July 16, 2008 / 9:53 AM / 11 years ago

EU says music collecting societies must compete

BRUSSELS (Reuters) - Societies that collect music copyright fees for artists from the Rolling Stones to the Arctic Monkeys must end deals to stop competing against each other across borders, the European Commission said on Wednesday.

The decision gives the two dozen “collecting societies” across Europe 90 days to terminate the cross-border agreements.

The Commission, the European Union executive, imposed no fines on their umbrella group, known as CISAC, the International Confederation of Societies of Authors and Composers.

Basically, the collecting societies can continue to hold monopolies inside their countries but must end certain cross-border agreements.

“The removal of these restrictions will allow authors to choose which collecting society manages their copyright,” the Commission said in a statement.

It said authors can choose on the basis of quality of service, efficiency of collection and level of management fees deducted.

“It will also make it easier for users to obtain licenses for broadcasting music over the Internet, by cable and by satellite in several countries from a single collection society of their choice,” the statement said.

Competition Commissioner Neelie Kroes said the deal could “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”.

The decision said the societies may no longer apply membership clauses that prevent authors and composers from moving from one society to another.

The Commission also prohibited territorial restrictions that prevent a collecting society from offering licenses to commercial users outside their domestic territory.

The EU executive said it had responded to complaints from broadcasting group RTL and Music Choice, a British online music group.

“The effect for a commercial user such as RTL or Music Choice that wants to offer a pan-European media service is that it cannot receive a license which covers several member states, but has to negotiate with each individual national collecting society,” the Commission said of the existing situation.

Courts have blessed exclusive national collecting societies for the labor-intensive practice of policing bars and clubs, but said such restrictions make little sense for satellite, cable, and Internet transmissions.

Critics who saw the decision while it was in draft form say it does little more than earlier efforts dating back seven years, which fell short of breaking up the monopolies.

Critics have said voiding a few clauses hardly solves the problems.

Reporting by David Lawsky; Editing by Dale Hudson

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