WRITTEN QUESTION P-3217/02

by Arlene McCarthy (PSE) to the Commission

(7 November 2002)

Subject: Competition policy and collective management societies

While EU competition policy recognises the role of copyright management societies in safeguarding the rights and interests of its members, does the Commission consider in the case of BIEM (Bureau Internationale des Sociétés Gérant les Droits d'Enregistrement et de Reproductions Mechaniques) that the fixing of royalty rates at EU level, different to those operated in either Japan or in the UK, constitutes an abuse of a dominant position?

Does the Commission believe that such exclusive rights of copyright management are being exploited in a manner that is both restrictive to competition, contributing to unfair trading and commercial practices, and are detrimental to the consumer?

What steps is the Commission taking to investigate such practices by BIEM?

Would the Commission agree that in light of technological and commercial developments, in particular digital distribution, that the practices and operations of collecting societies should be made more transparent to identify the origin, destination and purpose of royalties charged, in line with EU competition policy?

Answer given by Mr Monti on behalf of the Commission

(9 December 2002)

The application of different royalty rates in the EU constitutes abuse of a dominant position within the meaning of Article 82 of the EC Treaty only if the highest rates are regarded as excessive and the differences are not justified for objective reasons. It is therefore not possible to lay down as a general and abstract rule that there is abuse of a dominant position simply because different royalty rates are charged, without taking account of the particular features of each case. As the Court of Justice held in Tournier and Lucazeau,

Article 82 (ex 86) of the Treaty must be interpreted as meaning that a national copyright-management society holding a dominant position in a substantial part of the common market imposes unfair trading conditions where the royalties which it charges to discothèques are appreciably higher than those charged in other Member States, the rates being compared on a consistent basis. That would not be the case if the copyright-management society in question were able to justify such a difference by reference to objective and relevant dissimilarities between copyright management in the Member State concerned and copyright management in the other Member States.

Both the Commission and the Court of Justice have in the past considered that, in specific cases, certain practices of collective management societies were restrictive of competition. At the same time, it is generally acknowledged that the societies in question play an important role in the management of copyright and related rights, notably because they are able to provide their members and users with a one-stop shop which considerably facilitates access to works and other protected objects. It is not therefore possible to claim that the activities of collective management societies are inherently restrictive of competition. Such a conclusion can be reached only following an investigation into an agreement or specific conduct.

The Commission has not launched an investigation on its own initiative into BIEM. However, it recently received a complaint concerning BIEM. Its inquiries are still at the preliminary stage and it has not yet adopted a position on the complaint.

The Commission considers that, in the light of technological and commercial developments in digital distribution in particular, the practices of collective management societies should be transparent as regards the exploitation of copyright and related rights on the Internet. This position was clearly set out in the recent decision on Simulcasting of 8 October 2002 Case COMP/C2/38 104. The text of the decision is available on the Commission's website: http://europa.eu.int/comm/competition/antitrust/cases/decisions/38014/en.pdf.

Furthermore, as the competition aspects and the rules of the internal market are very closely linked, the Commission would inform the Honourable Member that it has been studying the question of the management of intellectual property rights, and collective management in particular, for several years. It considers that collective management must be fully effective within the internal market and is therefore preparing a notice on the management of intellectual property rights. The notice will take stock of the situation in the sector, the questions raised and possible answers.