EC wants to provide freedom for the authors from collecting societies

Against the high pressure from rights managers, the European Commission
decided to ban certain copyright handling practices, mainly the obligation
of an author not to move from a collective society to another.

On 16 July 2007, Competition Commissioner Neelie Kroes asked 24 European
collecting societies managing copyright on behalf of music authors to
eliminate the clause from their contracts preventing authors from moving to
another collecting society.

The Commission had opened an investigation following complaints from
broadcasting group RTL and the UK online music provider Music Choice. In
February 2007, the Commission sent a formal statement of objections to the
International Confederation of Societies of Authors and Composers (CISAC)
regarding the restrictiveness of certain business practices. In March 2007,
CISAC proposed a set of draft commitments that the EU executive decided to
market-test on 14 June 2007. On 10 July 2007, a large coalition of
broadcasting corporations and telecoms providers sent a letter to Commission
President José Manuel Barroso and Competition Commissioner Neelie Kroes,
protesting against CISAC commitments and urging the EU executive not to
accept settlement proposals.

The Commission believes the present proposed measure is meant to support the
authors, who will be free to choose what collecting society they want. The
Commission also asks for the elimination of the territorial restrictions
preventing a collecting society from offering licences to commercial users
outside their domestic territory. The EC considers that the territorial
restrictions introduced by 17 collecting societies in their contracts lead
to a strict segmentation of the market on a national basis. The result is
that a commercial user such as RTL wanting to provide pan-european services
will have to negotiate separately with each national collecting society.

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.”

CISAC argues that “the principle that creators are free to join whatever
society they choose is already well established and widely applied by
societies throughout the EEA. As for the issue of exclusivity, the EEA
societies have accepted for decades that contracts between them should be
based on non-exclusive arrangements.” In CISAC’s opinion, the decision will
“inevitably lead to a catastrophic fragmentation of repertoire and therefore
to legal uncertainty for music users”.

The European Composer and Songwriter Alliance (ECSA) has also criticized the
Commission’s decision considering it “an attack on cultural diversity”
because it will affect small and medium-sized businesses and individual
writers. On 3 July 2008, ECSA threatened to “play havoc” with the music
market in case the Commission proceeded with the decision. David Ferguson, a
film and television composer, spokesman for ECSA, said the ban would concern
the growing markets of online, cable and satellite retransmission of music
and not the traditional forms of exploitation.

Kroes’s spokesperson accused ECSA of speaking only on behalf of the large
collecting societies, failing to represent the wider category of music
authors.

The decision applies immediately and the collecting societies have 120 days
to inform the Commission about the implementation of the requested measures.

Commission cracks down on music copyright managers (17.07.2008)
http://www.euractiv.com/en/infosociety/commission-cracks-music-copyright-managers/article-174307?Ref=RSS

Antitrust: Commission prohibits practices which prevent European collecting
societies offering choice to music authors and users (16.07.2008)
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1165&format=HTML&aged=0&language=EN&guiLanguage=en

ECSA: response to European Commission antitrust decision (16.07.2008)
http://www.britishacademy.com/public-news/ecsa-press-release-in-response-to-ec-antitrust-decision.html

Proposed Commitments for Performing Rights under Article 9 of Regulation
no.1/2003 (7.03.2007)
http://ec.europa.eu/comm/competition/antitrust/cases/decisions/38698/commitments.pdf

CISAC regrets the European Commission’s decision concerning reciprocal
representation contracts (16/07/08)
http://www.cisac.org/CisacPortal/listeArticle.do?numArticle=900&method=afficherArticleInPortlet

Music authors ‘at war’ with Commission over copyrights (4.07.2008)
http://www.euractiv.com/en/infosociety/music-authors-war-commission-copyrights/article-173925