Summary of Commission Decision of 16 July 2008 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/C-2/38.698 — CISAC) (notified under document number C(2008) 3435 final) (Text with EEA relevance)
OJ C 323, 18.12.2008, p. 12–13 (BG, ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
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Summary of Commission Decision
of 16 July 2008
relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement
(Case COMP/C-2/38.698 — CISAC)
(notified under document number C(2008) 3435 final)
(Only the Spanish, Czech, Danish, German, Estonian, Greek, English, French, Italian, Latvian, Dutch, Polish, Slovak and Slovenian texts are authentic)
(Text with EEA relevance)
On 16 July 2008, the Commission adopted a decision relating to a proceeding under Article 81 of the EC Treaty. In accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003 , the Commission herewith publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard to the legitimate interest of undertakings in the protection of their business secrets. A non-confidential version of the decision is available on the Competition Directorate General website at the following address:
(1) The Decision, pursuant to Article 7 of Regulation (EC) No 1/2003, is addressed to 24 EEA collecting societies which are members of CISAC (the International Association of Collecting Societies of Authors and Composers). The addressees are: Ελληνική Εταιρεία Προστασίας της Πνευματικής Ιδιοκτησίας (ΑΕPΙ — Greece), Autortiesibu un komunicesanas konsultaciju agentura/Latvijas Autoru apvieniba (AKKA/LAA — Latvia), Staatlich genehmigte Gesellschaft der Autoren, Komponisten und Musikverleger, reg.Gen.m.b.H (AKM — Austria), Magyar Szerzői Jogvédő Iroda Egyesület (ARTISJUS — Hungary), Vereniging Buma (BUMA — Netherlands), Eesti Autorite Ühing (EAÜ — Estonia), Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (GEMA — Germany), the Irish Music Rights Organisation Limited — Eagras um Chearta Cheolta Teoranta (IMRO — Ireland), Komponistrettigheder i Danmark (KODA — Denmark), Lietuvos autorių teisių gynimo asociacijos agentūra (LATGA-A — Lithuania), Performing Right Society Limited (PRS — United Kingdom), Ochranný svaz Ochranný svaz autorský pro práva k dílům hudebním, o.s. (OSA — Czech Republic), Société Belge des Auteurs, Compositeurs et Editeurs Scrl/Belgische Vereniging van Auteurs, Componisten en Uitgevers (SABAM — Belgium), Société des Auteurs, Compositeurs et Editeurs de Musique (SACEM — France), Združenje skladateljev, avtorjev in založnikov za zaščito avtorskih pravic Slovenije (SAZAS — Slovenia), Sociedad General de Autores y Editores (SGAE — Spain), Societa Italiana degli Autori ed Editori (SIAE — Italy), Slovenský ochranný Zväz Autorský pre práva k hudobným dielam (SOZA — Slovakia), Sociedade Portuguesa de Autores (SPA — Portugal), Samband Tónskalda og Eigenda Flutningsréttar (STEF — Iceland), Svenska Tonsättares Internationella Musikbyrå (STIM — Sweden), Säveltäjäin Tekijänoikeustoimisto teosto r.y. (TEOSTO — Finland), the Norwegian Performing Right Society (TONO — Norway), and Stowarzyszenie Autorów ZAiKS (ZAIKS — Poland) .
(2) The Decision identifies specific clauses contained in the reciprocal representation agreements between collecting societies which relate to membership and exclusivity as well as the concerted practice applied by the collecting societies which leads to a strict domestic territorial segmentation of licensing areas. It concludes that these agreements and practices are anti-competitive and run contrary to Article 81 of the EC Treaty. It does not however foresee any fines.
(3) The Decision concerns the conditions of management and licensing, by collecting societies, of authors' public performance rights of musical works. Authors (lyricists and composers) hold the copyright (inter alia the public performance rights) on the works they have created. Collecting societies, of which there is normally one single society per country, manage copyright on behalf of authors. As a consequence of the transfer of rights from its members (authors and other right holders) a collecting society has a portfolio of works. This portfolio constitutes the own repertoire of the collecting society.
(4) All the collecting societies to whom the Decision is addressed operate under the umbrella of CISAC. CISAC has agreed a model contract which serves as a non-mandatory template for reciprocal representation agreements between CISAC members for the licensing of public performance rights of musical works. Each collecting society undertakes to grant its repertoire to all other collecting societies for exploitation in their respective territories. As a result of the network created by all the reciprocal representation agreements, each collecting society has the ability to offer a global portfolio of musical works to commercial users, but only for use in its own domestic (i.e. national) territory.
(5) The Decision does not challenge the existence of the reciprocal representation agreements as such, but certain of their clauses and a concerted practice found to exist amongst collecting societies.
The membership clause
(6) Until 2004, one clause in the CISAC model contract provided that neither contracting collecting society could, without the consent of the other, accept as a member an author who is either already a member of another collecting society, or who is a national of the territory where the other collecting society operates. A number of reciprocal representation agreements concluded among collecting societies still contain such a membership clause. Such a membership clause restricts the ability of an author to become a member of the collecting society of their choice, or to be simultaneously a member of different EEA collecting societies, for the management of his or her rights in different EEA territories. This membership clause restricts competition between collecting societies on the market for the provision of services to authors.
The exclusivity clause
(7) According to the exclusivity clause in the CISAC model contract a collecting society authorises another collecting society to licence and administer its repertoire, on an exclusive basis, within the territory of the latter society. This clause was contained in the CISAC model contract until 1996 and is still present in the reciprocal representation agreements of 17 collecting societies. The clause prevents a collecting society from licensing its own repertoire in other territories and from allowing an additional collecting society to represent the same repertoire within the territory of the domestic collecting society. As a consequence, collecting societies are reciprocally guaranteed to have a monopoly in their domestic market for the granting of licences to commercial users, such as broadcasters and online content providers. This exclusivity clause therefore restricts competition between collecting societies on the market for the provision of public performance rights to commercial users.
The concerted practice relating to territorial delineation
(8) The Decision also challenges the concerted practice among all collecting societies relating to strict domestic territorial delineation. All collecting societies limit, through reciprocal representation agreements, the right to licence their repertoire to the domestic territory of the other contracting collecting society. This systematic delineation of domestic territory amounts to a concerted practice because it cannot be explained by individual market behaviour or the alleged need for geographic proximity between the licensor and the commercial user. The Decision takes note of the fact that a local presence is not required to monitor the use of the licence for internet, satellite and cable broadcast. As a consequence, collecting societies have the technical capacity to issue multi-territorial licences, however the uniform and systematic territorial delineation precludes collecting societies from offering multi-repertoire and multi-territorial licences to commercial users. Furthermore, the Decision finds that the concerted practice is not objectively necessary to ensure that collecting societies grant each other reciprocal mandates.
(9) The addressees shall bring an end to the membership clause and to the exclusivity clause immediately, as far as they have not already done so. They have 120 days of the date of the notification to bring an end to the concerted practice.
(10) The Decision will make it easier for an author to select which collecting society/societies will manage his or her public performance rights. This is of interest to an author (irrespective of whether he or she is a local composer or an artist with an international audience) because efficiency, quality of service and conditions of membership differ appreciably between collecting societies.
(11) The Decision also allows collecting societies to licence their repertoire to more than one other collecting society per territory. For internet, satellite and cable exploitation, the Decision improves the opportunities for commercial users (including broadcasters and content providers) to obtain a licence which covers more than one territory. By opening up the market to more competition between collecting societies, the Decision will provide incentives to collecting societies to improve their efficiency and the quality of their services, thereby benefitting both authors and users.
(12) The Decision does not call into question the existence of the network of reciprocal representation agreements between collecting societies and does not force or oblige a collecting society to withdraw from its reciprocal representation agreements, nor does the Decision facilitate a race to the bottom in authors' royalty payments. Collecting societies remain at liberty to continue the current system of fixing royalties or to otherwise introduce other models which protect royalty payments. The Decision will however encourage competition on the level of administration fees charged to the authors, through effecting efficiency gains, which will decrease administration fees and thereby increase the revenues of authors.
(13) The Advisory Committee on Restrictive Practices and Dominant Positions issued a favourable opinion on 17 June 2008.
 OJ L 1, 4.1.2003, p. 1.
 The collecting societies of Bulgaria and Romania are not parties to the procedure in so far as their respective countries were not part of the EEA/Community when the procedure started.