EU challenges EU-wide music royalty structure

The European Commission has sent a shot across the bows of the EU royalty collection agencies, saying they fear by them working closely together across the EU, but bound within their own territories, they will extended the national monopolies the societies current hold in the off-line world, to the Internet, potentially in breach of EU competition rules.

The EU executive said it sent a ‘statement of objections’ detailing its regulatory concerns to the organisations over their so-called ‘Santiago Agreement’ – a pan-EU system that allows national organisations to collect music authors’ copyright proceeds.

In 2001 the collecting societies of the UK (PRS), France (SACEM), Germany (GEMA) and the Netherlands (BUMA) notified the Commission of the ‘Santiago Agreement’. Since then, all other societies from the European Economic Area, with the exception of the Portuguese society (SPA), have signed up. They were also joing by the Swiss society (SUISA).

While strongly supporting the “one-stop shop” portion of the Agreement, and acknowledging adequate copyright protection and enforcement, the Commission “considers that such crucial developments in online-related activities must be accompanied by an increasing freedom of choice by consumers and commercial users throughout Europe as regards their service providers, such as to achieve a genuine European single market. “. The EU wants to encourage competition between the agencies, not consolidation, in their words,

“The Commission considers that the territorial exclusivity afforded by the Santiago Agreement to each of the participating societies is not justified by technical reasons and is irreconcilable with the world-wide reach of the Internet”.

Coming on the heels of the EU record fine of Microsoft Media player, we feel this shows that the EU Commission is serious about protecting the rights of the public to the fair and reasonable access to media in a digital age.

The collecting societies have two and a half months to reply to the Commission’s objections.

EU Press release – Commission opens proceedings into collective licensing of music copyrights for online use