# Directive 2014/26/EU of the European Parliament and of the CouncilShow full title

Directive 2014/26/EU of the European Parliament and of the Council of 26 February 2014 on collective management of copyright            and related rights and multi-territorial licensing of rights in musical works for online use in the internal market (Text            with EEA relevance)         

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# Directive 2014/26/EU of the European Parliament and of the Council

# of 26 February 2014

# on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online                        use in the internal market                     

# (Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 50(1) and 53(1) and Article                           62 thereof,                        

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Economic and Social Committee(1),                        

Acting in accordance with the ordinary legislative procedure(2),                        

Whereas:

(1)The Union Directives which have been adopted in the area of copyright and related rights already provide a high level of protection                              for rightholders and thereby a framework wherein the exploitation of content protected by those rights can take place. Those                              Directives contribute to the development and maintenance of creativity. In an internal market where competition is not distorted,                              protecting innovation and intellectual creation also encourages investment in innovative services and products.

(2)The dissemination of content which is protected by copyright and related rights, including books, audiovisual productions                              and recorded music, and services linked thereto, requires the licensing of rights by different holders of copyright and related                              rights, such as authors, performers, producers and publishers. It is normally for the rightholder to choose between the individual                              or collective management of his rights, unless Member States provide otherwise, in compliance with Union law and the international                              obligations of the Union and its Member States. Management of copyright and related rights includes granting of licences to                              users, auditing of users, monitoring of the use of rights, enforcement of copyright and related rights, collection of rights                              revenue derived from the exploitation of rights and the distribution of the amounts due to rightholders. Collective management                              organisations enable rightholders to be remunerated for uses which they would not be in a position to control or enforce themselves,                              including in non-domestic markets.

(3)Article 167 of the Treaty on the Functioning of the European Union (TFEU) requires the Union to take cultural diversity into                              account in its action and to contribute to the flowering of the cultures of the Member States, while respecting their national                              and regional diversity and at the same time bringing the common cultural heritage to the fore. Collective management organisations                              play, and should continue to play, an important role as promoters of the diversity of cultural expression, both by enabling                              the smallest and less popular repertoires to access the market and by providing social, cultural and educational services                              for the benefit of their rightholders and the public.

(4)When established in the Union, collective management organisations should be able to enjoy the freedoms provided by the Treaties                              when representing rightholders who are resident or established in other Member States or granting licences to users who are                              resident or established in other Member States.

(5)There are significant differences in the national rules governing the functioning of collective management organisations,                              in particular as regards their transparency and accountability to their members and rightholders. This has led in a number                              of instances to difficulties, in particular for non-domestic rightholders when they seek to exercise their rights, and to                              poor financial management of the revenues collected. Problems with the functioning of collective management organisations                              lead to inefficiencies in the exploitation of copyright and related rights across the internal market, to the detriment of                              the members of collective management organisations, rightholders and users.

(6)The need to improve the functioning of collective management organisations has already been identified in Commission Recommendation                              2005/737/EC(3). That Recommendation set out a number of principles, such as the freedom of rightholders to choose their collective management                              organisations, equal treatment of categories of rightholders and equitable distribution of royalties. It called on collective                              management organisations to provide users with sufficient information on tariffs and repertoire in advance of negotiations                              between them. It also contained recommendations on accountability, rightholder representation in the decision-making bodies                              of collective management organisations and dispute resolution. However, the Recommendation has been unevenly followed.

(7)The protection of the interests of the members of collective management organisations, rightholders and third parties requires                              that the laws of the Member States relating to copyright management and multi-territorial licensing of online rights in musical                              works should be coordinated with a view to having equivalent safeguards throughout the Union. Therefore, this Directive should                              have as a legal base Article 50(1) TFEU.

(8)The aim of this Directive is to provide for coordination of national rules concerning access to the activity of managing copyright                              and related rights by collective management organisations, the modalities for their governance, and their supervisory framework,                              and it should therefore also have as a legal base Article 53(1) TFEU. In addition, since it is concerned with a sector offering                              services across the Union, this Directive should have as a legal base Article 62 TFEU.

(9)The aim of this Directive is to lay down requirements applicable to collective management organisations, in order to ensure                              a high standard of governance, financial management, transparency and reporting. This should not, however, prevent Member                              States from maintaining or imposing, in relation to collective management organisations established in their territories,                              more stringent standards than those laid down in Title II of this Directive, provided that such more stringent standards are                              compatible with Union law.

(10)Nothing in this Directive should preclude a Member State from applying the same or similar provisions to collective management                              organisations which are established outside the Union but which operate in that Member State.

(11)Nothing in this Directive should preclude collective management organisations from concluding representation agreements with                              other collective management organisations — in compliance with the competition rules laid down by Articles 101 and 102 TFEU                              — in the area of rights management in order to facilitate, improve and simplify the procedures for granting licences to users,                              including for the purposes of single invoicing, under equal, non-discriminatory and transparent conditions, and to offer multi-territorial                              licences also in areas other than those referred to in Title III of this Directive.

(12)This Directive, while applying to all collective management organisations, with the exception of Title III, which applies                              only to collective management organisations managing authors’ rights in musical works for online use on a multi-territorial                              basis, does not interfere with arrangements concerning the management of rights in the Member States such as individual management,                              the extended effect of an agreement between a representative collective management organisation and a user, i.e. extended                              collective licensing, mandatory collective management, legal presumptions of representation and transfer of rights to collective                              management organisations.

(13)This Directive does not affect the possibility for Member States to determine by law, by regulation or by any other specific                              mechanism to that effect, rightholders’ fair compensation for exceptions or limitations to the reproduction right provided                              for in Directive 2001/29/EC of the European Parliament and of the Council(4) and rightholders’ remuneration for derogations from the exclusive right in respect of public lending provided for in Directive                              2006/115/EC of the European Parliament and of the Council(5) applicable in their territory as well as the conditions applicable for their collection.

(14)This Directive does not require collective management organisations to adopt a specific legal form. In practice, those organisations                              operate in various legal forms such as associations, cooperatives or limited liability companies, which are controlled or                              owned by holders of copyright and related rights or by entities representing such rightholders. In some exceptional cases,                              however, due to the legal form of a collective management organisation, the element of ownership or control is not present.                              This is, for example, the case for foundations, which do not have members. None the less, the provisions of this Directive                              should also apply to those organisations. Similarly, Member States should take appropriate measures to prevent the circumvention                              of the obligations under this Directive through the choice of legal form. It should be noted that entities which represent                              rightholders, and which are members of collective management organisations, may be other collective management organisations,                              associations of rightholders, unions or other organisations.

(15)Rightholders should be free to entrust the management of their rights to independent management entities. Such independent                              management entities are commercial entities which differ from collective management organisations, inter alia, because they                              are not owned or controlled by rightholders. However, to the extent that such independent management entities carry out the                              same activities as collective management organisations, they should be obliged to provide certain information to the rightholders                              they represent, collective management organisations, users and the public.

(16)Audiovisual producers, record producers and broadcasters license their own rights, in certain cases alongside rights that                              have been transferred to them by, for instance, performers, on the basis of individually negotiated agreements, and act in                              their own interest. Book, music or newspaper publishers license rights that have been transferred to them on the basis of                              individually negotiated agreements and act in their own interest. Therefore audiovisual producers, record producers, broadcasters                              and publishers should not be regarded as ‘independent management entities’. Furthermore, authors’ and performers’ managers                              and agents acting as intermediaries and representing rightholders in their relations with collective management organisations                              should not be regarded as ‘independent management entities’ since they do not manage rights in the sense of setting tariffs,                              granting licences or collecting money from users.

(17)Collective management organisations should be free to choose to have certain of their activities, such as the invoicing of                              users or the distribution of amounts due to rightholders, carried out by subsidiaries or by other entities that they control.                              In such cases, those provisions of this Directive that would be applicable if the relevant activity were carried out directly                              by a collective management organisation should be applicable to the activities of the subsidiaries or other entities.

(18)In order to ensure that holders of copyright and related rights can benefit fully from the internal market when their rights                              are being managed collectively and that their freedom to exercise their rights is not unduly affected, it is necessary to                              provide for the inclusion of appropriate safeguards in the statute of collective management organisations. Moreover, a collective                              management organisation should not, when providing its management services, discriminate directly or indirectly between rightholders                              on the basis of their nationality, place of residence or place of establishment.

(19)Having regard to the freedoms established in the TFEU, collective management of copyright and related rights should entail                              a rightholder being able freely to choose a collective management organisation for the management of his rights, whether those                              rights be rights of communication to the public or reproduction rights, or categories of rights related to forms of exploitation                              such as broadcasting, theatrical exhibition or reproduction for online distribution, provided that the collective management                              organisation that the rightholder wishes to choose already manages such rights or categories of rights.The rights, categories of rights or types of works and other subject-matter managed by the collective management organisation                              should be determined by the general assembly of members of that organisation if they are not already determined in its statute                              or prescribed by law. It is important that the rights and categories of rights be determined in a manner that maintains a                              balance between the freedom of rightholders to dispose of their works and other subject-matter and the ability of the organisation                              to manage the rights effectively, taking into account in particular the category of rights managed by the organisation and                              the creative sector in which it operates. Taking due account of that balance, rightholders should be able easily to withdraw                              such rights or categories of rights from a collective management organisation and to manage those rights individually or to                              entrust or transfer the management of all or part of them to another collective management organisation or another entity,                              irrespective of the Member State of nationality, residence or establishment of the collective management organisation, the                              other entity or the rightholder. Where a Member State, in compliance with Union law and the international obligations of the                              Union and its Member States, provides for mandatory collective management of rights, rightholders’ choice would be limited                              to other collective management organisations.Collective management organisations managing different types of works and other subject-matter, such as literary, musical                              or photographic works, should also allow this flexibility to rightholders as regards the management of different types of                              works and other subject-matter. As far as non-commercial uses are concerned, Member States should provide that collective                              management organisations take the necessary steps to ensure that their rightholders can exercise the right to grant licences                              for such uses. Such steps should include, inter alia, a decision by the collective management organisation on the conditions                              attached to the exercise of that right as well as the provision to their members of information on those conditions. Collective                              management organisations should inform rightholders of their choices and allow them to exercise the rights related to those                              choices as easily as possible. Rightholders who have already authorised the collective management organisation may be informed                              via the website of the organisation. A requirement for the consent of rightholders in the authorisation to the management                              of each right, category of rights or type of works and other subject-matter should not prevent the rightholders from accepting                              proposed subsequent amendments to that authorisation by tacit agreement in accordance with the conditions set out in national                              law. Neither contractual arrangements according to which a termination or withdrawal by rightholders has an immediate effect                              on licences granted prior to such termination or withdrawal, nor contractual arrangements according to which such licences                              remain unaffected for a certain period of time after such termination or withdrawal, are, as such, precluded by this Directive.                              Such arrangements should not, however, create an obstacle to the full application of this Directive. This Directive should                              not prejudice the possibility for rightholders to manage their rights individually, including for non-commercial uses.

(20)Membership of collective management organisations should be based on objective, transparent and non-discriminatory criteria,                              including as regards publishers who by virtue of an agreement on the exploitation of rights are entitled to a share of the                              income from the rights managed by collective management organisations and to collect such income from the collective management                              organisations. Those criteria should not oblige collective management organisations to accept members the management of whose                              rights, categories of rights or types of works or other subject-matter falls outside their scope of activity. The records                              kept by a collective management organisation should allow for the identification and location of its members and rightholders                              whose rights the organisation represents on the basis of authorisations given by those rightholders.

(21)In order to protect those rightholders whose rights are directly represented by the collective management organisation but                              who do not fulfil its membership requirements, it is appropriate to require that certain provisions of this Directive relating                              to members be also applied to such rightholders. Member States should be able also to provide such rightholders with rights                              to participate in the decision-making process of the collective management organisation.

(22)Collective management organisations should act in the best collective interests of the rightholders they represent. It is                              therefore important to provide for systems which enable the members of a collective management organisation to exercise their                              membership rights by participating in the organisation’s decision-making process. Some collective management organisations                              have different categories of members, which may represent different types of rightholders, such as producers and performers.                              The representation in the decision-making process of those different categories of members should be fair and balanced. The                              effectiveness of the rules on the general assembly of members of collective management organisations would be undermined if                              there were no provisions on how the general assembly should be run. Thus, it is necessary to ensure that the general assembly                              is convened regularly, and at least annually, and that the most important decisions in the collective management organisation                              are taken by the general assembly.

(23)All members of collective management organisations should be allowed to participate and vote in the general assembly of members.                              The exercise of those rights should be subject only to fair and proportionate restrictions. In some exceptional cases, collective                              management organisations are established in the legal form of a foundation, and thus have no members. In such cases, the powers                              of the general assembly of members should be exercised by the body entrusted with the supervisory function. Where collective                              management organisations have entities representing rightholders as their members, as may be the case where a collective management                              organisation is a limited liability company and its members are associations of rightholders, Member States should be able                              to provide that some or all powers of the general assembly of members are to be exercised by an assembly of those rightholders.                              The general assembly of members should, at least, have the power to set the framework of the activities of the management,                              in particular with respect to the use of rights revenue by the collective management organisation. This should, however, be                              without prejudice to the possibility for Member States to provide for more stringent rules on, for example, investments, mergers                              or taking out loans, including a prohibition on any such transactions. Collective management organisations should encourage                              the active participation of their members in the general assembly. The exercise of voting rights should be facilitated for                              members who attend the general assembly and also for those who do not. In addition to being able to exercise their rights                              by electronic means, members should be allowed to participate and vote in the general assembly of members through a proxy.                              Proxy voting should be restricted in cases of conflicts of interest. At the same time, Member States should provide for restrictions                              as regards proxies only if this does not prejudice the appropriate and effective participation of members in the decision-making                              process. In particular, the appointment of proxy-holders contributes to the appropriate and effective participation of members                              in the decision-making process and allows rightholders to have a true opportunity to opt for a collective management organisation                              of their choice, irrespective of the Member State of establishment of the organisation.

(24)Members should be allowed to participate in the continuous monitoring of the management of collective management organisations.                              To that end, those organisations should have a supervisory function appropriate to their organisational structure and should                              allow members to be represented in the body that exercises that function. Depending on the organisational structure of the                              collective management organisation, the supervisory function may be exercised by a separate body, such as a supervisory board,                              or by some or all of the directors in the administrative board who do not manage the business of the collective management                              organisation. The requirement of fair and balanced representation of members should not prevent the collective management                              organisation from appointing third parties to exercise the supervisory function, including persons with relevant professional                              expertise and rightholders who do not fulfil the membership requirements or who are represented by the organisation not directly                              but via an entity which is a member of the collective management organisation.

(25)For reasons of sound management, the management of a collective management organisation must be independent. Managers, whether                              elected as directors or hired or employed by the organisation on the basis of a contract, should be required to declare, prior                              to taking up their position and thereafter on a yearly basis, whether there are conflicts between their interests and those                              of the rightholders that are represented by the collective management organisation. Such annual statements should be also                              made by persons exercising the supervisory function. Member States should be free to require collective management organisations                              to make such statements public or to submit them to public authorities.

(26)Collective management organisations collect, manage and distribute revenue from the exploitation of the rights entrusted to                              them by rightholders. That revenue is ultimately due to rightholders, who may have a direct legal relationship with the organisation,                              or may be represented via an entity which is a member of the collective management organisation or via a representation agreement.                              It is therefore important that a collective management organisation exercise the utmost diligence in collecting, managing                              and distributing that revenue. Accurate distribution is only possible where the collective management organisation maintains                              proper records of membership, licences and use of works and other subject-matter. Relevant data that are required for the                              efficient collective management of rights should also be provided by rightholders and users and verified by the collective                              management organisation.

(27)Amounts collected and due to rightholders should be kept separately in the accounts from any own assets the organisation may                              have. Without prejudice to the possibility for Member States to provide for more stringent rules on investment, including                              a prohibition of investment of the rights revenue, where such amounts are invested, this should be carried out in accordance                              with the general investment and risk management policy of the collective management organisation. In order to maintain a high                              level of protection of the rights of rightholders and to ensure that any income that may arise from the exploitation of such                              rights accrues to their benefit, the investments made and held by the collective management organisation should be managed                              in accordance with criteria which would oblige the organisation to act prudently, while allowing it to decide on the most                              secure and efficient investment policy. This should allow the collective management organisation to opt for an asset allocation                              that suits the precise nature and duration of any exposure to risk of any rights revenue invested and does not unduly prejudice                              any rights revenue owed to rightholders.

(28)Since rightholders are entitled to be remunerated for the exploitation of their rights, it is important that management fees                              do not exceed justified costs of the management of the rights and that any deduction other than in respect of management fees,                              for example a deduction for social, cultural or educational purposes, should be decided by the members of the collective management                              organisation. The collective management organisations should be transparent towards rightholders regarding the rules governing                              such deductions. The same requirements should apply to any decision to use the rights revenue for collective distribution,                              such as scholarships. Rightholders should have access, on a non-discriminatory basis, to any social, cultural or educational                              service funded through such deductions. This Directive should not affect deductions under national law, such as deductions                              for the provision of social services by collective management organisations to rightholders, as regards any aspects that are                              not regulated by this Directive, provided that such deductions are in compliance with Union law.

(29)The distribution and payment of amounts due to individual rightholders or, as the case may be, to categories of rightholders,                              should be carried out in a timely manner and in accordance with the general policy on distribution of the collective management                              organisation concerned, including when they are performed via another entity representing the rightholders. Only objective                              reasons beyond the control of a collective management organisation can justify delay in the distribution and payment of amounts                              due to rightholders. Therefore, circumstances such as the rights revenue having been invested subject to a maturity date should                              not qualify as valid reasons for such a delay. It is appropriate to leave it to Member States to decide on rules ensuring                              timely distribution and the effective search for, and identification of, rightholders in cases where such objective reasons                              occur. In order to ensure that the amounts due to rightholders are appropriately and effectively distributed, without prejudice                              to the possibility for Member States to provide for more stringent rules, it is necessary to require collective management                              organisations to take reasonable and diligent measures, on the basis of good faith, to identify and locate the relevant rightholders.                              It is also appropriate that members of a collective management organisation, to the extent allowed for under national law,                              should decide on the use of any amounts that cannot be distributed in situations where rightholders entitled to those amounts                              cannot be identified or located.

(30)Collective management organisations should be able to manage rights and collect revenue from their exploitation under representation                              agreements with other organisations. To protect the rights of the members of the other collective management organisation,                              a collective management organisation should not distinguish between the rights it manages under representation agreements                              and those it manages directly for its rightholders. Nor should the collective management organisation be allowed to apply                              deductions to the rights revenue collected on behalf of another collective management organisation, other than deductions                              in respect of management fees, without the express consent of the other organisation. It is also appropriate to require collective                              management organisations to distribute and make payments to other organisations on the basis of such representation agreements                              no later than when they distribute and make payments to their own members and to non-member rightholders whom they represent.                              Furthermore, the recipient organisation should in turn be required to distribute the amounts due to the rightholders it represents                              without delay.

(31)Fair and non-discriminatory commercial terms in licensing are particularly important to ensure that users can obtain licences                              for works and other subject-matter in respect of which a collective management organisation represents rights, and to ensure                              the appropriate remuneration of rightholders. Collective management organisations and users should therefore conduct licensing                              negotiations in good faith and apply tariffs which should be determined on the basis of objective and non-discriminatory criteria.                              It is appropriate to require that the licence fee or remuneration determined by collective management organisations be reasonable                              in relation to, inter alia, the economic value of the use of the rights in a particular context. Finally, collective management                              organisations should respond without undue delay to users’ requests for licences.

(32)In the digital environment, collective management organisations are regularly required to license their repertoire for totally                              new forms of exploitation and business models. In such cases, and in order to foster an environment conducive to the development                              of such licences, without prejudice to the application of competition law rules, collective management organisations should                              have the flexibility required to provide, as swiftly as possible, individualised licences for innovative online services,                              without the risk that the terms of those licences could be used as a precedent for determining the terms for other licences.

(33)In order to ensure that collective management organisations can comply with the obligations set out in this Directive, users                              should provide those organisations with relevant information on the use of the rights represented by the collective management                              organisations. This obligation should not apply to natural persons acting for purposes outside their trade, business, craft                              or profession, who therefore fall outside the definition of user as laid down in this Directive. Moreover, the information                              required by collective management organisations should be limited to what is reasonable, necessary and at the users’ disposal                              in order to enable such organisations to perform their functions, taking into account the specific situation of small and                              medium-sized enterprises. That obligation could be included in an agreement between a collective management organisation and                              a user; this does not preclude national statutory rights to information. The deadlines applicable to the provision of information                              by users should be such as to allow collective management organisations to meet the deadlines set for the distribution of                              amounts due to rightholders. This Directive should be without prejudice to the possibility for Member States to require collective                              management organisations established in their territory to issue joint invoices.

(34)In order to enhance the trust of rightholders, users and other collective management organisations in the management of rights                              by collective management organisations, each collective management organisation should comply with specific transparency requirements.                              Each collective management organisation or its member being an entity responsible for attribution or payment of amounts due                              to rightholders should therefore be required to provide certain information to individual rightholders at least once a year,                              such as the amounts attributed or paid to them and the deductions made. Collective management organisations should also be                              required to provide sufficient information, including financial information, to the other collective management organisations                              whose rights they manage under representation agreements.

(35)In order to ensure that rightholders, other collective management organisations and users have access to information on the                              scope of activity of the organisation and the works or other subject-matter that it represents, a collective management organisation                              should provide information on those issues in response to a duly justified request. The question whether, and to what extent,                              reasonable fees can be charged for providing this service should be left to national law. Each collective management organisation                              should also make public information on its structure and on the way in which it carries out its activities, including in particular                              its statutes and general policies on management fees, deductions and tariffs.

(36)In order to ensure that rightholders are in a position to monitor and compare the respective performances of collective management                              organisations, such organisations should make public an annual transparency report comprising comparable audited financial                              information specific to their activities. Collective management organisations should also make public an annual special report,                              forming part of the annual transparency report, on the use of amounts dedicated to social, cultural and educational services.                              This Directive should not prevent a collective management organisation from publishing the information required by the annual                              transparency report in a single document, for example as part of its annual financial statements, or in separate reports.

(37)Providers of online services which make use of musical works, such as music services that allow consumers to download music                              or to listen to it in streaming mode, as well as other services providing access to films or games where music is an important                              element, must first obtain the right to use such works. Directive 2001/29/EC requires that a licence be obtained for each                              of the rights in the online exploitation of musical works. In respect of authors, those rights are the exclusive right of                              reproduction and the exclusive right of communication to the public of musical works, which includes the right of making available.                              Those rights may be managed by the individual rightholders themselves, such as authors or music publishers, or by collective                              management organisations that provide collective management services to rightholders. Different collective management organisations                              may manage authors’ rights of reproduction and communication to the public. Furthermore, there are cases where several rightholders                              have rights in the same work and may have authorised different organisations to license their respective shares of rights                              in the work. Any user wishing to provide an online service offering a wide choice of musical works to consumers needs to aggregate                              rights in works from different rightholders and collective management organisations.

(38)While the internet knows no borders, the online market for music services in the Union is still fragmented, and a digital                              single market has not yet been fully achieved. The complexity and difficulty associated with the collective management of                              rights in Europe has, in a number of cases, exacerbated the fragmentation of the European digital market for online music                              services. This situation is in stark contrast to the rapidly growing demand on the part of consumers for access to digital                              content and associated innovative services, including across national borders.

(39)Commission Recommendation 2005/737/EC promoted a new regulatory environment better suited to the management, at Union level,                              of copyright and related rights for the provision of legitimate online music services. It recognised that, in an era of online                              exploitation of musical works, commercial users need a licensing policy that corresponds to the ubiquity of the online environment                              and is multi-territorial. However, the Recommendation has not been sufficient to encourage the widespread multi-territorial                              licensing of online rights in musical works or to address the specific demands of multi-territorial licensing.

(40)In the online music sector, where collective management of authors’ rights on a territorial basis remains the norm, it is                              essential to create conditions conducive to the most effective licensing practices by collective management organisations                              in an increasingly cross-border context. It is therefore appropriate to provide a set of rules prescribing basic conditions                              for the provision by collective management organisations of multi-territorial collective licensing of authors’ rights in musical                              works for online use, including lyrics. The same rules should apply to such licensing for all musical works, including musical                              works incorporated in audiovisual works. However, online services solely providing access to musical works in sheet music                              form should not be covered. The provisions of this Directive should ensure the necessary minimum quality of cross-border services                              provided by collective management organisations, notably in terms of transparency of repertoire represented and accuracy of                              financial flows related to the use of the rights. They should also set out a framework for facilitating the voluntary aggregation                              of music repertoire and rights, thus reducing the number of licences a user needs to operate a multi-territory, multi-repertoire                              service. Those provisions should enable a collective management organisation to request another organisation to represent                              its repertoire on a multi-territorial basis where it cannot or does not wish to fulfil the requirements itself. There should                              be an obligation on the requested organisation, provided that it already aggregates repertoire and offers or grants multi-territorial                              licences, to accept the mandate of the requesting organisation. The development of legal online music services across the                              Union should also contribute to the fight against online infringements of copyright.

(41)The availability of accurate and comprehensive information on musical works, rightholders and the rights that each collective                              management organisation is authorised to represent in a given territory is of particular importance for an effective and transparent                              licensing process, for the subsequent processing of the users’ reports and the related invoicing of service providers, and                              for the distribution of amounts due. For that reason, collective management organisations granting multi-territorial licences                              for musical works should be able to process such detailed data quickly and accurately. This requires the use of databases                              on ownership of rights that are licensed on a multi-territorial basis, containing data that allow for the identification of                              works, rights and rightholders that a collective management organisation is authorised to represent and of the territories                              covered by the authorisation. Any changes to that information should be taken into account without undue delay and the databases                              should be continually updated. Those databases should also help to match information on works with information on phonograms                              or any other fixation in which the work has been incorporated. It is also important to ensure that prospective users and rightholders,                              as well as collective management organisations, have access to the information they need in order to identify the repertoire                              that those organisations are representing. Collective management organisations should be able to take measures to protect                              the accuracy and integrity of the data, to control their reuse or to protect commercially sensitive information.

(42)In order to ensure that the data on the music repertoire they process are as accurate as possible, collective management organisations                              granting multi-territorial licences in musical works should be required to update their databases continuously and without                              delay as necessary. They should establish easily accessible procedures to enable online service providers, as well as rightholders                              and other collective management organisations, to inform them of any inaccuracy that the organisations’ databases may contain                              in respect of works they own or control, including rights — in whole or in part — and territories for which they have mandated                              the relevant collective management organisation to act, without however jeopardising the veracity and integrity of the data                              held by the collective management organisation. Since Directive 95/46/EC of the European Parliament and of the Council(6) grants to every data subject the right to obtain rectification, erasure or blocking of inaccurate or incomplete data, this                              Directive should also ensure that inaccurate information regarding rightholders or other collective management organisations                              in the case of multi-territorial licences is to be corrected without undue delay. Collective management organisations should                              also have the capacity to process electronically the registration of works and authorisations to manage rights. Given the                              importance of information automation for the fast and effective processing of data, collective management organisations should                              provide for the use of electronic means for the structured communication of that information by rightholders. Collective management                              organisations should, as far as possible, ensure that such electronic means take into account the relevant voluntary industry                              standards or practices developed at international or Union level.

(43)Industry standards for music use, sales reporting and invoicing are instrumental in improving efficiency in the exchange of                              data between collective management organisations and users. Monitoring the use of licences should respect fundamental rights,                              including the right to respect for private and family life and the right to protection of personal data. In order to ensure                              that these efficiency gains result in faster financial processing and ultimately in earlier payments to rightholders, collective                              management organisations should be required to invoice service providers and to distribute amounts due to rightholders without                              delay. For this requirement to be effective, it is necessary that users provide collective management organisations with accurate                              and timely reports on the use of works. Collective management organisations should not be required to accept users’ reports                              in proprietary formats when widely used industry standards are available. Collective management organisations should not be                              prevented from outsourcing services relating to the granting of multi-territorial licences for online rights in musical works.                              Sharing or consolidation of back-office capabilities should help the organisations to improve management services and rationalise                              investments in data management tools.

(44)Aggregating different music repertoires for multi-territorial licensing facilitates the licensing process and, by making all                              repertoires accessible to the market for multi-territorial licensing, enhances cultural diversity and contributes to reducing                              the number of transactions an online service provider needs in order to offer services. This aggregation of repertoires should                              facilitate the development of new online services, and should also result in a reduction of transaction costs being passed                              on to consumers. Therefore, collective management organisations that are not willing or not able to grant multi-territorial                              licences directly in their own music repertoire should be encouraged on a voluntary basis to mandate other collective management                              organisations to manage their repertoire on a non-discriminatory basis. Exclusivity in agreements on multi-territorial licences                              would restrict the choices available to users seeking multi-territorial licences and also restrict the choices available to                              collective management organisations seeking administration services for their repertoire on a multi-territorial basis. Therefore,                              all representation agreements between collective management organisations providing for multi-territorial licensing should                              be concluded on a non-exclusive basis.

(45)The transparency of the conditions under which collective management organisations manage online rights is of particular importance                              to members of collective management organisations. Collective management organisations should therefore provide sufficient                              information to their members on the main terms of any agreement mandating any other collective management organisation to                              represent those members’ online music rights for the purposes of multi-territorial licensing.

(46)It is also important to require any collective management organisations that offer or grant multi-territorial licences to                              agree to represent the repertoire of any collective management organisations that decide not to do so directly. To ensure                              that this requirement is not disproportionate and does not go beyond what is necessary, the requested collective management                              organisation should only be required to accept the representation if the request is limited to the online right or categories                              of online rights that it represents itself. Moreover, this requirement should only apply to collective management organisations                              which aggregate repertoire and should not extend to collective management organisations which provide multi-territorial licences                              for their own repertoire only. Nor should it apply to collective management organisations which merely aggregate rights in                              the same works for the purpose of being able to license jointly both the right of reproduction and the right of communication                              to the public in respect of such works. To protect the interests of the rightholders of the mandating collective management                              organisation and to ensure that small and less well-known repertoires in Member States can access the internal market on equal                              terms, it is important that the repertoire of the mandating collective management organisation be managed on the same conditions                              as the repertoire of the mandated collective management organisation and that it is included in offers addressed by the mandated                              collective management organisation to online service providers. The management fee charged by the mandated collective management                              organisation should allow that organisation to recoup the necessary and reasonable investments incurred. Any agreement whereby                              a collective management organisation mandates another organisation or organisations to grant multi-territorial licences in                              its own music repertoire for online use should not prevent the first-mentioned collective management organisation from continuing                              to grant licences limited to the territory of the Member State where that organisation is established, in its own repertoire                              and in any other repertoire it may be authorised to represent in that territory.

(47)The objectives and effectiveness of the rules on multi-territorial licensing by collective management organisations would                              be significantly jeopardised if rightholders were not able to exercise such rights in respect of multi-territorial licences                              when the collective management organisation to which they have granted their rights did not grant or offer multi-territorial                              licences and furthermore did not want to mandate another collective management organisation to do so. For this reason, it                              would be important in such circumstances to enable rightholders to exercise the right to grant the multi-territorial licences                              required by online service providers themselves or through another party or parties, by withdrawing from their original collective                              management organisation their rights to the extent necessary for multi-territorial licensing for online uses, and to leave                              the same rights with their original organisation for the purposes of mono-territorial licensing.

(48)Broadcasting organisations generally rely on a licence from a local collective management organisation for their own broadcasts                              of television and radio programmes which include musical works. That licence is often limited to broadcasting activities.                              A licence for online rights in musical works would be required in order to allow such television or radio broadcasts to be                              also available online. To facilitate the licensing of online rights in musical works for the purposes of simultaneous and                              delayed transmission online of television and radio broadcasts, it is necessary to provide for a derogation from the rules                              that would otherwise apply to the multi-territorial licensing of online rights in musical works. Such a derogation should                              be limited to what is necessary in order to allow access to television or radio programmes online and to material having a                              clear and subordinate relationship to the original broadcast produced for purposes such as supplementing, previewing or reviewing                              the television or radio programme concerned. That derogation should not operate so as to distort competition with other services                              which give consumers access to individual musical or audiovisual works online, nor lead to restrictive practices, such as                              market or customer sharing, which would be in breach of Article 101 or 102 TFEU.

(49)It is necessary to ensure the effective enforcement of the provisions of national law adopted pursuant to this Directive.                              Collective management organisations should offer their members specific procedures for handling complaints. Those procedures                              should also be made available to other rightholders directly represented by the organisation and to other collective management                              organisations on whose behalf it manages rights under a representation agreement. Furthermore, Member States should be able                              to provide that disputes between collective management organisations, their members, rightholders or users as to the application                              of this Directive can be submitted to a rapid, independent and impartial alternative dispute resolution procedure. In particular,                              the effectiveness of the rules on multi-territorial licensing of online rights in musical works could be undermined if disputes                              between collective management organisations and other parties were not resolved quickly and efficiently. As a result, it is                              appropriate to provide, without prejudice to the right of access to a tribunal, for the possibility of easily accessible,                              efficient and impartial out-of-court procedures, such as mediation or arbitration, for resolving conflicts between, on the                              one hand, collective management organisations granting multi-territorial licences and, on the other, online service providers,                              rightholders or other collective management organisations. This Directive neither prescribes a specific manner in which such                              alternative dispute resolution should be organised, nor determines which body should carry it out, provided that its independence,                              impartiality and efficiency are guaranteed. Finally, it is also appropriate to require that Member States have independent,                              impartial and effective dispute resolution procedures, via bodies possessing expertise in intellectual property law or via                              courts, suitable for settling commercial disputes between collective management organisations and users on existing or proposed                              licensing conditions or on a breach of contract.

(50)Member States should establish appropriate procedures by means of which it will be possible to monitor compliance by collective                              management organisations with this Directive. While it is not appropriate for this Directive to restrict the choice of Member                              States as to competent authorities, nor as regards the *ex-ante* or *ex-post* nature of the control over collective management organisations, it should be ensured that such authorities are capable of                              addressing in an effective and timely manner any concern that may arise in the application of this Directive. Member States                              should not be obliged to set up new competent authorities. Moreover, it should also be possible for members of a collective                              management organisation, rightholders, users, collective management organisations and other interested parties to notify a                              competent authority in respect of activities or circumstances which, in their opinion, constitute a breach of law by collective                              management organisations and, where relevant, users. Member States should ensure that competent authorities have the power                              to impose sanctions or measures where provisions of national law implementing this Directive are not complied with. This Directive                              does not provide for specific types of sanctions or measures, provided that they are effective, proportionate and dissuasive.                              Such sanctions or measures may include orders to dismiss directors who have acted negligently, inspections at the premises                              of a collective management organisation or, in cases where an authorisation is issued for an organisation to operate, the                              withdrawal of such authorisation. This Directive should remain neutral as regards the prior authorisation and supervision                              regimes in the Member States, including a requirement for the representativeness of the collective management organisation,                              in so far as those regimes are compatible with Union law and do not create an obstacle to the full application of this Directive.

(51)In order to ensure that the requirements for multi-territorial licensing are complied with, specific provisions on the monitoring                              of their implementation should be laid down. The competent authorities of the Member States and the Commission should cooperate                              with each other to that end. Member States should provide each other with mutual assistance by way of exchange of information                              between their competent authorities in order to facilitate the monitoring of collective management organisations.

(52)It is important for collective management organisations to respect the rights to private life and personal data protection                              of any rightholder, member, user and other individual whose personal data they process. Directive 95/46/EC governs the processing                              of personal data carried out in the Member States in the context of that Directive and under the supervision of the Member                              States’ competent authorities, in particular the public independent authorities designated by the Member States. Rightholders                              should be given appropriate information about the processing of their data, the recipients of those data, time limits for                              the retention of such data in any database, and the way in which rightholders can exercise their rights to access, correct                              or delete their personal data concerning them in accordance with Directive 95/46/EC. In particular, unique identifiers which                              allow for the indirect identification of a person should be treated as personal data within the meaning of that Directive.

(53)Provisions on enforcement measures should be without prejudice to the competencies of national independent public authorities                              established by the Member States pursuant to Directive 95/46/EC to monitor compliance with national provisions adopted in                              implementation of that Directive.

(54)This Directive respects the fundamental rights and observes the principles enshrined in the Charter of Fundamental Rights                              of the European Union (‘the Charter’). Provisions in this Directive relating to dispute resolution should not prevent parties                              from exercising their right of access to a tribunal as guaranteed in the Charter.

(55)Since the objectives of this Directive, namely to improve the ability of their members to exercise control over the activities                              of collective management organisations, to guarantee sufficient transparency by collective management organisations and to                              improve the multi-territorial licensing of authors’ rights in musical works for online use, cannot be sufficiently achieved                              by Member States but can rather, by reason of their scale and effects, be better achieved at Union level, the Union may adopt                              measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance                              with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in                              order to achieve those objectives.

(56)The provisions of this Directive are without prejudice to the application of rules on competition, and any other relevant                              law in other areas including confidentiality, trade secrets, privacy, access to documents, the law of contract and private                              international law relating to the conflict of laws and the jurisdiction of courts, and workers’ and employers’ freedom of                              association and their right to organise.

(57)In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory                              documents(7), Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one                              or more documents explaining the relationship between the components of a directive and the corresponding parts of national                              transposition instruments. With regard to this Directive, the legislator considers the transmission of such documents to be                              justified.

(58)The European Data Protection Supervisor was consulted in accordance with Article 28(2) of Regulation (EC) No 45/2001 of the                              European Parliament and of the Council(8) and delivered an opinion on 9 October 2012,

HAVE ADOPTED THIS DIRECTIVE:

## TITLE IU.K.**GENERAL PROVISIONS**

### Article 1U.K.Subject-matter

This Directive lays down requirements necessary to ensure the proper functioning of the management of copyright and related                     rights by collective management organisations. It also lays down requirements for multi-territorial licensing by collective                     management organisations of authors’ rights in musical works for online use.                  

### Article 2U.K.Scope

1.Titles I, II, IV and V with the exception of Article 34(2) and Article 38 apply to all collective management organisations                        established in the Union.                  

2.Title III and Article 34(2) and Article 38 apply to collective management organisations established in the Union managing                        authors’ rights in musical works for online use on a multi-territorial basis.                  

3.The relevant provisions of this Directive apply to entities directly or indirectly owned or controlled, wholly or in part,                        by a collective management organisation, provided that such entities carry out an activity which, if carried out by the collective                        management organisation, would be subject to the provisions of this Directive.                  

4.Article 16(1), Articles 18 and 20, points (a), (b), (c), (e), (f) and (g) of Article 21(1) and Articles 36 and 42 apply to                        all independent management entities established in the Union.                  

### Article 3U.K.Definitions

For the purposes of this Directive, the following definitions shall apply:

‘collective management organisation’ means any organisation which is authorised by law or by way of assignment, licence or                              any other contractual arrangement to manage copyright or rights related to copyright on behalf of more than one rightholder,                              for the collective benefit of those rightholders, as its sole or main purpose, and which fulfils one or both of the following                              criteria:                           

it is owned or controlled by its members;

it is organised on a not-for-profit basis;

‘independent management entity’ means any organisation which is authorised by law or by way of assignment, licence or any                              other contractual arrangement to manage copyright or rights related to copyright on behalf of more than one rightholder, for                              the collective benefit of those rightholders, as its sole or main purpose, and which is:                           

neither owned nor controlled, directly or indirectly, wholly or in part, by rightholders; and

organised on a for-profit basis;

‘rightholder’ means any person or entity, other than a collective management organisation, that holds a copyright or related                              right or, under an agreement for the exploitation of rights or by law, is entitled to a share of the rights revenue;                           

‘member ’ means a rightholder or an entity representing rightholders, including other collective management organisations                              and associations of rightholders, fulfilling the membership requirements of the collective management organisation and admitted                              by it;                           

‘statute’ means the memorandum and articles of association, the statute, the rules or documents of constitution of a collective                              management organisation;                           

‘general assembly of members’ means the body in the collective management organisation wherein members participate and exercise                              their voting rights, regardless of the legal form of the organisation;                           

‘director’ means:

where national law or the statute of the collective management organisation provides for a unitary board, any member of the                                       administrative board;                                    

where national law or the statute of the collective management organisation provides for a dual board, any member of the management                                       board or the supervisory board;                                    

‘rights revenue’ means income collected by a collective management organisation on behalf of rightholders, whether deriving                              from an exclusive right, a right to remuneration or a right to compensation;                           

‘management fees’ means the amounts charged, deducted or offset by a collective management organisation from rights revenue                              or from any income arising from the investment of rights revenue in order to cover the costs of its management of copyright                              or related rights;                           

‘representation agreement’ means any agreement between collective management organisations whereby one collective management                              organisation mandates another collective management organisation to manage the rights it represents, including an agreement                              concluded under Articles 29 and 30;                           

‘user’ means any person or entity that is carrying out acts subject to the authorisation of rightholders, remuneration of                              rightholders or payment of compensation to rightholders and is not acting in the capacity of a consumer;                           

‘repertoire’ means the works in respect of which a collective management organisation manages rights;

‘multi-territorial licence’ means a licence which covers the territory of more than one Member State;

‘online rights in musical works’ means any of the rights of an author in a musical work provided for under Articles 2 and                              3 of Directive 2001/29/EC which are required for the provision of an online service.                           

## TITLE IIU.K.**COLLECTIVE MANAGEMENT ORGANISATIONS**

### *CHAPTER 1*U.K.***Representation of rightholders and membership and organisation of collective management organisations***

#### Article 4U.K.General principles

Member States shall ensure that collective management organisations act in the best interests of the rightholders whose rights                     they represent and that they do not impose on them any obligations which are not objectively necessary for the protection                     of their rights and interests or for the effective management of their rights.                  

#### Article 5U.K.Rights of rightholders

1.Member States shall ensure that rightholders have the rights laid down in paragraphs 2 to 8 and that those rights are set                        out in the statute or membership terms of the collective management organisation.                  

2.Rightholders shall have the right to authorise a collective management organisation of their choice to manage the rights,                        categories of rights or types of works and other subject-matter of their choice, for the territories of their choice, irrespective                        of the Member State of nationality, residence or establishment of either the collective management organisation or the rightholder.                        Unless the collective management organisation has objectively justified reasons to refuse management, it shall be obliged                        to manage such rights, categories of rights or types of works and other subject-matter, provided that their management falls                        within the scope of its activity.                  

3.Rightholders shall have the right to grant licences for non-commercial uses of any rights, categories of rights or types of                        works and other subject-matter that they may choose.                  

4.Rightholders shall have the right to terminate the authorisation to manage rights, categories of rights or types of works                        and other subject-matter granted by them to a collective management organisation or to withdraw from a collective management                        organisation any of the rights, categories of rights or types of works and other subject-matter of their choice, as determined                        pursuant to paragraph 2, for the territories of their choice, upon serving reasonable notice not exceeding six months. The                        collective management organisation may decide that such termination or withdrawal is to take effect only at the end of the                        financial year.                  

5.If there are amounts due to a rightholder for acts of exploitation which occurred before the termination of the authorisation                        or the withdrawal of rights took effect, or under a licence granted before such termination or withdrawal took effect, the                        rightholder shall retain his rights under Articles 12, 13, 18, 20, 28 and 33.                  

6.A collective management organisation shall not restrict the exercise of rights provided for under paragraphs 4 and 5 by requiring,                        as a condition for the exercise of those rights, that the management of rights or categories of rights or types of works and                        other subject-matter which are subject to the termination or the withdrawal be entrusted to another collective management                        organisation.                  

7.In cases where a rightholder authorises a collective management organisation to manage his rights, he shall give consent specifically                        for each right or category of rights or type of works and other subject-matter which he authorises the collective management                        organisation to manage. Any such consent shall be evidenced in documentary form.                  

8.A collective management organisation shall inform rightholders of their rights under paragraphs 1 to 7, as well as of any                        conditions attached to the right set out in paragraph 3, before obtaining their consent to its managing any right or category                        of rights or type of works and other subject-matter.                  

A collective management organisation shall inform those rightholders who have already authorised it of their rights under                     paragraphs 1 to 7, as well as of any conditions attached to the right set out in paragraph 3, by 10 October 2016.                  

#### Article 6U.K.Membership rules of collective management organisations

1.Member States shall ensure that collective management organisations comply with the rules laid down in paragraphs 2 to 5.                  

2.A collective management organisation shall accept rightholders and entities representing rightholders, including other collective                        management organisations and associations of rightholders, as members if they fulfil the membership requirements, which shall                        be based on objective, transparent and non-discriminatory criteria. Those membership requirements shall be included in the                        statute or membership terms of the collective management organisation and shall be made publicly available. In cases where                        a collective management organisation refuses to accept a request for membership, it shall provide the rightholder with a clear                        explanation of the reasons for its decision.                  

3.The statute of a collective management organisation shall provide for appropriate and effective mechanisms for the participation                        of its members in the organisation’s decision-making process. The representation of the different categories of members in                        the decision-making process shall be fair and balanced.                  

4.A collective management organisation shall allow its members to communicate with it by electronic means, including for the                        purposes of exercising members’ rights.                  

5.A collective management organisation shall keep records of its members and shall regularly update those records.                  

#### Article 7U.K.Rights of rightholders who are not members of the collective management organisation

1.Member States shall ensure that collective management organisations comply with the rules laid down in Article 6(4), Article                        20, Article 29(2) and Article 33 in respect of rightholders who have a direct legal relationship by law or by way of assignment,                        licence or any other contractual arrangement with them but are not their members.                  

2.Member States may apply other provisions of this Directive to the rightholders referred to in paragraph 1.                  

#### Article 8U.K.General assembly of members of the collective management organisation

1.Member States shall ensure that the general assembly of members is organised in accordance with the rules laid down in paragraphs                        2 to 10.                  

2.A general assembly of members shall be convened at least once a year.                  

3.The general assembly of members shall decide on any amendments to the statute and to the membership terms of the collective                        management organisation, where those terms are not regulated by the statute.                  

4.The general assembly of members shall decide on the appointment or dismissal of the directors, review their general performance                        and approve their remuneration and other benefits such as monetary and non-monetary benefits, pension awards and entitlements,                        rights to other awards and rights to severance pay.                  

In a collective management organisation with a dual board system, the general assembly of members shall not decide on the                     appointment or dismissal of members of the management board or approve their remuneration and other benefits where the power                     to take such decisions is delegated to the supervisory board.                  

5.In accordance with the provisions laid down in Chapter 2 of Title II, the general assembly of members shall decide at least                        on the following issues:                  

(a)the general policy on the distribution of amounts due to rightholders;                  

(b)the general policy on the use of non-distributable amounts;                  

(c)the general investment policy with regard to rights revenue and to any income arising from the investment of rights revenue;                  

(d)the general policy on deductions from rights revenue and from any income arising from the investment of rights revenue;                  

(e)the use of non-distributable amounts;                  

(f)the risk management policy;                  

(g)the approval of any acquisition, sale or hypothecation of immovable property;                  

(h)the approval of mergers and alliances, the setting-up of subsidiaries, and the acquisition of other entities or shares or                        rights in other entities;                  

(i)the approval of taking out loans, granting loans or providing security for loans.                  

6.The general assembly of members may delegate the powers listed in points (f), (g), (h) and (i) of paragraph 5, by a resolution                        or by a provision in the statute, to the body exercising the supervisory function.                  

7.For the purposes of points (a) to (d) of paragraph 5, Member States may require the general assembly of members to determine                        more detailed conditions for the use of the rights revenue and the income arising from the investment of rights revenue.                  

8.The general assembly of members shall control the activities of the collective management organisation by, at least, deciding                        on the appointment and removal of the auditor and approving the annual transparency report referred to in Article 22.                  

Member States may allow alternative systems or modalities for the appointment and removal of the auditor, provided that those                     systems or modalities are designed to ensure the independence of the auditor from the persons who manage the business of the                     collective management organisation.                  

9.All members of the collective management organisation shall have the right to participate in, and the right to vote at, the                        general assembly of members. However, Member States may allow for restrictions on the right of the members of the collective                        management organisation to participate in, and to exercise voting rights at, the general assembly of members, on the basis                        of one or both of the following criteria:                  

(a)duration of membership;                  

(b)amounts received or due to a member,                  

provided that such criteria are determined and applied in a manner that is fair and proportionate.

The criteria laid down in points (a) and (b) of the first subparagraph shall be included in the statute or the membership                     terms of the collective management organisation and shall be made publicly available in accordance with Articles 19 and 21.                  

10.Every member of a collective management organisation shall have the right to appoint any other person or entity as a proxy                        holder to participate in, and vote at, the general assembly of members on his behalf, provided that such appointment does                        not result in a conflict of interest which might occur, for example, where the appointing member and the proxy holder belong                        to different categories of rightholders within the collective management organisation.                  

However, Member States may provide for restrictions concerning the appointment of proxy holders and the exercise of the voting                     rights of the members they represent if such restrictions do not prejudice the appropriate and effective participation of                     members in the decision-making process of a collective management organisation.                  

Each proxy shall be valid for a single general assembly of members. The proxy holder shall enjoy the same rights in the general                     assembly of members as those to which the appointing member would be entitled. The proxy holder shall cast votes in accordance                     with the instructions issued by the appointing member.                  

11.Member States may decide that the powers of the general assembly of members may be exercised by an assembly of delegates elected                        at least every four years by the members of the collective management organisation, provided that:                  

(a)appropriate and effective participation of members in the collective management organisation’s decision-making process is                        ensured; and                  

(b)the representation of the different categories of members in the assembly of delegates is fair and balanced.                  

The rules laid down in paragraphs 2 to 10 shall apply to the assembly of delegates mutatis mutandis.

12.Member States may decide that where a collective management organisation, by reason of its legal form, does not have a general                        assembly of members, the powers of that assembly are to be exercised by the body exercising the supervisory function. The                        rules laid down in paragraphs 2 to 5, 7 and 8 shall apply mutatis mutandis to such body exercising the supervisory function.                  

13.Member States may decide that where a collective management organisation has members who are entities representing rightholders,                        all or some of the powers of the general assembly of members are to be exercised by an assembly of those rightholders. The                        rules laid down in paragraphs 2 to 10 shall apply mutatis mutandis to the assembly of rightholders.                  

#### Article 9U.K.Supervisory function

1.Member States shall ensure that each collective management organisation has in place a supervisory function for continuously                        monitoring the activities and the performance of the duties of the persons who manage the business of the organisation.                  

2.There shall be fair and balanced representation of the different categories of members of the collective management organisation                        in the body exercising the supervisory function.                  

3.Each person exercising the supervisory function shall make an annual individual statement on conflicts of interest, containing                        the information referred to in the second subparagraph of Article 10(2), to the general assembly of members.                  

4.The body exercising the supervisory function shall meet regularly and shall have at least the following powers:                  

(a)to exercise the powers delegated to it by the general assembly of members, including under Article 8(4) and (6);                  

(b)to monitor the activities and the performance of the duties of the persons referred to in Article 10, including the implementation                        of the decisions of the general assembly of members and, in particular, of the general policies listed in points (a) to (d)                        of Article 8(5).                  

5.The body exercising the supervisory function shall report on the exercise of its powers to the general assembly of members                        at least once a year.                  

#### Article 10U.K.Obligations of the persons who manage the business of the collective management organisation

1.Member States shall ensure that each collective management organisation takes all necessary measures so that the persons who                        manage its business do so in a sound, prudent and appropriate manner, using sound administrative and accounting procedures                        and internal control mechanisms.                  

2.Member States shall ensure that collective management organisations put in place and apply procedures to avoid conflicts of                        interest, and where such conflicts cannot be avoided, to identify, manage, monitor and disclose actual or potential conflicts                        of interest in such a way as to prevent them from adversely affecting the collective interests of the rightholders whom the                        organisation represents.                  

The procedures referred to in the first subparagraph shall include an annual individual statement by each of the persons referred                     to in paragraph 1 to the general assembly of members, containing the following information:                  

(a)any interests in the collective management organisation;                  

(b)any remuneration received in the preceding financial year from the collective management organisation, including in the form                        of pension schemes, benefits in kind and other types of benefits;                  

(c)any amounts received in the preceding financial year as a rightholder from the collective management organisation;                  

(d)a declaration concerning any actual or potential conflict between any personal interests and those of the collective management                        organisation or between any obligations owed to the collective management organisation and any duty owed to any other natural                        or legal person.                  

### *CHAPTER 2*U.K.***Management of rights revenue***

#### Article 11U.K.Collection and use of rights revenue

1.Member States shall ensure that collective management organisations comply with the rules laid down in paragraphs 2 to 5.                  

2.A collective management organisation shall be diligent in the collection and management of rights revenue.                  

3.A collective management organisation shall keep separate in its accounts:                  

(a)rights revenue and any income arising from the investment of rights revenue; and                  

(b)any own assets it may have and income arising from such assets, from management fees or from other activities.                  

4.A collective management organisation shall not be permitted to use rights revenue or any income arising from the investment                        of rights revenue for purposes other than distribution to rightholders, except where it is allowed to deduct or offset its                        management fees in compliance with a decision taken in accordance with point (d) of Article 8(5) or to use the rights revenue                        or any income arising from the investment of rights revenue in compliance with a decision taken in accordance with Article                        8(5).                  

5.Where a collective management organisation invests rights revenue or any income arising from the investment of rights revenue,                        it shall do so in the best interests of the rightholders whose rights it represents, in accordance with the general investment                        and risk management policy referred to in points (c) and (f) of Article 8(5) and having regard to the following rules:                  

(a)where there is any potential conflict of interest, the collective management organisation shall ensure that the investment                        is made in the sole interest of those rightholders;                  

(b)the assets shall be invested in order to ensure the security, quality, liquidity and profitability of the portfolio as a whole;                  

(c)the assets shall be properly diversified in order to avoid excessive reliance on any particular asset and accumulations of                        risks in the portfolio as a whole.                  

#### Article 12U.K.Deductions

1.Member States shall ensure that where a rightholder authorises a collective management organisation to manage his rights,                        the collective management organisation is required to provide the rightholder with information on management fees and other                        deductions from the rights revenue and from any income arising from the investment of rights revenue, before obtaining his                        consent to its managing his rights.                  

2.Deductions shall be reasonable in relation to the services provided by the collective management organisation to rightholders,                        including, where appropriate, the services referred to in paragraph 4, and shall be established on the basis of objective                        criteria.                  

3.Management fees shall not exceed the justified and documented costs incurred by the collective management organisation in                        managing copyright and related rights.                  

Member States shall ensure that the requirements applicable to the use and the transparency of the use of amounts deducted                     or offset in respect of management fees apply to any other deductions made in order to cover the costs of managing copyright                     and related rights.                  

4.Where a collective management organisation provides social, cultural or educational services funded through deductions from                        rights revenue or from any income arising from the investment of rights revenue, such services shall be provided on the basis                        of fair criteria, in particular as regards access to, and the extent of, those services.                  

#### Article 13U.K.Distribution of amounts due to rightholders

1.Without prejudice to Article 15(3) and Article 28, Member States shall ensure that each collective management organisation                        regularly, diligently and accurately distributes and pays amounts due to rightholders in accordance with the general policy                        on distribution referred to in point (a) of Article 8(5).                  

Member States shall also ensure that collective management organisations or their members who are entities representing rightholders                     distribute and pay those amounts to rightholders as soon as possible but no later than nine months from the end of the financial                     year in which the rights revenue was collected, unless objective reasons relating in particular to reporting by users, identification                     of rights, rightholders or matching of information on works and other subject-matter with rightholders prevent the collective                     management organisation or, where applicable, its members from meeting that deadline.                  

2.Where the amounts due to rightholders cannot be distributed within the deadline set in paragraph 1 because the relevant rightholders                        cannot be identified or located and the exception to that deadline does not apply, those amounts shall be kept separate in                        the accounts of the collective management organisation.                  

3.The collective management organisation shall take all necessary measures, consistent with paragraph 1, to identify and locate                        the rightholders. In particular, at the latest three months after the expiry of the deadline set in paragraph 1, the collective                        management organisation shall make available information on works and other subject-matter for which one or more rightholders                        have not been identified or located to:                  

(a)the rightholders that it represents or the entities representing rightholders, where such entities are members of the collective                        management organisation; and                  

(b)all collective management organisations with which it has concluded representation agreements.                  

The information referred to in the first subparagraph shall include, where available, the following:

(a)the title of the work or other subject-matter;                  

(b)the name of the rightholder;                  

(c)the name of the relevant publisher or producer; and                  

(d)any other relevant information available which could assist in identifying the rightholder.                  

The collective management organisation shall also verify the records referred to in Article 6(5) and other readily available                     records. If the abovementioned measures fail to produce results, the collective management organisation shall make that information                     available to the public at the latest one year after the expiry of the three-month period.                  

4.Where the amounts due to rightholders cannot be distributed after three years from the end of the financial year in which                        the collection of the rights revenue occurred, and provided that the collective management organisation has taken all necessary                        measures to identify and locate the rightholders referred to in paragraph 3, those amounts shall be deemed non-distributable.                  

5.The general assembly of members of a collective management organisation shall decide on the use of the non-distributable amounts                        in accordance with point (b) of Article 8(5), without prejudice to the right of rightholders to claim such amounts from the                        collective management organisation in accordance with the laws of the Member States on the statute of limitations of claims.                  

6.Member States may limit or determine the permitted uses of non-distributable amounts, inter alia, by ensuring that such amounts                        are used in a separate and independent way in order to fund social, cultural and educational activities for the benefit of                        rightholders.                  

### *CHAPTER 3*U.K.***Management of rights on behalf of other collective management organisations***

#### Article 14U.K.Rights managed under representation agreements

Member States shall ensure that a collective management organisation does not discriminate against any rightholder whose rights                     it manages under a representation agreement, in particular with respect to applicable tariffs, management fees, and the conditions                     for the collection of the rights revenue and distribution of amounts due to rightholders.                  

#### Article 15U.K.Deductions and payments in representation agreements

1.Member States shall ensure that a collective management organisation does not make deductions, other than in respect of management                        fees, from the rights revenue derived from the rights it manages on the basis of a representation agreement, or from any income                        arising from the investment of that rights revenue, unless the other collective management organisation that is party to the                        representation agreement expressly consents to such deductions.                  

2.The collective management organisation shall regularly, diligently and accurately distribute and pay amounts due to other                        collective management organisations.                  

3.The collective management organisation shall carry out such distribution and payments to the other collective management organisation                        as soon as possible but no later than nine months from the end of the financial year in which the rights revenue was collected,                        unless objective reasons relating in particular to reporting by users, identification of rights, rightholders or matching                        of information on works and other subject-matter with rightholders prevent the collective management organisation from meeting                        that deadline.                  

The other collective management organisation, or, where it has as members entities representing rightholders, those members,                     shall distribute and pay the amounts due to rightholders as soon as possible but no later than six months from receipt of                     those amounts, unless objective reasons relating in particular to reporting by users, identification of rights, rightholders                     or matching of information on works and other subject-matter with rightholders prevent the collective management organisation                     or, where applicable, its members from meeting that deadline.                  

### *CHAPTER 4*U.K.***Relations with users***

#### Article 16U.K.Licensing

1.Member States shall ensure that collective management organisations and users conduct negotiations for the licensing of rights                        in good faith. Collective management organisations and users shall provide each other with all necessary information.                  

2.Licensing terms shall be based on objective and non-discriminatory criteria. When licensing rights, collective management                        organisations shall not be required to use, as a precedent for other online services, licensing terms agreed with a user where                        the user is providing a new type of online service which has been available to the public in the Union for less than three                        years.                  

Rightholders shall receive appropriate remuneration for the use of their rights. Tariffs for exclusive rights and rights to                     remuneration shall be reasonable in relation to, inter alia, the economic value of the use of the rights in trade, taking                     into account the nature and scope of the use of the work and other subject-matter, as well as in relation to the economic                     value of the service provided by the collective management organisation. Collective management organisations shall inform                     the user concerned of the criteria used for the setting of those tariffs.                  

3.Collective management organisations shall reply without undue delay to requests from users, indicating, inter alia, the information                        needed in order for the collective management organisation to offer a licence.                  

Upon receipt of all relevant information, the collective management organisation shall, without undue delay, either offer                     a licence or provide the user with a reasoned statement explaining why it does not intend to license a particular service.                  

4.A collective management organisation shall allow users to communicate with it by electronic means, including, where appropriate,                        for the purpose of reporting on the use of the licence.                  

#### Article 17U.K.Users’ obligations

Member States shall adopt provisions to ensure that users provide a collective management organisation, within an agreed or                     pre-established time and in an agreed or pre-established format, with such relevant information at their disposal on the use                     of the rights represented by the collective management organisation as is necessary for the collection of rights revenue and                     for the distribution and payment of amounts due to rightholders. When deciding on the format for the provision of such information,                     collective management organisations and users shall take into account, as far as possible, voluntary industry standards.                  

### *CHAPTER 5*U.K.***Transparency and reporting***

#### Article 18U.K.Information provided to rightholders on the management of their rights

1.Without prejudice to paragraph 2 of this Article and Article 19 and Article 28(2), Member States shall ensure that a collective                        management organisation makes available, not less than once a year, to each rightholder to whom it has attributed rights revenue                        or made payments in the period to which the information relates, at least the following information:                  

(a)any contact details which the rightholder has authorised the collective management organisation to use in order to identify                        and locate the rightholder;                  

(b)the rights revenue attributed to the rightholder;                  

(c)the amounts paid by the collective management organisation to the rightholder per category of rights managed and per type                        of use;                  

(d)the period during which the use took place for which amounts were attributed and paid to the rightholder, unless objective                        reasons relating to reporting by users prevent the collective management organisation from providing this information;                  

(e)deductions made in respect of management fees;                  

(f)deductions made for any purpose other than in respect of management fees, including those that may be required by national                        law for the provision of any social, cultural or educational services;                  

(g)any rights revenue attributed to the rightholder which is outstanding for any period.                  

2.Where a collective management organisation attributes rights revenue and has as members entities which are responsible for                        the distribution of rights revenue to rightholders, the collective management organisation shall provide the information listed                        in paragraph 1 to those entities, provided that they do not have that information in their possession. Member States shall                        ensure that the entities make at least the information listed in paragraph 1 available, not less than once a year, to each                        rightholder to whom they have attributed rights revenue or made payments in the period to which the information relates.                  

#### Article 19U.K.Information provided to other collective management organisations on the management of rights under representation agreements

Member States shall ensure that a collective management organisation makes at least the following information available, not                     less than once a year and by electronic means, to collective management organisations on whose behalf it manages rights under                     a representation agreement, for the period to which the information relates:                  

the rights revenue attributed, the amounts paid by the collective management organisation per category of rights managed,                              and per type of use, for the rights it manages under the representation agreement, and any rights revenue attributed which                              is outstanding for any period;                           

deductions made in respect of management fees;

deductions made for any purpose other than in respect of management fees as referred to in Article 15;

information on any licences granted or refused with regard to works and other subject-matter covered by the representation                              agreement;                           

resolutions adopted by the general assembly of members in so far as those resolutions are relevant to the management of the                              rights under the representation agreement.                           

#### Article 20U.K.Information provided to rightholders, other collective management organisations and users on request

Without prejudice to Article 25, Member States shall ensure that, in response to a duly justified request, a collective management                     organisation makes at least the following information available by electronic means and without undue delay to any collective                     management organisation on whose behalf it manages rights under a representation agreement or to any rightholder or to any                     user:                  

the works or other subject-matter it represents, the rights it manages, directly or under representation agreements, and the                              territories covered; or                           

where, due to the scope of activity of the collective management organisation, such works or other subject-matter cannot be                              determined, the types of works or of other subject-matter it represents, the rights it manages and the territories covered.                           

#### Article 21U.K.Disclosure of information to the public

1.Member States shall ensure that a collective management organisation makes public at least the following information:                  

(a)its statute;                  

(b)its membership terms and the terms of termination of authorisation to manage rights, if these are not included in the statute;                  

(c)standard licensing contracts and standard applicable tariffs, including discounts;                  

(d)the list of the persons referred to in Article 10;                  

(e)its general policy on distribution of amounts due to rightholders;                  

(f)its general policy on management fees;                  

(g)its general policy on deductions, other than in respect of management fees, from rights revenue and from any income arising                        from the investment of rights revenue, including deductions for the purposes of social, cultural and educational services;                  

(h)a list of the representation agreements it has entered into, and the names of the collective management organisations with                        which those representation agreements have been concluded;                  

(i)the general policy on the use of non-distributable amounts;                  

(j)the complaint handling and dispute resolution procedures available in accordance with Articles 33, 34 and 35.                  

2.The collective management organisation shall publish, and keep up to date, on its public website the information referred                        to in paragraph 1.                  

#### Article 22U.K.Annual transparency report

1.Member States shall ensure that a collective management organisation, irrespective of its legal form under national law, draws                        up and makes public an annual transparency report, including the special report referred to in paragraph 3, for each financial                        year no later than eight months following the end of that financial year.                  

The collective management organisation shall publish on its website the annual transparency report, which shall remain available                     to the public on that website for at least five years.                  

2.The annual transparency report shall contain at least the information set out in the Annex.                  

3.A special report shall address the use of the amounts deducted for the purposes of social, cultural and educational services                        and shall contain at least the information set out in point 3 of the Annex.                  

4.The accounting information included in the annual transparency report shall be audited by one or more persons empowered by                        law to audit accounts in accordance with Directive 2006/43/EC of the European Parliament and of the Council(9).                  

The audit report, including any qualifications thereto, shall be reproduced in full in the annual transparency report.

For the purposes of this paragraph, accounting information shall comprise the financial statements referred to in point 1(a)                     of the Annex and any financial information referred to in points (g) and (h) of point 1 and in point 2 of the Annex.                  

## TITLE IIIU.K.**MULTI-TERRITORIAL LICENSING OF ONLINE RIGHTS IN MUSICAL WORKS BY COLLECTIVE MANAGEMENT ORGANISATIONS**

### Article 23U.K.Multi-territorial licensing in the internal market

Member States shall ensure that collective management organisations established in their territory comply with the requirements                     of this Title when granting multi-territorial licences for online rights in musical works.                  

### Article 24U.K.Capacity to process multi-territorial licences

1.Member States shall ensure that a collective management organisation which grants multi-territorial licences for online rights                        in musical works has sufficient capacity to process electronically, in an efficient and transparent manner, data needed for                        the administration of such licences, including for the purposes of identifying the repertoire and monitoring its use, invoicing                        users, collecting rights revenue and distributing amounts due to rightholders.                  

2.For the purposes of paragraph 1, a collective management organisation shall comply, at least, with the following conditions:                  

(a)to have the ability to identify accurately the musical works, wholly or in part, which the collective management organisation                        is authorised to represent;                  

(b)to have the ability to identify accurately, wholly or in part, with respect to each relevant territory, the rights and their                        corresponding rightholders for each musical work or share therein which the collective management organisation is authorised                        to represent;                  

(c)to make use of unique identifiers in order to identify rightholders and musical works, taking into account, as far as possible,                        voluntary industry standards and practices developed at international or Union level;                  

(d)to make use of adequate means in order to identify and resolve in a timely and effective manner inconsistencies in data held                        by other collective management organisations granting multi-territorial licences for online rights in musical works.                  

### Article 25U.K.Transparency of multi-territorial repertoire information

1.Member States shall ensure that a collective management organisation which grants multi-territorial licences for online rights                        in musical works provides to online service providers, to rightholders whose rights it represents and to other collective                        management organisations, by electronic means, in response to a duly justified request, up-to-date information allowing the                        identification of the online music repertoire it represents. This shall include:                  

(a)the musical works represented;                  

(b)the rights represented wholly or in part; and                  

(c)the territories covered.                  

2.The collective management organisation may take reasonable measures, where necessary, to protect the accuracy and integrity                        of the data, to control their reuse and to protect commercially sensitive information.                  

### Article 26U.K.Accuracy of multi-territorial repertoire information

1.Member States shall ensure that a collective management organisation which grants multi-territorial licences for online rights                        in musical works has in place arrangements to enable rightholders, other collective management organisations and online service                        providers to request a correction of the data referred to in the list of conditions under Article 24(2) or the information                        provided under Article 25, where such rightholders, collective management organisations and online service providers, on the                        basis of reasonable evidence, believe that the data or the information are inaccurate in respect of their online rights in                        musical works. Where the claims are sufficiently substantiated, the collective management organisation shall ensure that the                        data or the information are corrected without undue delay.                  

2.The collective management organisation shall provide rightholders whose musical works are included in its own music repertoire                        and rightholders who have entrusted the management of their online rights in musical works to it in accordance with Article                        31 with the means of submitting to it in electronic form information concerning their musical works, their rights in those                        works and the territories in respect of which the rightholders authorise the organisation. When doing so, the collective management                        organisation and the rightholders shall take into account, as far as possible, voluntary industry standards or practices regarding                        the exchange of data developed at international or Union level, allowing rightholders to specify the musical work, wholly                        or in part, the online rights, wholly or in part, and the territories in respect of which they authorise the organisation.                  

3.Where a collective management organisation mandates another collective management organisation to grant multi-territorial                        licences for the online rights in musical works under Articles 29 and 30, the mandated collective management organisation                        shall also apply paragraph 2 of this Article with respect to the rightholders whose musical works are included in the repertoire                        of the mandating collective management organisation, unless the collective management organisations agree otherwise.                  

### Article 27U.K.Accurate and timely reporting and invoicing

1.Member States shall ensure that a collective management organisation monitors the use of online rights in musical works which                        it represents, wholly or in part, by online service providers to which it has granted a multi-territorial licence for those                        rights.                  

2.The collective management organisation shall offer online service providers the possibility of reporting by electronic means                        the actual use of online rights in musical works and online service providers shall accurately report the actual use of those                        works. The collective management organisation shall offer the use of a least one method of reporting which takes into account                        voluntary industry standards or practices developed at international or Union level for the electronic exchange of such data.                        The collective management organisation may refuse to accept reporting by the online service provider in a proprietary format                        if the organisation allows for reporting using an industry standard for the electronic exchange of data.                  

3.The collective management organisation shall invoice the online service provider by electronic means. The collective management                        organisation shall offer the use of a least one format which takes into account voluntary industry standards or practices                        developed at international or Union level. The invoice shall identify the works and rights which are licensed, wholly or in                        part, on the basis of the data referred to in the list of conditions under Article 24(2), and the corresponding actual uses,                        to the extent that this is possible on the basis of the information provided by the online service provider and the format                        used to provide that information. The online service provider may not refuse to accept the invoice because of its format if                        the collective management organisation is using an industry standard.                  

4.The collective management organisation shall invoice the online service provider accurately and without delay after the actual                        use of the online rights in that musical work is reported, except where this is not possible for reasons attributable to the                        online service provider.                  

5.The collective management organisation shall have in place adequate arrangements enabling the online service provider to challenge                        the accuracy of the invoice, including when the online service provider receives invoices from one or more collective management                        organisations for the same online rights in the same musical work.                  

### Article 28U.K.Accurate and timely payment to rightholders

1.Without prejudice to paragraph 3, Member States shall ensure that a collective management organisation which grants multi-territorial                        licences for online rights in musical works distributes amounts due to rightholders accruing from such licences accurately                        and without delay after the actual use of the work is reported, except where this is not possible for reasons attributable                        to the online service provider.                  

2.Without prejudice to paragraph 3, the collective management organisation shall provide at least the following information                        to rightholders together with each payment it makes under paragraph 1:                  

(a)the period during which the uses took place for which amounts are due to rightholders and the territories in which the uses                        took place;                  

(b)the amounts collected, deductions made and amounts distributed by the collective management organisation for each online right                        in any musical work which rightholders have authorised the collective management organisation, wholly or in part, to represent;                  

(c)the amounts collected for rightholders, deductions made, and amounts distributed by the collective management organisation                        in respect of each online service provider.                  

3.Where a collective management organisation mandates another collective management organisation to grant multi-territorial                        licences for the online rights in musical works under Articles 29 and 30, the mandated collective management organisation                        shall distribute the amounts referred to in paragraph 1 accurately and without delay, and shall provide the information referred                        to in paragraph 2 to the mandating collective management organisation. The mandating collective management organisation shall                        be responsible for the subsequent distribution of such amounts and the provision of such information to rightholders, unless                        the collective management organisations agree otherwise.                  

### Article 29U.K.Agreements between collective management organisations for multi-territorial licensing

1.Member States shall ensure that any representation agreement between collective management organisations whereby a collective                        management organisation mandates another collective management organisation to grant multi-territorial licences for the online                        rights in musical works in its own music repertoire is of a non-exclusive nature. The mandated collective management organisation                        shall manage those online rights on a non-discriminatory basis.                  

2.The mandating collective management organisation shall inform its members of the main terms of the agreement, including its                        duration and the costs of the services provided by the mandated collective management organisation.                  

3.The mandated collective management organisation shall inform the mandating collective management organisation of the main                        terms according to which the latter’s online rights are to be licensed, including the nature of the exploitation, all provisions                        which relate to or affect the licence fee, the duration of the licence, the accounting periods and the territories covered.                  

### Article 30U.K.Obligation to represent another collective management organisation for multi-territorial licensing

1.Member States shall ensure that where a collective management organisation which does not grant or offer to grant multi-territorial                        licences for the online rights in musical works in its own repertoire requests another collective management organisation                        to enter into a representation agreement to represent those rights, the requested collective management organisation is required                        to agree to such a request if it is already granting or offering to grant multi-territorial licences for the same category                        of online rights in musical works in the repertoire of one or more other collective management organisations.                  

2.The requested collective management organisation shall respond to the requesting collective management organisation in writing                        and without undue delay.                  

3.Without prejudice to paragraphs 5 and 6, the requested collective management organisation shall manage the represented repertoire                        of the requesting collective management organisation on the same conditions as those which it applies to the management of                        its own repertoire.                  

4.The requested collective management organisation shall include the represented repertoire of the requesting collective management                        organisation in all offers it addresses to online service providers.                  

5.The management fee for the service provided by the requested collective management organisation to the requesting organisation                        shall not exceed the costs reasonably incurred by the requested collective management organisation.                  

6.The requesting collective management organisation shall make available to the requested collective management organisation                        information relating to its own music repertoire required for the provision of multi-territorial licences for online rights                        in musical works. Where information is insufficient or provided in a form that does not allow the requested collective management                        organisation to meet the requirements of this Title, the requested collective management organisation shall be entitled to                        charge for the costs reasonably incurred in meeting such requirements or to exclude those works for which information is insufficient                        or cannot be used.                  

### Article 31U.K.Access to multi-territorial licensing

Member States shall ensure that where a collective management organisation does not grant or offer to grant multi-territorial                     licences for online rights in musical works or does not allow another collective management organisation to represent those                     rights for such purpose by 10 April 2017, rightholders who have authorised that collective management organisation to represent                     their online rights in musical works can withdraw from that collective management organisation the online rights in musical                     works for the purposes of multi-territorial licensing in respect of all territories without having to withdraw the online                     rights in musical works for the purposes of mono-territorial licensing, so as to grant multi-territorial licences for their                     online rights in musical works themselves or through any other party they authorise or through any collective management organisation                     complying with the provisions of this Title.                  

### Article 32U.K.Derogation for online music rights required for radio and television programmes

The requirements under this Title shall not apply to collective management organisations when they grant, on the basis of                     the voluntary aggregation of the required rights, in compliance with the competition rules under Articles 101 and 102 TFEU,                     a multi-territorial licence for the online rights in musical works required by a broadcaster to communicate or make available                     to the public its radio or television programmes simultaneously with or after their initial broadcast as well as any online                     material, including previews, produced by or for the broadcaster which is ancillary to the initial broadcast of its radio                     or television programme.                  

## TITLE IVU.K.**ENFORCEMENT MEASURES**

### Article 33U.K.Complaints procedures

1.Member States shall ensure that collective management organisations make available to their members, and to collective management                        organisations on whose behalf they manage rights under a representation agreement, effective and timely procedures for dealing                        with complaints, particularly in relation to authorisation to manage rights and termination or withdrawal of rights, membership                        terms, the collection of amounts due to rightholders, deductions and distributions.                  

2.Collective management organisations shall respond in writing to complaints by members or by collective management organisations                        on whose behalf they manage rights under a representation agreement. Where the collective management organisation rejects                        a complaint, it shall give reasons.                  

### Article 34U.K.Alternative dispute resolution procedures

1.Member States may provide that disputes between collective management organisations, members of collective management organisations,                        rightholders or users regarding the provisions of national law adopted pursuant to the requirements of this Directive can                        be submitted to a rapid, independent and impartial alternative dispute resolution procedure.                  

2.Member States shall ensure, for the purposes of Title III, that the following disputes relating to a collective management                        organisation established in their territory which grants or offers to grant multi-territorial licences for online rights in                        musical works can be submitted to an independent and impartial alternative dispute resolution procedure:                  

(a)disputes with an actual or potential online service provider regarding the application of Articles 16, 25, 26 and 27;                  

(b)disputes with one or more rightholders regarding the application of Articles 25, 26, 27, 28, 29, 30 and 31;                  

(c)disputes with another collective management organisation regarding the application of Articles 25, 26, 27, 28, 29 and 30.                  

### Article 35U.K.Dispute resolution

1.Member States shall ensure that disputes between collective management organisations and users concerning, in particular,                        existing and proposed licensing conditions or a breach of contract can be submitted to a court, or if appropriate, to another                        independent and impartial dispute resolution body where that body has expertise in intellectual property law.                  

2.Articles 33 and 34 and paragraph 1 of this Article shall be without prejudice to the right of parties to assert and defend                        their rights by bringing an action before a court.                  

### Article 36U.K.Compliance

1.Member States shall ensure that compliance by collective management organisations established in their territory with the                        provisions of national law adopted pursuant to the requirements laid down in this Directive is monitored by competent authorities                        designated for that purpose.                  

2.Member States shall ensure that procedures exist enabling members of a collective management organisation, rightholders, users,                        collective management organisations and other interested parties to notify the competent authorities designated for that purpose                        of activities or circumstances which, in their opinion, constitute a breach of the provisions of national law adopted pursuant                        to the requirements laid down in this Directive.                  

3.Member States shall ensure that the competent authorities designated for that purpose have the power to impose appropriate                        sanctions or to take appropriate measures where the provisions of national law adopted in implementation of this Directive                        have not been complied with. Those sanctions and measures shall be effective, proportionate and dissuasive.                  

Member States shall notify the Commission of the competent authorities referred to in this Article and in Articles 37 and                     38 by 10 April 2016. The Commission shall publish the information received in that regard.                  

### Article 37U.K.Exchange of information between competent authorities

1.In order to facilitate the monitoring of the application of this Directive, each Member State shall ensure that a request                        for information received from a competent authority of another Member State, designated for that purpose, concerning matters                        relevant to the application of this Directive, in particular with regard to the activities of collective management organisations                        established in the territory of the requested Member State, is responded to without undue delay by the competent authority                        designated for that purpose, provided that the request is duly justified.                  

2.Where a competent authority considers that a collective management organisation established in another Member State but acting                        within its territory may not be complying with the provisions of the national law of the Member State in which that collective                        management organisation is established which have been adopted pursuant to the requirements laid down in this Directive, it                        may transmit all relevant information to the competent authority of the Member State in which the collective management organisation                        is established, accompanied where appropriate by a request to that authority that it take appropriate action within its competence.                        The requested competent authority shall provide a reasoned reply within three months.                  

3.Matters as referred to in paragraph 2 may also be referred by the competent authority making such a request to the expert                        group established in accordance with Article 41.                  

### Article 38U.K.Cooperation for the development of multi-territorial licensing

1.The Commission shall foster a regular exchange of information between the competent authorities designated for that purpose                        in Member States, and between those authorities and the Commission, on the situation and development of multi-territorial                        licensing.                  

2.The Commission shall conduct regular consultations with representatives of rightholders, collective management organisations,                        users, consumers and other interested parties on their experience with the application of the provisions of Title III of this                        Directive. The Commission shall provide competent authorities with all relevant information that emerges from those consultations,                        within the framework of the exchange of information provided for in paragraph 1.                  

3.Member States shall ensure that by 10 October 2017, their competent authorities provide the Commission with a report on the                        situation and development of multi-territorial licensing in their territory. The report shall include information on, in particular,                        the availability of multi-territorial licences in the Member State concerned and compliance by collective management organisations                        with the provisions of national law adopted in implementation of Title III of this Directive, together with an assessment                        of the development of multi-territorial licensing of online rights in musical works by users, consumers, rightholders and                        other interested parties.                  

4.On the basis of the reports received pursuant to paragraph 3 and the information gathered pursuant to paragraphs 1 and 2,                        the Commission shall assess the application of Title III of this Directive. If necessary, and where appropriate on the basis                        of a specific report, it shall consider further steps to address any identified problems. That assessment shall cover, in                        particular, the following:                  

(a)the number of collective management organisations meeting the requirements of Title III;                  

(b)the application of Articles 29 and 30, including the number of representation agreements concluded by collective management                        organisations pursuant to those Articles;                  

(c)the proportion of repertoire in the Member States which is available for licensing on a multi-territorial basis.                  

## TITLE VU.K.**REPORTING AND FINAL PROVISIONS**

### Article 39U.K.Notification of collective management organisations

By 10 April 2016, Member States shall provide the Commission, on the basis of the information at their disposal, with a list                     of the collective management organisations established in their territories.                  

Member States shall notify any changes to that list to the Commission without undue delay.

The Commission shall publish that information and keep it up to date.

### Article 40U.K.Report

By 10 April 2021, the Commission shall assess the application of this Directive and submit to the European Parliament and                     to the Council a report on the application of this Directive. That report shall include an assessment of the impact of this                     Directive on the development of cross-border services, on cultural diversity, on the relations between collective management                     organisations and users and on the operation in the Union of collective management organisations established outside the Union,                     and, if necessary, on the need for a review. The Commission’s report shall be accompanied, if appropriate, by a legislative                     proposal.                  

### Article 41U.K.Expert group

An expert group is hereby established. It shall be composed of representatives of the competent authorities of the Member                     States. The expert group shall be chaired by a representative of the Commission and shall meet either on the initiative of                     the chairman or at the request of the delegation of a Member State. The tasks of the group shall be as follows:                  

to examine the impact of the transposition of this Directive on the functioning of collective management organisations and                              independent management entities in the internal market, and to highlight any difficulties;                           

to organise consultations on all questions arising from the application of this Directive;

to facilitate the exchange of information on relevant developments in legislation and case-law, as well as relevant economic,                              social, cultural and technological developments, especially in relation to the digital market in works and other subject-matter.                           

### Article 42U.K.Protection of personal data

The processing of personal data carried out within the framework of this Directive shall be subject to Directive 95/46/EC.

### Article 43U.K.Transposition

1.Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive                        by 10 April 2016. They shall immediately inform the Commission thereof.                  

When Member States adopt those measures, they shall contain a reference to this Directive or shall be accompanied by such                     reference on the occasion of their official publication. The methods of making such reference shall be laid down by Member                     States.                  

2.Member States shall communicate to the Commission the text of the main measures of national law which they adopt in the field                        covered by this Directive.                  

### Article 44U.K.Entry into force

This Directive shall enter into force on the twentieth day following that of its publication in the *Official Journal of the European Union*.                  

### Article 45U.K.Addressees

This Directive is addressed to the Member States.

Done at Strasbourg, 26 February 2014.

*For the European Parliament*                            

*The President*                            

M. Schulz                            

*For the Council*                            

*The President*                            

D. Kourkoulas                            

## ANNEXU.K.

### 1.Information to be provided in the annual transparency report referred to in Article 22(2):U.K.

financial statements comprising a balance-sheet or a statement of assets and liabilities, an income and expenditure account                              for the financial year and a cash-flow statement;                           

a report on the activities in the financial year;

information on refusals to grant a licence pursuant to Article 16(3);

a description of the legal and governance structure of the collective management organisation;

information on any entities directly or indirectly owned or controlled, wholly or in part, by the collective management organisation;

information on the total amount of remuneration paid to the persons referred in Article 9(3) and Article 10 in the previous                              year, and on other benefits granted to them;                           

the financial information referred to in point 2 of this Annex;

a special report on the use of any amounts deducted for the purposes of social, cultural and educational services, containing                              the information referred to in point 3 of this Annex.                           

### 2.Financial information to be provided in the annual transparency report:U.K.

financial information on rights revenue, per category of rights managed and per type of use (e.g. broadcasting, online, public                              performance), including information on the income arising from the investment of rights revenue and the use of such income                              (whether it is distributed to rightholders or other collective management organisations, or otherwise used);                           

financial information on the cost of rights management and other services provided by the collective management organisation                              to rightholders, with a comprehensive description of at least the following items:                           

all operating and financial costs, with a breakdown per category of rights managed and, where costs are indirect and cannot                                       be attributed to one or more categories of rights, an explanation of the method used to allocate such indirect costs;                                    

operating and financial costs, with a breakdown per category of rights managed and, where costs are indirect and cannot be                                       attributed to one or more categories of rights, an explanation of the method used to allocate such indirect costs, only with                                       regard to the management of rights, including management fees deducted from or offset against rights revenue or any income                                       arising from the investment of rights revenue in accordance with Article 11(4) and Article 12(1), (2) and (3);                                    

operating and financial costs with regard to services other than the management of rights, but including social, cultural                                       and educational services;                                    

resources used to cover costs;

deductions made from rights revenues, with a breakdown per category of rights managed and per type of use and the purpose                                       of the deduction, such as costs relating to the management of rights or to social, cultural or educational services;                                    

the percentages that the cost of the rights management and other services provided by the collective management organisation                                       to rightholders represents compared to the rights revenue in the relevant financial year, per category of rights managed,                                       and, where costs are indirect and cannot be attributed to one or more categories of rights, an explanation of the method used                                       to allocate such indirect costs;                                    

financial information on amounts due to rightholders, with a comprehensive description of at least the following items:

the total amount attributed to rightholders, with a breakdown per category of rights managed and type of use;

the total amount paid to rightholders, with a breakdown per category of rights managed and type of use;

the frequency of payments, with a breakdown per category of rights managed and per type of use;

the total amount collected but not yet attributed to rightholders, with a breakdown per category of rights managed and type                                       of use, and indicating the financial year in which those amounts were collected;                                    

the total amount attributed to but not yet distributed to rightholders, with a breakdown per category of rights managed and                                       type of use, and indicating the financial year in which those amounts were collected;                                    

where a collective management organisation has not carried out the distribution and payments within the deadline set in Article                                       13(1), the reasons for the delay;                                    

the total non-distributable amounts, along with an explanation of the use to which those amounts have been put;

information on relationships with other collective management organisations, with a description of at least the following                              items:                           

amounts received from other collective management organisations and amounts paid to other collective management organisations,                                       with a breakdown per category of rights, per type of use and per organisation;                                    

management fees and other deductions from the rights revenue due to other collective management organisations, with a breakdown                                       per category of rights, per type of use and per organisation;                                    

management fees and other deductions from the amounts paid by other collective management organisations, with a breakdown                                       per category of rights and per organisation;                                    

amounts distributed directly to rightholders originating from other collective management organisations, with a breakdown                                       per category of rights and per organisation.                                    

### 3.Information to be provided in the special report referred to in Article 22(3):U.K.

the amounts deducted for the purposes of social, cultural and educational services in the financial year, with a breakdown                              per type of purpose and, for each type of purpose, with a breakdown per category of rights managed and per type of use;                           

an explanation of the use of those amounts, with a breakdown per type of purpose including the costs of managing amounts deducted                              to fund social, cultural and educational services and of the separate amounts used for social, cultural and educational services.                           

1

OJ C 44, 15.2.2013, p. 104.                           

2

Position of the European Parliament of 4 February 2014 (not yet published in the Official Journal) and decision of the Council                              of 20 February 2014.                           

3

Commission Recommendation 2005/737/EC of 18 May 2005 on collective cross-border management of copyright and related rights                              for legitimate online music services (OJ L 276, 21.10.2005, p. 54).                           

4

Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects                              of copyright and related rights in the information society (OJ L 167, 22.6.2001, p. 10).                           

5

Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right                              and on certain rights related to copyright in the field of intellectual property (OJ L 376, 27.12.2006, p. 28).                           

6

Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with                              regard to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, p. 31).                           

7

OJ C 369, 17.12.2011, p. 14.                           

8

Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals                              with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data                              (OJ L 8, 12.1.2001, p. 1).                           

9

Directive 2006/43/EC of the European Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts and                              consolidated account, amending Council Directives 78/660/EEC and 83/349/EEC and repealing Council Directive 84/253/EEC (OJ L 157, 9.6.2006, p. 87).