Summary of Commission Decision of 16 July 2008 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/C-2/38.698 — CISAC) (notified under document number C(2008) 3435 final) (Text with EEA relevance)
Date: 2008-12-18
Institutions: European Commission
Subjects: Internet, competition law, copyright, intellectual property, restriction on competition, satellite communications, telecommunications equipment

C 323/12

EN

Official Journal of the European Union

18.12.2008

Summary of Commission Decision

of 16 July 2008

relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement

(Case COMP/C-2/38.698 — CISAC)

(notified under document number C(2008) 3435 final)

(Only the Spanish, Czech, Danish, German, Estonian, Greek, English, French, Italian, Latvian, Dutch, Polish,
Slovak and Slovenian texts are authentic)

(Text with EEA relevance)

(2008/C 323/08)

On 16 July 2008, the Commission adopted a decision relating to a proceeding under Article 81 of the EC Treaty. In
accordance with the provisions of Article 30 of Council Regulation (EC) No 1/2003 (1), the Commission herewith
publishes the names of the parties and the main content of the decision, including any penalties imposed, having regard
to the legitimate interest of undertakings in the protection of their business secrets. A non-confidential version of the
decision is available on the Competition Directorate General website at the following address:

http://ec.europa.eu/comm/competition/antitrust/cases/index/by_nr_77.html#i38_698

Cheolta

Teoranta

konsultaciju

(1) The Decision, pursuant to Article 7 of Regulation (EC)
No 1/2003,
is addressed to 24 EEA collecting societies
which are members of CISAC (the International Associa-
tion of Collecting Societies of Authors and Composers).
The addressees are: Ελληνική Εταιρεία Προστασίας της
Πνευματικής Ιδιοκτησίας (ΑΕPΙ — Greece), Autortiesibu un
komunicesanas
agentura/Latvijas Autoru
apvieniba (AKKA/LAA — Latvia), Staatlich genehmigte
Gesellschaft der Autoren, Komponisten und Musikverleger,
reg.Gen.m.b.H (AKM — Austria), Magyar Szerzői Jogvédő
Iroda Egyesület (ARTISJUS — Hungary), Vereniging Buma
(BUMA — Netherlands), Eesti Autorite Ühing (EAÜ —
Estonia), Gesellschaft für musikalische Aufführungs- und
mechanische Vervielfältigungsrechte (GEMA — Germany),
the Irish Music Rights Organisation Limited — Eagras um
Chearta
(IMRO — Ireland),
Komponistrettigheder i Danmark (KODA — Denmark),
Lietuvos
agentūra
autorių teisių gynimo asociacijos
(LATGA-A — Lithuania), Performing Right Society Limited
(PRS — United Kingdom), Ochranný svaz Ochranný svaz
autorský pro práva k dílům hudebním, o.s. (OSA — Czech
Republic), Société Belge des Auteurs, Compositeurs et
Editeurs
Auteurs,
Componisten en Uitgevers (SABAM — Belgium), Société
des Auteurs, Compositeurs et Editeurs de Musique (SACEM
— France), Združenje skladateljev, avtorjev in založnikov
za zaščito avtorskih pravic Slovenije (SAZAS — Slovenia),
Sociedad General de Autores y Editores (SGAE — Spain),
Societa Italiana degli Autori ed Editori
(SIAE — Italy),
Slovenský ochranný Zväz Autorský pre práva k hudobným
dielam (SOZA — Slovakia), Sociedade Portuguesa de
Autores (SPA — Portugal), Samband Tónskalda og Eigenda
(STEF — Iceland), Svenska Tonsättares
Flutningsréttar
Internationella Musikbyrå (STIM — Sweden), Säveltäjäin
Tekijänoikeustoimisto teosto r.y. (TEOSTO — Finland), the
Norwegian Performing Right Society (TONO — Norway),
and Stowarzyszenie Autorów ZAiKS (ZAIKS — Poland) (2).

Scrl/Belgische

Vereniging

van

societies which relate to membership and exclusivity as
well as the concerted practice applied by the collecting
to a strict domestic territorial
societies which leads
segmentation of
It concludes that these
agreements and practices are anti-competitive and run
contrary to Article 81 of
It does not
however foresee any fines.

the EC Treaty.

licensing areas.

(3) The Decision concerns the conditions of management and
licensing, by collecting societies, of authors' public perfor-
mance rights of musical works. Authors (lyricists and
composers) hold the copyright (inter alia the public perfor-
mance rights) on the works they have created. Collecting
societies, of which there is normally one single society per
country, manage copyright on behalf of authors. As a
consequence of the transfer of rights from its members
(authors and other right holders) a collecting society has a
portfolio of works. This portfolio constitutes the own
repertoire of the collecting society.

(4) All

the collecting societies to whom the Decision is
addressed operate under the umbrella of CISAC. CISAC has
agreed a model contract which serves as a non-mandatory
template for reciprocal representation agreements between
CISAC members for the licensing of public performance
rights of musical works. Each collecting society undertakes
to grant its repertoire to all other collecting societies for
exploitation in their respective territories. As a result of
the network created by all the reciprocal representation
agreements, each collecting society has the ability to offer
a global portfolio of musical works to commercial users,
but only for use in its own domestic (i.e. national)
territory.

(2) The Decision identifies specific clauses contained in the
reciprocal representation agreements between collecting

(1) OJ L 1, 4.1.2003, p. 1.
(2) The collecting societies of Bulgaria and Romania are not parties to the
procedure in so far as their respective countries were not part of the
EEA/Community when the procedure started.

(5) The Decision does not challenge the existence of the reci-
procal representation agreements as such, but certain of
their clauses and a concerted practice found to exist
amongst collecting societies.

18.12.2008

EN

Official Journal of the European Union

C 323/13

The membership clause

(6) Until 2004, one clause in the CISAC model contract
provided that neither contracting collecting society could,
without the consent of the other, accept as a member an
author who is either already a member of another
collecting society, or who is a national of the territory
where the other collecting society operates. A number of
representation agreements concluded among
reciprocal
collecting societies still contain such a membership clause.
Such a membership clause restricts the ability of an author
to become a member of the collecting society of their
choice, or to be simultaneously a member of different EEA
for the management of his or her
collecting societies,
rights in different EEA territories. This membership clause
restricts competition between collecting societies on the
market for the provision of services to authors.

The exclusivity clause

(7) According to the exclusivity clause in the CISAC model
contract a collecting society authorises another collecting
society to licence and administer its repertoire, on an
exclusive basis, within the territory of the latter society.
This clause was contained in the CISAC model contract
until 1996 and is still present in the reciprocal representa-
tion agreements of 17 collecting societies. The clause
prevents a collecting society from licensing its own reper-
toire in other territories and from allowing an additional
collecting society to represent the same repertoire within
the territory of the domestic collecting society. As a conse-
quence, collecting societies are reciprocally guaranteed to
have a monopoly in their domestic market for the granting
of licences to commercial users, such as broadcasters and
online content providers. This exclusivity clause therefore
restricts competition between collecting societies on the
market for the provision of public performance rights to
commercial users.

The concerted practice relating to territorial delineation

(8) The Decision also challenges the concerted practice among
all collecting societies relating to strict domestic territorial
delineation. All collecting societies limit, through reciprocal
representation agreements, the right to licence their reper-
toire to the domestic territory of the other contracting
collecting society. This systematic delineation of domestic
territory amounts to a concerted practice because it cannot
be explained by individual market behaviour or the alleged
need for geographic proximity between the licensor and
the commercial user. The Decision takes note of the fact
that a local presence is not required to monitor the use of

the licence for internet, satellite and cable broadcast. As a
consequence, collecting societies have the technical capa-
city to issue multi-territorial licences, however the uniform
and systematic territorial delineation precludes collecting
societies from offering multi-repertoire and multi-terri-
torial
Furthermore,
commercial
the Decision finds that the concerted practice is not objec-
tively necessary to ensure that collecting societies grant
each other reciprocal mandates.

licences

users.

to

(9) The addressees shall bring an end to the membership
clause and to the exclusivity clause immediately, as far as
they have not already done so. They have 120 days of the
date of the notification to bring an end to the concerted
practice.

(10) The Decision will make it easier for an author to select
which collecting society/societies will manage his or her
public performance rights. This is of interest to an author
(irrespective of whether he or she is a local composer or
an artist with an international audience) because efficiency,
quality of service and conditions of membership differ
appreciably between collecting societies.

(11) The Decision also allows collecting societies to licence
their repertoire to more than one other collecting society
per territory. For internet, satellite and cable exploitation,
the Decision improves the opportunities for commercial
to
users (including broadcasters and content providers)
obtain a licence which covers more than one territory. By
opening up the market
to more competition between
collecting societies, the Decision will provide incentives to
collecting societies to improve their efficiency and the
quality of their services, thereby benefitting both authors
and users.

reciprocal

(12) The Decision does not call into question the existence of
representation agreements
the network of
between collecting societies and does not force or oblige a
collecting society to withdraw from its reciprocal represen-
tation agreements, nor does the Decision facilitate a race to
the bottom in authors' royalty payments. Collecting socie-
ties remain at liberty to continue the current system of
fixing royalties or to otherwise introduce other models
which protect
royalty payments. The Decision will
however encourage competition on the level of administra-
tion fees charged to the authors, through effecting effi-
ciency gains, which will decrease administration fees and
thereby increase the revenues of authors.

(13) The Advisory Committee on Restrictive Practices and
Dominant Positions issued a favourable opinion on 17 June
2008.