EC Raises Objections To Collecting Societies' Practices

by Ulrika Lomas, for LawAndTax-News.com, Brussels

13 February 2006

Europe's Competition Commission last week announced that it has sent a Statement of Objections to the International Confederation of Societies of Authors and Composers (CISAC) and its EEA members.

The Statement of Objections concerns certain parts of the CISAC model contract and its implementation at bilateral level by CISAC members in the EEA.

This model contract and its duplicates at bilateral level concern the collective management of copyright for every category of exploitation, for example the broadcasting of music in a bar, a night club or via internet. However, the Statement concerns only certain relatively new forms of copyright exploitation: internet, satellite transmission and cable retransmission of music.

As regards these new forms of copyright exploitation, the Commission stated that it considers that certain aspects of the agreements might infringe the EC Treaty’s prohibition of restrictive business practices. These aspects are:

(i) the membership restrictions which oblige authors to transfer their rights only to their own national collecting society (whatever the subsequent exploitations of the rights);

(ii) the territorial restrictions, which oblige commercial users to obtain a license only from the domestic collecting society and limited to the domestic territory; and

(iii) the network effects of the agreements (the effect of the network of interlocking agreements between the collecting societies is that the membership and territorial restrictions multiply and guarantee to collecting societies an absolutely exclusive position on their domestic market: the historical de facto monopoly is strengthened and potential new entrants are prevented from entering the market for the management of copyright).

CISAC now has two months to defend itself, in writing, against the Commission's objections.

Recommended