WRITTEN QUESTION E-2255/96 by Klaus-Heiner Lehne (PPE) to the Commission (9 August 1996)

Subject: Competition between copyright management societies (music collecting societies)

In its Green Paper on copyright in the information society, the European Commission takes the view that the present national monopoly arrangements for music collecting societies should remain and that any move towards competition between collecting societies is not envisaged. The following questions arise in this connection:

1. Does the Commission believe that sufficient consideration will be given to the interests of the consumer in these circumstances?

2. Do not the provisions of the Treaties, such as Articles 7a and 59 of the EEC Treaty, require the introduction of Europe-wide competition between collecting societies? Is there not the risk that differing fee structures operated by management societies in the music sector will bring about inequalities in the internal market?

3. What, in the Commission's view, are the arguments against the introduction of competition between the various collecting societies?

4. Does not the introduction of competition between collecting societies provide the opportunity to implement market-based fees and thus serve the interests of the consumer?

Answer given by Mr Monti on behalf of the Commission (12 November 1996)

The management of rights was among the questions examined during the wide-ranging consultations undertaken on the basis of the Green Paper on copyright and related rights in the information society ((COM(95) 382 final. )). In that document the Commission did not comment on the structure of rights management societies but looked instead at rights management methods and services in the information society.

Collective management is one of the methods of rights management. It is generally considered appropriate for literary and artistic works since it enables a satisfactory balance to be struck between the interests of rightholders and the culture industry, on the one hand, and those exploiting the works, on the other. Accordingly, the Commission has always taken the important role played by collective management into account when preparing legislation. The specific characteristics of collective management therefore generally justify a position of exclusivity for management societies vis-à-vis users, so that rightholders and users alike can derive maximum benefit. Although management societies thus often find themselves in a de facto dominant position, there are in fact no rules precluding the establishment of rival management societies. In some Member States, rival societies handle the same set of rights. In practice, there are a number of instances in which this leads to higher administrative costs both for the societies and for users, and hence to a loss of revenue for rightholders and a diminution in legal certainty.

Although collective management societies occupy a de facto dominant position, the way they are set up and operate is governed by a number of rules that have not yet been harmonized at Community level. Nevertheless, the Court of Justice long ago established the principle of applying the rules on competition to such entities and has often had recourse to those rules in order to deal with certain practices engaged in by them. In such cases, consumer interests have been taken fully into account while the rights of authors and of other holders of related rights have been observed.

In the Green Paper, the Commission stated that the specific characteristics of multimedia and the exploitation of works on digital networks set up as part of the information society would necessitate rationalization of the management of the works and services disseminated via those media. In this connection, it has noted a number of mergers in certain Member States aimed at centralizing management systems. It has stated that it is in favour of such operations where they made the acquisition of rights more efficient. In any case, and this point was confirmed at the hearing held by the Commission on 7 and 8 January 1996 on technical protection systems and rights management, such operations must be undertaken on a voluntary basis. The Commission has stressed that such mergers would have to comply with the competition rules laid down in the EC Treaty.

Lastly, the Commission wishes to stress that management societies' fees are the result of contractual negotiations that reflect market conditions and the interests at stake. It would be quite wrong to assume that such societies were competing unfairly simply because of a difference in fees. The Court of Justice has ruled that, when assessing fees, like must be compared with like and any objective differences between Member States taken into account.