Final report of the Hearing Officer in Case COMP/C2/38.681 — The Cannes Extension Agreement (Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21 )
Date: 2007-11-15
Institutions: European Commission
Subjects: audiovisual industry, competition law, exchange of information, management, music, publisher

15.11.2007

EN

Official Journal of the European Union

C 272/19

Final report of the Hearing Officer in Case COMP/C2/38.681 — The Cannes Extension Agreement

(Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms of
reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21)

(2007/C 272/07)

The draft Decision presented to the Commission under Article 9 of Council Regulation (EC) No 1/2003
concerns the five major music publishers and thirteen collecting societies who entered into the so-called
Cannes Extension Agreement which relates to the management of mechanical rights.

Universal Music BV lodged a complaint to the Commission on 27 February 2003 alleging that certain terms
of the agreement infringed Articles 81 of the EC Treaty. The Cannes Extension Agreement was subsequently
notified to the Commission on 1 July 2003 under Regulation No 17/62. However, the notification proce-
dure was discontinued on 1 May 2004 due to the entry into force of Regulation (EC) No 1/2003.

On 23 January 2006, the Commission sent a Preliminary Assessment to the thirteen mechanical copyright
collecting societies and five major music publishers, parties to the Cannes Extension Agreement. In its Preli-
minary Assessment the Commission identified two clauses of the Cannes Extension Agreement as raising
concerns with regard to their compatibility with Article 81 of the EC Treaty and 53 of the EEA Agreement:
Clause 9(a), which limits the possibility of collecting societies to grant rebates to commercial users, and
clause 7(a)(i), under which collecting societies are barred from engaging into any activities in the music
publishing or record producing markets.

During preliminary discussions, the parties have offered commitments to meet the concerns expressed by
the Commission. A notice pursuant to Article 27(4) of Regulation (EC) No 1/2003 was published in the
Official Journal on 23 May 2006 in order to market-test the commitments. The Notice invited third parties
to submit comments within one month from the date of publication. Subsequently, on 5 July 2006,
Universal International Music BV withdrew its complaint.

In light of the commitments and following the market-test the relevant Commission services considered that
there were no longer grounds for action by the Commission and, without prejudice to Article 9(2) of Regu-
lation (EC) No 1/2003, the proceedings in the present case shall be brought to an end.

No questions or submission have been addressed to me by the parties or third parties. The Parties have
formally declared that they have received sufficient access to the information that they considered necessary
to offer commitments in order to meet the concerns expressed by the Commission. In the light of the
above, the case does not call for any particular comments as regards the right to be heard.

Brussels, 18 September 2006.

Serge DURANDE