Notice published pursuant to Article 27(4) of Council Regulation (EC) No 1/2003 in Cases COMP/C2/39152 — BUMA and COMP/C2/39151 SABAM (Santiago Agreement — COMP/C2/38126) Text with EEA relevance
Date: 2005-08-17
Institutions: European Commission
Subjects: Internet, bilateral agreement, competition law, copyright, exchange of information, management, music, trade licence

17.8.2005

EN

Official Journal of the European Union

C 200/11

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

(2005/C 200/05)

(Text with EEA relevance)

1. INTRODUCTION

Vervielfältigungsrechte

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

(hereinafter

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

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

this means

(7) In addition,

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

(3) The Santiago Agreements (i.e.

the bilateral

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

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

2. PRELIMINARY ASSESSMENT

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

3. COMMITMENTS

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

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

(2) OJ C 145/2 of 17 May 2001.
(3) IP/04/586 of 3 May 2004.

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

C 200/12

EN

Official Journal of the European Union

17.8.2005

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

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

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

4. INVITATION TO MAKE COMMENTS

(13) The Commission intends, subject to market testing, to
adopt a decision under Article 9(1) of Regulation (EC) No
1/2003 declaring the commitments summarised above
and published on the Internet on the website of the Direc-
torate-General for Competition to be binding. To this end,

pursuant to Article 27(4) of Regulation (EC) No 1/2003, it
invites interested third parties to submit their comments
to it within one month of the publication of this notice.

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

(15) Comments should be sent

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

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