Brussels, 15/06/2007 (Agence Europe) - The European Commission has invited comments from interested parties on commitments proposed by CISAC (the International Confederation of Authors and Composers Societies) and 18 collecting societies, designed to meet the concerns raised in the Commission's statement of objections of January 2006 (see EUROPE 9174). The concerns are that certain clauses of the CISAC model contract, and its implementation at bilateral level by CISAC members in the European Economic Area (EEA), may be anti-competitive. If the results of the market test prove positive, the Commission will adopt a decision under Article 9 of Regulation 1/2003, rendering the commitments legally binding.
The CISAC model contract and its duplicates at bilateral level between collecting societies concern the collective management of copyright for every category of exploitation covered by public performance rights, for example, the broadcasting of music in a bar, a night club or via the internet. Public performance rights enable authors of musical works to authorise or prohibit broadcasts of their works by commercial users such as TV channels and radio stations.
The Commission's statement of objections concerns only certain relatively new forms of copyright exploitation, namely the retransmission of music via the internet, satellite and cable networks. With regard to these new forms of copyright exploitation, the Commission is concerned that certain clauses of the agreements might infringe the EC Treaty's ban on restrictive business practices (Article 81). These clauses are: (i) membership restrictions which oblige authors to transfer their rights only to their own national collecting society (whatever subsequent use is made of the rights); (ii) territorial restrictions, which oblige commercial users to obtain a licence only from the domestic collecting society and limited to the domestic territory.
Following detailed discussions, CISAC has undertaken to modify its model contract and 18 EEA collecting societies (representing almost 95% of the copyright licensing market in the EEA) have committed themselves to implementing these modifications. The new contract lifts the membership restrictions and the exclusivity clause, according to which reciprocal representation is carried out on an exclusive basis in the respective territories of the collecting societies. The parties also agreed, when entering into bilateral contracts, to allow multi-territorial licences covering their respective portfolios of rights, provided that each collecting society fulfils an exhaustive list of objective criteria. The list of criteria aims at ensuring, inter alia, that authors' remuneration does not suffer as a result of competition among collecting societies.
The Commission has invited interested parties to present their comments by 9 July 2007 on the commitments offered by CISAC and 18 EEA collecting societies. The Commission will then assess the comments received from interested parties. If the assessment concludes that the proposed commitments do indeed solve the competition concerns raised by the restrictive contract clauses, the Commission will adopt a commitments decision under Article 9 of Regulation 1/2003.
Such an Article 9 decision would mean that there were no longer grounds for action by the Commission, without concluding whether or not there had been or still was an infringement. However, if commitments given under the terms of such a decision were broken, the Commission could impose on the party in question a fine amounting to 10% of the total worldwide turnover, without having to prove that there had been an infringement of the antitrust rules.
If the third party observations showed that the commitments offered were not likely to remove the concerns expressed in the statement of objections, the Commission could pursue the procedure with a view to adopting a prohibition decision under Article 7 of Regulation 1/2003 requiring CISAC and the collecting societies in the EEA to no longer apply the membership and territorial restrictions.
In a press release published on 12 June, CISAC Director General Eric Baptiste said he was optimistic that the new commitments, which “respond directly to each and every one of the points raised by the statement of objections” (of January 2006), would be acceptable. Pressing on, he also expressed the intention of “CISAC and its members (to) work intensively to identify the practical measures necessary to give full effect to the draft commitments,” assuming, of course, that they are approved following the Commission's consultation of interested parties. (cd)