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MEMO/06/63
Brussels, 7th February 2006
Competition: Commission sends Statement of
Objections to the International Confederation of Societies of Authors and
Composers (CISAC) and its EEA members
The European Commission can confirm that it has decided to open formal
proceedings against CISAC (the “International Confederation of Societies
of Authors and Composers”) and the individual national collecting
societies in the EEA that are members of CISAC and has sent them a Statement of
Objections (SO).
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 SO
concerns only certain relatively new forms of copyright exploitation: internet,
satellite transmission and cable retransmission of music. The traditional forms
of exploitation are outside the scope of the SO. As regards these new forms of
copyright exploitation, the Commission considers that certain aspects of the
agreements might infringe the EC Treaty’s prohibition of restrictive
business practices (Article 81). 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).
Background
Statements of Objections are a formal step in European antitrust
investigations. After receiving such statements, companies have two months to
defend themselves in writing. They can also ask the Commission to hear their
case at an oral hearing, which usually takes place about one month after the
written reply has been received. After having heard the company's defence can
the Commission take a final decision, which may be accompanied by fines.
Collecting societies act as trustees on behalf of their members (here,
authors of musical works). They manage copyright and grant exploitation licences
to commercial users of public performance
rights[1] for the purposes (as
far as are relevant to the present SO) of music broadcasting via satellite,
cable retransmission and internet transmission.
Each collecting society that is a member of CISAC enjoys an exclusive
position on its domestic (i.e. national) market and has its own portfolio of
works (the “repertoire”).
Each EEA collecting society also has a reciprocal representation contract
with all the other EEA societies. As a consequence, all EEA collecting societies
have a global portfolio of musical works – a multirepertoire- and can
deliver to commercial users a multirepertoire licence to be exploited in the
domestic market only.
The reciprocal representation contracts are a duplicate at bilateral level of
a model contract proposed by the international association of collecting
societies: CISAC. The Commission’s concerns are not based on the
reciprocal representation contracts as such, but only some of the restrictive
clauses contained in the reciprocal representation contracts.
[1] The public performance
right is one of the rights granted to authors of musical works. With that right,
authors can notably authorise or prohibit each broadcasting of their works by
commercial users (TV channels, radio...).
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