BPN 1162 More competition between collecting societies

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. It basically means that the trust agreements of the collecting societies made in the CISAC (International Confederation of Societies of Authors and Composers) will have to be changed. It will increase competition in Europe. In statements collecting societies say that the measure is logical and could be foreseen. But the smaller ones are not very happy as they expect to be unable to compete. They point already to super collecting societies in the UK, France and Germany and expect a triangle between Los Angeles, Tokyo and London.

Now international broadcast organisations, mobile telephone companies and online music provider can now start shopping with national collecting societies of their choice and collecting societies can offer pan-European licences. In this way Apple will not have to negotiate with every national collecting society in Europe any longer. And Nokia can negotiate a pan-European licence for its music service. The competition between the collecting societies is now focussed on efficiency and service; two aspects the organisations have not been famous for. It is only in the last three years that the collecting societies saw the pressure of the music providers and musicians. The Belgian collecting society saw the iTunes dilemma of negotiating with 24 EU collecting societies and anticipated with an authoring organisation Solem offering pan-European licences. The Dutch BUMA/STEMRA produced a pan-European licence for music provider eMusic in 2006.

The effect of the measure on the market is doubted by several participants. Musicians have already indicated in hearings that they believe that they will be the losers getting less money as providers will shop for the cheapest licence. Of course the providers will also cry foul. And eventually the bill will be put on the desk of the consumer.

The press release reads:

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. (more)

Blog Posting Number: 1162

Tags: collecting societies