Notice published pursuant to Article 27(4) of Council Regulation No 1/2003 in Case COMP/38698 — CISAC   (Text with EEA relevance)
Date: 2007-06-09
Institutions: European Commission
Subjects: broadcasting, competition law, copyright, exchange of information, mass media, music

C 128/12

EN

Official Journal of the European Union

9.6.2007

V

(Announcements)

PROCEDURES RELATING TO THE IMPLEMENTATION OF THE COMPETITION
POLICY

COMMISSION

Notice published pursuant to Article 27(4) of Council Regulation No 1/2003 in Case COMP/38698
— CISAC

(Text with EEA relevance)

(2007/C 128/06)

1. INTRODUCTION

1. According to Article 9 of Council Regulation (EC) 1/2003 (1), the Commission may decide — in cases
where it intends to adopt a decision requiring that an infringement is brought to an end and the parties
concerned offer commitments to meet the concerns expressed to them by the Commission in its preli-
minary assessment — to make those commitments binding on the undertakings. Such a decision may
be adopted for a specified period and shall conclude that there are no longer grounds for action by the
Commission. According to Article 27(4) of the same Regulation, the Commission shall publish a
concise summary of the case and the main content of the commitments. Interested parties may submit
their observations within the time limit fixed by the Commission.

2. SUMMARY OF THE CASE

2. On 4 April 2003, Music Choice Europe plc (‘Music Choice’) filed a complaint against the International
Confederation of Societies of Authors and Composers (‘CISAC’). The complaint concerns a model
contract for public performance rights between collecting societies that are members of CISAC. Earlier,
on 30 November 2000, the RTL Group (‘RTL’) had filed a complaint against GEMA, the German
collecting society which administers authors' rights in musical and cinematographic works on behalf of
its members and third parties. RTL's complaint concerns the refusal of GEMA to grant a Community-
wide licence to the RTL Group for all its music broadcasting activities. The cases, similar on substance,
have been merged under the ‘CISAC’ case.

3. CISAC is the international association of authors' collecting societies. It proposes a standard model
contract for the reciprocal representation between its members concerning the management of public
performance rights. The other parties to the case are the following EEA collecting societies: AEPI
(Greece), AKKA-LAA (Latvia), AKM (Austria), ARTISJUS (Hungary), BUMA (Netherlands), EAU (Estonia),
GEMA (Germany), IMRO (Ireland), KODA (Denmark), LATGA (Lithuania), PRS (United Kingdom), OSA
(Czech Republic), SABAM (Belgium), SACEM (France), SAZAS (Slovenia), SGAE (Spain), SIAE (Italy),
SOZA (Slovakia), SPA (Portugal), STEF (Iceland), STIM (Sweden), TEOSTO (Finland), TONO (Norway),
and ZAIKS (Poland).

(1) Council Regulation (EC) No 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down

in Articles 81 and 82 of the Treaty (OJ L 1, 4.1.2003, p. 1-25).

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4. On 31 January 2006 the Commission sent a Statement of Objections based on Article 81 of the EC
Treaty and Article 53 of the EEA Agreement to CISAC and the EEA collecting societies and provided
access to the Commission's file. The statement of objections is deemed to constitute the preliminary
assessment within the meaning of Article 9(1) of Regulation (EC) No 1/2003.

5.

Pursuant to the preliminary assessment, two categories of clauses in the CISAC model contract and the
reciprocal representation contracts between collecting societies raise concern as to their compatibility
with Article 81 of the EC treaty and 53 of the EEA Agreement. These are the ‘membership clause’ and
the ‘territoriality clauses’ :

1) The ‘membership clause’: While the reciprocal representation contract is in force neither of the
contracting collecting societies may, without the consent of the other, accept as member any
member of the other society or any natural person, firm or company having the nationality of one
of the countries in which the other collecting society operates.

2) The ‘territoriality clauses’: commercial users can only obtain a licence from the local collecting
society. This effect is the result of two different clauses. First, the reciprocal representation is done
on an exclusive basis for the respective territory of collecting societies (hereafter,
‘the exclusivity
clause’). Second, and in any event, the granted licence is limited to the domestic territory of the
collecting society, even for the internet, cable retransmission and, with certain exceptions, satellite
transmission (hereafter, ‘the territorial delineation’).

6. The addressees of the Statement of Objections expressed their views in their written replies and during
an oral Hearing which took place on 14, 15 and 16 June 2006. Subsequently, CISAC and a substantial
number of collecting societies offered the commitments which are the subject to the present notice.

3. THE MAIN CONTENT OF THE OFFERED COMMITMENTS

7. A majority of the parties did not agree with the Commission's preliminary assessment. They have never-
theless offered to abide by a set of commitments which are designed to remedy the Commission's
concerns. The commitments, which concern performing rights, are offered by CISAC and the following
collecting societies: AEPI, AKM, ARTISJUS, BUMA, GEMA, IMRO, LATGA-A, PRS, SABAM, SACEM,
SGAE, SIAE, SPA, SOZA, STEF, STIM, TEOSTO and TONO (the ‘signatory societies’).

8. The commitments are briefly summarised below and published in full in English on the website of the

Directorate-General for competition, at:

http://ec.europa.eu/comm/competition/index_en.html

9. Concerning the ‘membership clauses’, CISAC offers not to recommend in relation to the reciprocal
representation between EEA societies, and the signatory societies offer to remove from representation
agreements with another EEA collecting society, clauses identical, similar or having the same effect as
the clause on which the Commission expressed concerns within 30 days of the date in which CISAC
and the signatory societies are notified of the European Commission's decision under Article 9(1) of
Council Regulation (EC) No 1/2003.

10. Concerning the ‘territoriality clauses’, CISAC offers not to recommend the granting of exclusive rights
between EEA societies and the signatory societies offer to remove, from the representation agreements
with another EEA collecting society any clause identical similar or having the same effect as the exclu-
sivity clause at latest 30 days after the date on which CISAC and the signatory societies are notified of
the European Commission's decision under Article 9(1) of Council Regulation (EC) No 1/2003.

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11. In addition, with regard to the territorial delineation, signatory societies undertake (1) to license their
own performing rights repertoire to internet services, satellite services and/or cable services directly
across the EEA or (2) to mandate, under certain conditions, each signatory society which fulfils certain
qualitative criteria to grant multi repertoire multi territorial performing right licences for internet
services, satellite services and cable retransmission services. Concerning internet, the proposed commit-
ments cover all cross border internet websites accessible within the EEA. Concerning satellite transmis-
sion, collecting societies located within the area of up link of the broadcast or in which the broadcaster
economically targets end-consumers will have the possibility to grant a licence covering the relevant
licensing area to the broadcaster which exploits a channel on a multi territorial basis. For cable retrans-
mission services of a satellite broadcast, not only the collecting society in the Member State where the
cable operator is located but also the collecting society which grants the licence to the broadcaster will
have the possibility to grant a licence for cable retransmissions. This does not apply when a collecting
society offers a global licence for cable retransmissions for all transmitted channels at a tariff which is
independent of the number of retransmitted channels or when a cable operator has a statutory obliga-
tion to re-invoice the royalty fee in respect of the cable retransmission licence to the end-consumer.
Notwithstanding the above, the commitments do not preclude the signatory societies from excluding
internet services, satellite services and/or cable services from the network of reciprocal representation
contracts. Each signatory society shall implement the commitments at the latest six months, in relation
to internet service, and nine months, in relation to satellite and cable retransmission services, after the
adoption of the European Commission's decision under Article 9(1) of Council Regulation (EC) No
1/2003.

12. All signatory societies which fulfil certain qualitative criteria will have the possibility to issue the multi
repertoire multi territorial licences described above. The qualitative criteria are listed in an exhaustive
way in the proposed commitments and relate in particular to tariffs, deductions, administrative infra-
structure, technical capacities, transparency and rules of distribution.

4. INVITATION TO MAKE COMMENTS

13. The Commission intends, subject to market testing, to adopt a decision under Article 9(1) of Regulation
(EC) 1/2003 declaring the commitments summarised above and published on the Internet, on the
website of the Directorate General for Competition, to be binding.

14. In accordance with Article 27(4) of Regulation 1/2003, the Commission invites interested third parties
to submit their observations on the proposed commitments. These observations must reach the
Commission not later than one month following the date of this publication. Interested third parties are
also asked to submit a non-confidential version of their comments, in which commercial 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)’. Legitimate requests will be respected.

15. Observations can be sent to the Commission, under reference number COMP/38698 — CISAC, either
by e-mail (COMP-GREFFE-ANTITRUST@ec.europa.eu), by fax ((32-2) 295 01 28) or by post to the
following address:

European Commission
Directorate-General for Competition
Antitrust Registry
B-1049 Brussels