CISAC and 18 collecting societies (see
IP/07/829<http://europa.eu/rapid/pressReleasesAction.do?reference=IP/07/829&format=HTML&aged=1&language=EN&guiLanguage=en>).
However, interested parties' comments on the commitments were negative. In
particular, broadcasters, content providers and certain collecting societies
generally considered that the proposed commitments would continue to make it
difficult for a commercial user to obtain a pan-European licence.

See also MEMO/08/511<http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/511&format=HTML&aged=0&language=EN&guiLanguage=en>