# C_2005200EN.01001101.xml

| 17.8.2005 | EN | Official Journal of the European Union | C 200/11 |
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17.8.2005

EN

Official Journal of the European Union

C 200/11

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Notice published pursuant to Article 27(4) of Council Regulation (EC) No 1/2003 in Cases COMP/C2/39152 — BUMA and COMP/C2/39151 SABAM (Santiago Agreement — COMP/C2/38126)

(2005/C 200/05)

(Text with EEA relevance)

1.   INTRODUCTION

| (1) | On 17 April 2001, the copyright management societies BUMA, Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (GEMA), The Performing Right Society Ltd. (PRS) and Société des Auteurs, Compositeurs et Editeurs de Musique (SACEM) notified to the Commission a number of bilateral reciprocal agreements they entered into with each other as well as with other societies. All other EEA societies have subsequently joined the notification (1), with the exception of the Portuguese collecting society SPA. |
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(1)

On 17 April 2001, the copyright management societies BUMA, Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte (GEMA), The Performing Right Society Ltd. (PRS) and Société des Auteurs, Compositeurs et Editeurs de Musique (SACEM) notified to the Commission a number of bilateral reciprocal agreements they entered into with each other as well as with other societies. All other EEA societies have subsequently joined the notification (1), with the exception of the Portuguese collecting society SPA.

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| (2) | The notified agreements are substantially identical except for some minor differences. The notified agreements correspond to a standard agreement (hereinafter ‘the Santiago Agreement’) which is used worldwide, including by the notifying parties listed above, since 2000. The Santiago Agreement concerns the right to license public performance rights on musical works in an online environment and it materialises a number of amendments to the existing bilateral reciprocal representation agreements entered into in the past by the notifying societies. The agreement authorises each party to grant non-exclusive licenses for the online public performance of musical works of the repertoire of the other party on a world-wide basis. |
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(2)

The notified agreements are substantially identical except for some minor differences. The notified agreements correspond to a standard agreement (hereinafter ‘the Santiago Agreement’) which is used worldwide, including by the notifying parties listed above, since 2000. The Santiago Agreement concerns the right to license public performance rights on musical works in an online environment and it materialises a number of amendments to the existing bilateral reciprocal representation agreements entered into in the past by the notifying societies. The agreement authorises each party to grant non-exclusive licenses for the online public performance of musical works of the repertoire of the other party on a world-wide basis.

| (3) | The Santiago Agreements (i.e. the bilateral reciprocal representation agreements signed by the notifying parties) are intended to facilitate the creation of a new category of licence, which comprises the repertoires administered by the collecting societies that have implemented it (multi-repertoire). |
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(3)

The Santiago Agreements (i.e. the bilateral reciprocal representation agreements signed by the notifying parties) are intended to facilitate the creation of a new category of licence, which comprises the repertoires administered by the collecting societies that have implemented it (multi-repertoire).

| (4) | On 17 May 2001 the Commission published a Notice on the Santiago Agreement and invited interested third parties to submit observations. (2) |
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(4)

On 17 May 2001 the Commission published a Notice on the Santiago Agreement and invited interested third parties to submit observations. (2)

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2.   PRELIMINARY ASSESSMENT

| (5) | On the basis of the comments received from third parties as well as of the other information gathered during the investigation, on 29 April 2004 the Commission issued a Statement of Objections addressed to the 16 notifying parties (3). |
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(5)

On the basis of the comments received from third parties as well as of the other information gathered during the investigation, on 29 April 2004 the Commission issued a Statement of Objections addressed to the 16 notifying parties (3).

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| (6) | According to the Commission's Statement of Objections, the problems lay in the fact that (Section II of) the Agreement determines that the society with authority to grant the mentioned multi-repertoire licenses is the society of the country where the content provider has its actual and economic location. Given the fact that there is a single, monopolistic, collecting society per territory in the EEA, and that all collecting societies enter into such bilateral agreements, this means that each national collecting society is given absolute exclusivity for its territory as regards the possibility of granting multi-territorial/multi-repertoire licenses for online music rights. |
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(6)

According to the Commission's Statement of Objections, the problems lay in the fact that (Section II of) the Agreement determines that the society with authority to grant the mentioned multi-repertoire licenses is the society of the country where the content provider has its actual and economic location. Given the fact that there is a single, monopolistic, collecting society per territory in the EEA, and that all collecting societies enter into such bilateral agreements, this means that each national collecting society is given absolute exclusivity for its territory as regards the possibility of granting multi-territorial/multi-repertoire licenses for online music rights.

| (7) | In addition, the Agreement contains a Most Favoured Nation (MFN) clause which reinforces the exclusivity referred to above. Therefore, according to the Statement of Objections, although the infringement of Article 81 derives from the limitation in each society's authority to license to its own territory, the multi-lateralisation of this limitation throughout the network of bilateral agreements, supported on a multilateral reassurance that all other collecting societies will be subject to the same territorial limitation, leads to a standardisation of the licensing terms throughout the EEA, preventing the market from evolving in different directions and crystallising the exclusivity enjoyed by each of the participating societies. |
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(7)

In addition, the Agreement contains a Most Favoured Nation (MFN) clause which reinforces the exclusivity referred to above. Therefore, according to the Statement of Objections, although the infringement of Article 81 derives from the limitation in each society's authority to license to its own territory, the multi-lateralisation of this limitation throughout the network of bilateral agreements, supported on a multilateral reassurance that all other collecting societies will be subject to the same territorial limitation, leads to a standardisation of the licensing terms throughout the EEA, preventing the market from evolving in different directions and crystallising the exclusivity enjoyed by each of the participating societies.

3.   COMMITMENTS

| (8) | BUMA and SABAM replied to the Statement of Objections separately from the other addressees. In their replies BUMA and SABAM took note of the Commission's preliminary view as expressed in the Statement of Objections, and, decided not to defend the clauses in the Santiago Agreement. Therefore, BUMA and SABAM manifested the intention of submitting undertakings to the Commission that would have addressed its competition concerns as expressed in the Statement of Objections. By letters of 20 April 2005 (BUMA) and 10 May 2005 (SABAM), they submitted to the Commission undertakings within the meaning of Article 9(1) of Regulation (EC) No 1/2003. The undertakings are briefly summarised in what follows and published in full on the website of the Directorate-General for Competition in the language in which they have been offered. |
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(8)

BUMA and SABAM replied to the Statement of Objections separately from the other addressees. In their replies BUMA and SABAM took note of the Commission's preliminary view as expressed in the Statement of Objections, and, decided not to defend the clauses in the Santiago Agreement. Therefore, BUMA and SABAM manifested the intention of submitting undertakings to the Commission that would have addressed its competition concerns as expressed in the Statement of Objections. By letters of 20 April 2005 (BUMA) and 10 May 2005 (SABAM), they submitted to the Commission undertakings within the meaning of Article 9(1) of Regulation (EC) No 1/2003. The undertakings are briefly summarised in what follows and published in full on the website of the Directorate-General for Competition in the language in which they have been offered.

| (9) | BUMA and SABAM undertake, amongst others, not to be party to any agreement on licensing of public performance rights for online use with other copyright management societies containing an economic residency clause, similar to that contained in the Santiago Agreement and identified as restrictive in the Statement of Objections. |
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(9)

BUMA and SABAM undertake, amongst others, not to be party to any agreement on licensing of public performance rights for online use with other copyright management societies containing an economic residency clause, similar to that contained in the Santiago Agreement and identified as restrictive in the Statement of Objections.

| (10) | The undertakings will remain in effect for three years. |
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(10)

The undertakings will remain in effect for three years.

| (11) | The length of the period in which the undertakings will be valid has been determined taking into account the fact that the relevant markets on which the alleged infringements produce their effects are emerging markets and therefore subject to rapid and substantial changes. |
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(11)

The length of the period in which the undertakings will be valid has been determined taking into account the fact that the relevant markets on which the alleged infringements produce their effects are emerging markets and therefore subject to rapid and substantial changes.

| (12) | The Commission considers that, in light of the above, the proposed commitments are adequate to address the competition concerns raised in the Statement of Objections. |
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(12)

The Commission considers that, in light of the above, the proposed commitments are adequate to address the competition concerns raised in the Statement of Objections.

4.   INVITATION TO MAKE COMMENTS

| (13) | The Commission intends, subject to market testing, to adopt a decision under Article 9(1) of Regulation (EC) No 1/2003 declaring the commitments summarised above and published on the Internet on the website of the Directorate-General for Competition to be binding. To this end, pursuant to Article 27(4) of Regulation (EC) No 1/2003, it invites interested third parties to submit their comments to it within one month of the publication of this notice. |
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(13)

The Commission intends, subject to market testing, to adopt a decision under Article 9(1) of Regulation (EC) No 1/2003 declaring the commitments summarised above and published on the Internet on the website of the Directorate-General for Competition to be binding. To this end, pursuant to Article 27(4) of Regulation (EC) No 1/2003, it invites interested third parties to submit their comments to it within one month of the publication of this notice.

| (14) | Interested third parties are also asked to submit a non-confidential version of their comments, in which commercial secrets and other confidential passages are deleted and are replaced as required by a non-confidential summary or by the words ‘[commercial secrets]’ or ‘[confidential]’. |
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(14)

Interested third parties are also asked to submit a non-confidential version of their comments, in which commercial secrets and other confidential passages are deleted and are replaced as required by a non-confidential summary or by the words ‘[commercial secrets]’ or ‘[confidential]’.

| (15) | Comments should be sent to the following address, mentioning the references COMP/C-2/39152 — BUMA and COMP/C-2/39151 — SABAM (Santiago Agreement).





  European Commission |
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| Directorate-General for Competition |
| Antitrust Registry |
| B-1049 Brussels |
| Fax: (32-2) 295 01 28 |
| E-mail: COMP-GREFFE-ANTITRUST@cec.eu.int |

(15)

Comments should be sent to the following address, mentioning the references COMP/C-2/39152 — BUMA and COMP/C-2/39151 — SABAM (Santiago Agreement).

European Commission

Directorate-General for Competition

Antitrust Registry

B-1049 Brussels

Fax: (32-2) 295 01 28

E-mail: COMP-GREFFE-ANTITRUST@cec.eu.int

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(1)  AKM (Austria), IMRO (Ireland), SABAM (Belgium), STIM (Sweden), TEOSTO (Finland), KODA (Denmark), STEF (Iceland), TONO (Norway), AEPI (Greece), SIAE (Italy), SGAE (Spain) and SUISA (Switzerland). SUISA, the Swiss collecting society, is active in Liechtenstein.

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(2)  OJ C 145/2 of 17 May 2001.

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(3)  IP/04/586 of 3 May 2004.

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