Case T-401/08: Action brought on 24 September 2008 — Säveltäjäin Tekijänoikeustoimisto Teosto v Commission
Date: 2008-09-24
Institutions: Court of First Instance
Subjects: European Community, Finland, action for annulment (EU), art trade, copyright, intellectual property, music, restriction on competition

C 313/38

EN

Official Journal of the European Union

6.12.2008

Action brought on 24 September 2008 — Säveltäjäin
Tekijänoikeustoimisto Teosto v Commission

(Case T-401/08)

(2008/C 313/69)

Language of the case: Finnish

Parties

Applicant: Säveltäjäin Tekijänoikeustoimisto Teosto (Helsinki,
Finland) (represented by: H. Pokela, lawyer)

Defendant: Commission of the European Communities

Form of order sought

— annul Decision C(2008) 3435 final of the Commission of
16 July 2008 in Case COMP/C2/38.698-CISAC in its
entirety, and

— order the Commission to pay Teoston's costs.

Pleas in law and main arguments

The applicant seeks the annulment of Commission Decision
C(2008) 3435 final (Case COMP/C2/38.698 CISAC) of 16 July
2008, according to which the undertakings mentioned therein
have infringed Article 81 of the EC Treaty and Article 53 of the
reciprocal agreements
EEA Agreement by using in their
membership restrictions contained in the International Confed-
eration of Societies of Authors and Composers model contract
(‘the CISAC model contract’) or by applying those membership
restrictions in practice.

The Commission did not state sufficient reasons for its decision.
In its decision, the Commission did not analyse the points of
departure and the particular features of the various authors'
associations which differed from one another. The Commission
incorrectly considered that the reasons for this situation are
restrictions on competition when it is a result of natural market
development. Teostso has described to the Commission the
nature of its business environment and the special circumstances
relating to the music market in Finland, but the Commission
made no mention of
in its decision. Since the
Commission did not take account of the rationale for the way
in which Teosto operated in the prevailing circumstances, Teosto
considers that the grounds for the decision are not clear from
the Commission's reasoning.

them at all

that

authors'

The Commission states
associations whose
membership conditions infringe Article 81(1) have done so
either by including conditions in the agreement which are
considered by the Commission to be prohibited or by conti-
nuing to apply such conditions despite the fact that they have
been removed from the contracts. The Commission failed to

specify by which of those two methods it considers that Teosto
infringed Article 81(1). Further the decision does not indicate
the grounds on which the Commission considered that Teosto
had actually applied the membership conditions. There is an
error of law in the decision because the Commission should be
able to state more precisely what kind of
infringements it
considers the addressee of the decision to have committed and
on what grounds.

The Commission's reasoning is contradictory as regards to the
alleged coordination of regional restrictions.

The Commission has incorrectly applied Article 81 EC. Teosto
has not infringed Article 81(1) by applying the membership
conditions similar to those in Article 11(II) of the CISAC model
contract, as the Commission claims. Teosta has not applied
membership conditions considered to be prohibited by the
Commission. The object of the membership conditions was not
to restrict competition nor have they had such an effect.

Teosto has not infringed Article 81(1) by coordinating regional
restrictions on licensing rights as the Commission claims. The
regional restrictions were not the result of coordination. The
object of the regional limits was not to restrict competition nor
did they have such an effect. Restricting a mandate to a particu-
lar area, even if the national territory of a party to the agree-
ment, is not prohibited. Such a practice has been permitted and,
in Teosto's view, is the most logical solution, based on normal
market conditions.

Teosto has not infringed Article 81(1) by applying exclusivity
clauses similar to those in 1(I) and (II) of the CISAC's model
contract. The exclusivity clause is competition neutral as its
object was not to restrict competition nor did it have such an
effect. Teosto did not apply an exclusivity clause; the extension
of the regional scope of its own operations and the mandates
granted to the parties to the contract have been dictated by the
reasons of normal market logic.

If Teosto were to be considered to have infringed the prohibition
in Article 81(1) in some way, the practice would however be
authorised on the basis of Article 81(3). The present system and
in particular that contained in the mandates' regional
limits
produce significant advantages in terms of efficiency, which
benefit consumers without eliminating competition and without
going further than necessary in order to achieve efficiency
advantages.

The Commission has exceeded the limits of its competence by
requiring the authors' associations to renegotiate the contracts.
The Commission cannot order effective measures to change a
practice which is not contrary to Article 81.