Commission Recommendation of 18 May 2005 on collective cross-border management of copyright and related rights for legitimate online music services   (Text with EEA relevance)
Date: 2005-05-18
Institutions: European Commission
Subjects: copyright, downloading, information society, information system, music, provision of services

L 276/54

EN

Official Journal of the European Union

21.10.2005

II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION RECOMMENDATION

of 18 May 2005

on collective cross-border management of copyright and related rights for legitimate online music
services

(Text with EEA relevance)

(2005/737/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community, and in particular Article 211 thereof,

establishing the European

Whereas:

the process of online distribution of a musical work.
Other categories of rights are the right of communication
to the public of musical works, the right to equitable
remuneration for the communication to the public of
other subject matter and the exclusive right of making
available a musical work or other subject matter.

(1)

(2)

(3)

(4)

In April 2004 the Commission adopted a Communi-
cation on the Management of Copyright and Related
Rights in the Internal Market.

The European Parliament,
in its report of 15 January
2004 (1), stated that right-holders should be able to
enjoy copyright and related rights protection wherever
independent of national
such rights are established,
borders or modes of use during the whole term of
their validity.

The European Parliament further emphasised that any
action by the Community in respect of the collective
and related
cross-border management of
rights
artists,
should strengthen the
including writers and musicians, that the pan-European
financially
creative works will
of
use
rewarded (2).

copyright
confidence of

their

be

New technologies have led to the emergence of a new
generation of commercial users that make use of musical
works and other subject matter online. The provision of
legitimate online music services requires management of
a series of copyright and related rights.

(5)

One category of those rights is the exclusive right of
reproduction which covers all reproductions made in

(6)

(7)

(8)

to Directive 2001/29/EC of

Pursuant
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 (3) and Council Directive
92/100/EEC of 19 November 1992 on rental right and
lending right and on certain rights related to copyright in
the field of intellectual property (4), a licence is required
the rights in the online exploitation of
for each of
rights may be managed by
musical works. These
collective
certain
management services to right-holders as agents or by
individual right-holders themselves.

rights managers

provide

that

Licensing of online rights is often restricted by territory,
and commercial users negotiate in each Member State
with each of the respective collective rights managers
for each right that is included in the online exploitation.

In the era of online exploitation of musical works,
however, commercial users need a licensing policy that
corresponds to the ubiquity of the online environment
and which is multi-territorial. It is therefore appropriate
to provide for multi-territorial
to
enhance greater legal certainty to commercial users in
relation to their activity and to foster the development
the
legitimate online services,
of
revenue stream for right-holders.

licensing in order

increasing,

in turn,

(1) A5-0478/2003.
(2) See recital 29.

(3) OJ L 167, 22.6.2001, p. 10.
(4) OJ L 346, 27.11.1992, p. 61. Directive as amended by Directive

2001/29/EC.

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Official Journal of the European Union

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(9)

(10)

(11)

(12)

services
Freedom to provide collective management
across national borders entails that
right-holders are
able to freely choose the collective rights manager for
the management of
the rights necessary to operate
legitimate online music services across the Community.
That right implies the possibility to entrust or transfer all
or a part of the online rights to another collective rights
manager irrespective of the Member State of residence or
the nationality of either the collective rights manager or
the rights-holder.

for

effective

Fostering
cross-border
structures
management of rights should also ensure that collective
rights managers achieve a higher level of rationalisation
and transparency, with regard to compliance with
competition rules,
the
light of
especially
requirements arising out of the digital environment.

in the

based

on contract

The relationship between right-holders and collective
rights managers, whether
or
statutory membership rules, should include a minimum
protection for right-holders with respect to all categories
of rights that are necessary for the provision of legitimate
online music services. There should be no difference in
treatment of right-holders by rights managers on the
basis of the Member State of residence or nationality.

Royalties collected on behalf of right-holders should be
distributed equitably and without discrimination on the
grounds of residence, nationality, or category of right-
In particular, royalties collected on behalf of
holder.
right-holders in Member States other
than those in
which the right-holders are resident or of which they
are nationals should be distributed as effectively and effi-
ciently as possible.

(13) Additional

recommendations on accountability,

right-
holder representation in the decision-making bodies of
collective rights managers and dispute resolution should
ensure that collective rights managers achieve a higher
level of rationalisation and transparency and that right-
informed
holders and commercial users
choices. There should be no difference in treatment on
the basis of category of membership in the collective
rights management society: all right-holders, be they
authors,
producers,
publishers,
performers or others, should be treated equally.

composers,

can make

record

(14)

It is appropriate to continuously assess the development
of the online music market,

(a)

‘management of copyright and related rights for the
at
legitimate online music
provision of
level’ means
Community
the
following services: the grant of licences to commercial
users, the auditing and monitoring of rights, the enfor-
cement of copyright and related rights, the collection of
royalties and the distribution of royalties to right-
holders;

the provision of

services

(b) ‘musical works’ means any musical work or other

protected subject matter;

(c)

‘repertoire’ means the catalogue of musical works which
is administered by a collective rights manager;

(d)

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

(e)

‘collective rights manager’ means any person providing
the services set out in point (a) to several right-holders;

(f)

‘online rights’ means any of the following rights:

(i)

(ii)

provided

the exclusive right of reproduction that covers all
under Directive
reproductions
for
2001/29/EC in the form of
intangible copies,
made in the process of online distribution of
musical works;

the right of communication to the public of a
musical work, either in the form of a right to
authorise or prohibit pursuant
to Directive
2001/29/EC or a right to equitable remuneration
in accordance with Directive 92/100/EEC, which
includes webcasting,
radio and simul-
casting or near-on-demand services received either
on a personal computer or on a mobile telephone;

internet

(iii) the exclusive right of making available a musical
to Directive 2001/29/EC, which

work pursuant
includes on-demand or other interactive services;

(g)

‘right-holder’ means any natural or legal person that
holds online rights;

(h) ‘commercial user’ means any person involved in the
provision of online music services who needs a
licence from right-holders in order to provide legitimate
online music services;

HEREBY RECOMMENDS:

Definitions

(i)

1. For the purposes of this Recommendation the following

definitions are applied:

representation

agreement’ means

‘reciprocal
any
bilateral agreement between collective rights managers
whereby one collective rights manager grants to the
other
repertoire in the
the right
territory of the other.

to represent

its

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Official Journal of the European Union

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General

2. Member States are invited to take the steps necessary to
facilitate the growth of legitimate online services in the
Community by promoting a
regulatory environment
which is best suited to the management, at Community
level, of copyright and related rights for the provision of
legitimate online music services.

The relationship between right-holders, collective rights managers
and commercial users

3. Right-holders

the

right

to entrust

should have

the
management of any of
the online rights necessary to
operate legitimate online music services, on a territorial
scope of their choice, to a collective rights manager of
their choice, irrespective of the Member State of residence
or the nationality of either the collective rights manager or
the right-holder.

4. Collective

rights managers

should apply the utmost

diligence in representing the interests of right-holders.

5. With respect to the licensing of online rights the rela-
rights
statutory
least be governed by the

tionship between right-holders
managers, whether based on contract or
membership rules, should, at
following:

collective

and

(a) right-holders should be able to determine the online
rights to be entrusted for collective management;

6. Collective rights managers should inform right-holders and
commercial users of
the repertoire they represent, any
existing reciprocal representation agreements, the territorial
scope of
repertoire and the
for
applicable tariffs.

their mandates

that

7. Collective rights managers should give reasonable notice to
in the

each other and commercial users of changes
repertoire they represent.

8. Commercial users should inform collective right managers
of the different features of the services for which they want
to acquire online rights.

9. Collective rights managers should grant commercial users
licences on the basis of objective criteria and without any
discrimination among users.

Equitable distribution and deductions

10. Collective rights managers should distribute royalties to all
right-holders or category of right-holders they represent in
an equitable manner.

for

11. Contracts and statutory membership rules governing the
relationship between collective rights managers and right-
holders
the management, at Community level, of
musical works for online use should specify whether and
to what extent, there will be deductions from the royalties
to be distributed for purposes other
the
management services provided.

than for

(b) right-holders should be able to determine the territorial
scope of the mandate of the collective rights managers;

12. Upon payment of the royalties collective rights managers
should specify vis-à-vis all the right-holders they represent,
the deductions made for purposes other than for the
management services provided.

(c) right-holders should, upon reasonable notice of their
intention to do so, have the right to withdraw any of
territorial
the online rights and transfer
those rights
management of
to another collective
rights manager,
irrespective of the Member State of
residence or the nationality of either the collective
rights manager or the right-holder;

the multi

Non-discrimination and representation

13. The relationship between collective rights managers and
right-holders, whether based on contract or
statutory
membership rules should be based on the following prin-
ciples:

(d) where a right-holder has transferred the management of
an online right to another collective rights manager,
without prejudice
cooperation
among rights managers, all collective rights managers
concerned should ensure that those online rights are
withdrawn from any existing reciprocal representation
agreement concluded amongst them.

forms of

to other

(a) any category of

right-holder

relation to all elements of
provided;

is

treated equally in
the management service

(b) the representation of

right-holders

in the internal

decision making process is fair and balanced.

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Accountability

14. Collective rights managers should report regularly to all
right-holders they represent, whether directly or under reci-
procal representation agreements, on any licences granted,
applicable tariffs and royalties collected and distributed.

Dispute settlement

15. Member States are invited to provide for effective dispute
resolution mechanisms, in particular in relation to tariffs,
licensing conditions, entrustment of online rights
for
management and withdrawal of online rights.

Follow-up

16. Member States and collective rights managers are invited to
to the Commission on the
report, on a yearly basis,
measures they have taken in relation to this Recommen-
dation and on the management, at Community level, of
copyright and related rights for the provision of legitimate
online music services.

17. The Commission intends to assess, on a continuous basis,
the development of the online music sector and in the light
of this Recommendation.

18. The Commission will

the
assessment referred to in point 17, the need for further
action at Community level.

to consider, on the basis of

Addressees

19. This Recommendation is addressed to the Member States
and to all economic operators which are involved in the
management of copyright and related rights within the
Community.

Done at Brussels, 18 May 2005.

For the Commission

Charlie McCREEVY
Member of the Commission