Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market
Date: 2012-07-11
Institutions: European Commission
Subjects: administrative transparency, copyright, financial management, governance, holding company, innovation, intellectual property, music, principle of proportionality, principle of subsidiarity, trade licence

EUROPEAN COMMISSION 

Brussels, 11.7.2012  
COM(2012) 372 final 

2012/0180 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on collective management of copyright and related rights and multi-territorial licensing 
of rights in musical works for online uses in the internal market 

(Text with EEA relevance) 

{SWD(2012) 204 final} 
{SWD(2012) 205 final} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

1.1. 

Grounds for and objectives of the proposal 

The present proposal for a directive aims to put in place an appropriate legal framework for 
the collective management of rights that are administered by collecting societies on behalf of 
rightholders by providing for rules ensuring the better governance and greater transparency of 
all collecting societies and also by encouraging and facilitating the multi-territorial licensing 
of the rights of authors in their musical works by collecting societies representing authors. 

A  licence  is  required  from  the  relevant  holder  of  any  copyright  or  related  right  where  any 
service is provided which includes the exploitation of the protected work of an author e.g. a 
song  or  musical  composition  or  other  protected  subject  matter,  such  as  a  phonogram  or 
performance. Such services may be provided offline, such as showing a film in a cinema or 
playing music in a concert hall, but also increasingly online. A licence is required from all the 
different  rightholders  (authors,  performers,  producers).  In  some  sectors,  licences  are  most 
often  granted  directly  by  individual  rightholders  (e.g.  film  producers),  in  other  sectors,  the 
collective management of rights plays a very important role, in particular of authors' rights in 
musical works. Certain forms of exploitation also rely particularly on collective management 
e.g. the performers and record producers' remuneration rights for the broadcasting and public 
performance of phonograms.  

Rightholders entrust their rights to a collecting society which manages rights on their behalf. 
They also provide services to rightholders and users which include granting licences to users, 
administering  the  rights  revenue,  payments  due  to  rightholders  and  enforcing  the  rights. 
Collecting  societies  play  a  very  important  role,  in  particular  where  negotiations  with 
individual  creators  would  be  impractical  and  entail  prohibitive  transaction  costs.  They  also 
play  a  key  role  in  the  protection  and  promotion  of  the  diversity  of  cultural  expressions  by 
enabling the smallest and less popular repertoires to access the market. 

Action is considered necessary in two areas.  

First,  collective  rights'  management  in  all  sectors  needs  to  adapt  in  terms  of  the  service 
provided  to  members  and  users  as  regards  efficiency,  accuracy,  transparency  and 
accountability.  An  excessively  slow  pace  of  modernisation  negatively  impacts  on  the 
availability  of  new  offerings  for  consumers  and  service  providers,  as  innovative  services 
especially in the online environment are being hampered. To ensure the adequate provision of 
services using works or other subject-matter protected by copyright and related rights in the 
internal market, collecting societies should be led to adapt their methods of operation for the 
benefit of creators, service providers, consumers and of the European economy as a whole. As 
societies license rights on behalf of national and foreign rightholders, their functioning has a 
fundamental  impact  on  the  exploitation  of  those  rights  across  the  internal  market.  The 
functioning of some of them has raised concerns as to their transparency, governance and the 
handling of rights revenue collected on  behalf of rightholders. Notably, concerns have been 
expressed  with  regard  to  the  accountability  of  certain  societies  to  their  members  in  general, 
and to the management of their finances in particular.  A number of collecting societies still 
have to meet the challenge of adapting to the realities and needs of the Single Market.  

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Second,  the  development  of  a  Single  Market  for  cultural  content  online  has  led  to  calls  for 
changes  to  copyright  licensing,  notably  in  the  licensing  of  the  rights  of  authors  in  musical 
works  as  online  music  service  providers  face  difficulties  in  acquiring  licences  with  an 
aggregated  repertoire  for  the  territory  of  more  than  one  Member  State.  While  a  number  of 
factors  contribute  to  the  territorial  fragmentation  of  online  music  services,  including  the 
commercial choices of providers, the difficulties of obtaining multi-territorial licences should 
not  be  underestimated.  This  situation  leads  to  fragmentation  of  the  EU  market  for  these 
services, thereby limiting the provision of online music services by online service providers 
and  as  a  result  authors'  musical  works  have  not  been  as  widely  licensed  or  properly 
remunerated,  as  they  could  have  been.  This  fragmentation  also  prevents  consumers  from 
enjoying  the  widest  possible  access  to  the  considerable  diversity  of  musical  repertoires. 
Whilst in other areas collective rights management has not given rise to any difficulties that 
need to be addressed in this context, the collective management of authors' rights in musical 
works needs to be addressed. Tackling this situation is crucial to stimulate the legal offer of 
music online in the EU.  

This proposal therefore aims to: (a) improve the standards of governance and transparency of 
collecting  societies  so  that  rightholders  can  exercise  more  effective  control  over  them  and 
help improve their management efficiency, and (b) facilitate the multi-territorial licensing by 
collecting societies of authors' rights in musical works for the provision of online services. 

1.2. 

General context 

This proposal is presented in the context of the Digital Agenda for Europe1 and the Europe 
2020 Strategy aiming for smart, sustainable and inclusive growth2. In its "Single Market Act"3 
the Commission identified intellectual property as one of the areas in which action is required 
and  underlined  that,  in  the  internet  age,  collective  management  must  be  able  to  evolve 
towards more transnational, possibly EU-wide models of licensing, covering the territories of 
multiple  Member  States.  In  its  Communication  "A  Single  Market  for  Intellectual  Property 
Rights"4  the  Commission  announced  that  it  would  be  proposing  a  legal  framework  for  the 
collective  management  of  copyright  and  related  rights.  The  importance  of  this  legislative 
proposal was also highlighted in the Commission's "European Consumer Agenda".5 

Article 167 of the TFEU requires the Union to take cultural aspects into account in its action, 
in particular to respect and promote the diversity of its cultures.  

Technology, the fast evolving nature of digital business models and the growing autonomy of 
online consumers, all call for a constant assessment as to whether current copyright rules set 
the right incentives and enable rightholders, users of rights and consumers to take advantage 
of  the  opportunities  that  modern  technologies  provide.  This  proposal  should  not  be  seen  in 
isolation but as part of a set of measures proposed or to be proposed by the Commission, as 
appropriate,  in  order  to  facilitate  the  licensing  of  rights  and,  more  generally,  access  to 
attractive  digital  content,  in  particular  in  a  cross-border  context.  Besides  addressing  the 
functioning  of  collecting  societies  in  the  context  of  this  proposal,  the  Commission  is  also 
considering if other measures are required to facilitate licensing in general whether done by 

1 
2 
3 
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5 

COM(2010)245. 
COM(2010)2020.  
COM(2011)206.  
COM(2011)287.  
COM(2012)225. 

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individual  rightholders,  those  to  which  the  rights  have  been  transferred,  or  by  collecting 
societies. This reflection encompasses the issue of the territoriality of rights and its effects in 
the licensing of certain content or services. 

Also in the context of the Digital Agenda for Europe, the Commission Communications “A 
Single Market for Intellectual Property Rights” and "A coherent framework for building trust 
in  the  Digital  Single  Market  for  e-commerce  and  online  services"6  and  the  follow-up  to  the 
"Green  Paper  on  the  online  distribution  of  audiovisual  works  in  the  European  Union"7,  the 
Commission  is  carrying  out  in-depth  legal  and  economic  analysis  as  regards  the  scope  and 
functioning of copyright and related rights associated with internet transmissions in the Single 
Market, including whether the current exceptions and limitations to copyright granted under 
the  Directive  2001/29/EC  on  the  harmonisation  of  certain  aspects  of  copyright  and  related 
rights in the information society8 need to be updated or further harmonised at EU level. 

1.3. 

Existing provisions in the area of the proposal 

While  some  of  the  existing  directives  in  the  field  of  copyright9  contain  references  to  the 
management of rights by collecting societies, none of them addresses the modus operandi of 
the societies as such. 

Commission  Recommendation  2005/737/EC  on  the  collective  cross-border  management  of 
copyright  and  related  rights  for  legitimate  online  music  services10  invited  Member  States  to 
promote  a  regulatory  environment  suited  to  the  management  of  copyright  and  related  rights 
for  the  provision  of  legitimate  online  music  services  and  to  improve  the  governance  and 
transparency standards of collecting societies. Being a Recommendation, it was non-binding 
and its voluntary implementation has been unsatisfactory.  

1.4. 

Consistency with other policies 

This proposal complements Directive 2006/123/EC of 12 December 2006 on services in the 
internal  market11  which  aims  to  create  a  legal  framework  to  ensure  the  freedom  of 

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10 
11 

COM(2011)942. 
See Green Paper on the online distribution of audiovisual works in the European Union: opportunities 
and challenges towards a digital single market. COM(2011)427. 
OJ L 167, 22.6.2001, p. 10. 
Directive  2001/29/EC  of  the  European  Parliament  and  of  the  Council  of  22  May  2001  on  the 
harmonisation of certain aspects of copyright and related rights in the information society (OJ L 167, 
22.6.2001),  Directive  2006/115/EC  of  the  European  Parliament  and  of  the  Council  of  12  December 
2006  on  rental  right  and  lending  right  and  on  certain  rights  related  to  copyright  in  the  field  of 
intellectual property (OJ L 376, 27.12.2006), Directive 2001/84/EC of the European Parliament and of 
the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of 
art (OJ L 272, 13.10.2001), Council Directive 93/83/EEC of 27 September 1993 on the coordination of 
certain  rules  concerning  copyright  and  rights  related  to  copyright  applicable  to  satellite  broadcasting 
and cable retransmission (OJ L 248, 6.10.1993), Directive 2009/24/EC of the European Parliament and 
of the Council of 23 April 2009 on the legal protection of computer programs (codified version) (OJ L 
111, 5.5.2009), Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on 
the  legal  protection  of  databases  (OJ  L  77,  27.3.1996),  Directive  2006/116/EC  of  the  European 
Parliament and of the Council of 12 December 2006 on the term of protection of copyright and certain 
related  rights  (codified  version)  (OJ  L  372,  27.12.2006),  Directive  2011/77/EU  of  the  European 
Parliament and of the Council of 27 September 2011 amending Directive 2006/116/EC on the term of 
protection of copyright and certain related rights OJ L 265, 11.10.2011). 
OJ L 276, 21.10.2005. 
OJ L 376, 27.12.2006. 

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establishment  and  the  free  movement  of  services  between  the  Member  States.  Collecting 
societies  are  subject  to  Directive  2006/123/EC  as  providers  of  collective  management 
services. 

The  proposal  is  important  for  the  protection  of  copyright  and  related  rights.  The  Berne 
Convention for the Protection of Literary and Artistic Works, the Rome Convention for the 
Protection  of  Performers,  Producers  of  Phonograms  and  Broadcasting  Organizations,  the 
World  Trade  Organisation  Agreement  on  Trade-Related  Aspects  of  Intellectual  Property 
Rights,  the  World  Intellectual  Property  Organisation  Copyright  Treaty  and  the  World 
Intellectual Property Organisation Performances and Phonograms Treaty are key international 
instruments  in  this  respect.  The  United  Nations  Educational  Scientific  and  Cultural 
Organisation  Convention  on  the  protection  and  promotion  of  cultural  expressions  which 
expands  the  obligation  of  the  European  Union  at  international  level,  also  recalls  the 
importance of intellectual property. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENT 

2.1 

Public consultation 

The  proposal  builds  on  an  extensive  round  of  dialogue  and  consultation  with  interested 
parties, including authors, publishers, performers, producers, collecting societies, commercial 
users, consumers and public bodies.  

It takes into consideration the views expressed in a public consultation on "Content Online",12 
which aimed to promote further thinking and debate about possible European responses to the 
challenges  of  the  digital  "dematerialisation"  of  content,  including  easier  and  quicker  rights 
clearance  structures  while  ensuring  fair  and  adequate  remuneration  for  rightholders.  The 
consultation  specifically  addressed  the  governance  and  transparency  of  collecting  societies 
and the cross-border management of rights for online music services. Several respondents felt 
that aggregating different music repertoires would simplify rights clearance and licensing. A 
number of authors' associations, publishers and commercial users favoured further reflection 
on the governance and transparency of collecting societies. Consumers' associations generally 
supported a regulatory initiative (e.g. by means of a binding legislative instrument). 

In 2010 the Commission consulted collecting societies and online music service providers. It 
also  organised  a  public  hearing13  on  the  governance  of  collective  rights  management  in  the 
EU,  attended  by  almost  300  stakeholders.  These  consultations  confirmed  what  had  been 
identified as deficiencies in the collective management of rights and the need to improve the 
governance and transparency standards of collecting societies and to create a framework for 
facilitating the online licensing of musical works.  

2.2 

Collection and use of expertise 

There was no use of external expertise. 

12 
13 

From 22.10.2009 to 5.1.2010. 
On 23.04.2010. 

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2.3 

Impact assessment 

The impact assessment examines two groups of options to deal with: (a) issues pertaining to 
the  insufficiency  of  governance  and  transparency  standards  applied  by  certain  collecting 
societies,  often  resulting  in  weaknesses  in  their  financial  management;  (b)  issues  stemming 
from  the  lack  of  preparedness  of  certain  authors'  collecting  societies  to  grant  online  multi-
territorial  licences  in  view  of  the  requirements  associated  with  this  kind  of  activity  and  the 
perceived  legal  uncertainty,  making  the  repertoire  aggregation  of  musical  works  more 
difficult.  

The  policy  options  regarding  the  governance  and  transparency  of  collecting  societies  are  as 
follows: 

– 

– 

– 

– 

Retaining  the  status  quo  (A1),  relying  on  the  market  and  peer  pressure  (including 
self-regulation)  would  not  solve  the  cross-border  issues  (e.g.  control  of  royalty 
flows). 

Better enforcement (A2) of existing EU law and more consistency at national level in 
applying  its  principles  would  not  harmonise  the  operating  conditions  of  collecting 
societies. Issues outside the scope of existing principles would remain unsolved. 

The codification of existing principles (A3) would reflect in legislation the principles 
that  have  emerged  from  the  case-law  of  the  Court  of  Justice,  the  Commission's 
antitrust  decisions  and  Recommendation  2005/737/EC  but  it  fails  to  capture  more 
recently  identified  problems  in  relation  to  financial  transparency  and  control  by 
rightholders. 

A governance and transparency framework (A4) would codify the existing principles 
and  provide  a  more  elaborate  framework  of  rules  on  governance  and  transparency, 
increasing the possibilities of control over collecting societies. 

The  following  policy  options  were  examined  to  address  the  complexities  of  the  collective 
licensing of authors' rights in musical works for online uses: 

– 

– 

– 

– 

Under  the  status  quo  (B1),  the  internal  market  would  remain  fragmented  as  rights 
licensing for online services would continue to be complex and burdensome. 

The  European  Licensing  Passport  (B2)  would  foster  the  voluntary  repertoire 
aggregation for online uses of musical works at EU level and the licensing of rights 
through  multi-territorial  licensing  infrastructures.  It  would  lay  down  common  rules 
for all collective licensors throughout the EU and would create competitive pressure 
on societies to develop more efficient licensing practices. 

Parallel  direct  licensing  (B3)  would  allow  rightholders  to  conclude  direct  licences 
with users, without having to withdraw their rights from their collecting societies. It 
would  promote  competition  among  societies  but  would  neither  establish  a  set  of 
minimum common rules for licensors nor necessarily produce repertoire aggregation. 

Extended  collective  licensing  and  country  of  origin  principle  (B4)  would  establish 
the  presumption  that  each  collecting  society  has  the  authority  to  grant  "blanket" 
licences  for  online  uses  covering  the  entire  repertoire  provided  that  the  society  is 
"representative".  This  option  would  neither  provide  any  incentive  for  collecting 

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societies  to  become  more  efficient,  nor  simplify  the  multi-territorial  licensing  of 
rights  (due  to  opt-outs  from  collective  management  which  would  often  lead  to 
repertoire disaggregation). 

– 

A  centralised  portal  (B5)  would  enable  collecting  societies  to  pool  their  repertoire 
for multi-territorial licensing in a single transaction, coordinated through the portal. 
This option raises significant concerns as to its compatibility with competition law. 

After  carefully  weighing  up  the  advantages  and  disadvantages  of  each  of  the  approaches, 
options A4 and B2 were retained. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Legal basis  

The proposal is based on Articles 50(2)(g), 53 and 62 TFEU as facilitating the free provision 
of  services.  The  introduction  of  key  governance  and  transparency  standards  in  collecting 
societies  would  protect  the  interests  of  members  and  users  and  also  thereby  facilitate  and 
encourage  the  provision  of  collective  management  services  across  borders,  in  particular  as 
societies usually manage rights of rightholders from other Member States (including via the 
so-called representation agreements that collecting societies have traditionally concluded with 
collecting  societies  established  in  other  Member  States)  and  cross-border  royalty  flows. 
Moreover,  addressing  the  fragmentation  of  rules  applicable  to  collective  rights  management 
across  Europe  will  facilitate  the  free  movement  of  all  those  services  which  rely  upon 
copyright and related right-protected content. Notably, taking action to facilitate the granting 
of multi-territorial licences to online service providers will substantially ease the distribution 
of and the access to such musical works online. 

3.2. 

Subsidiary and proportionality 

The  EU  action  is  necessary  under  the  principle  of  subsidiarity  (Article  5(3)  TFEU)  as  the 
legal framework  at both  national  and  EU levels has proved to  be insufficient to address the 
problems. The Union has already enacted legislation which harmonises the principal rights of 
rightholders  that  are  managed  by  collecting  societies14  and  that  the  management  of  those 
rights  in  the  internal  market  should  take  place  in  a  comparable,  effective  and  transparent 
manner  across  national  borders.  Moreover,  the  objectives  of  the  proposed  action  cannot  be 
achieved  sufficiently  by  Member  States  and  could  thus  be  better  achieved  at  EU  level  on 
account of the trans-national nature of the problems:  

– 

As regards governance and transparency, a significant share of royalty collections in 
collecting  societies  derives  from  the  non-domestic  repertoire.  The  problem  of 
members that do not have oversight of their society’s activities is more pronounced 
with  respect  to  foreign  rightholders.  As  they  are  not  members  of  the  relevant 
collecting  societies,  they  have  little  insight  into,  and  even  less  influence  on,  the 
decision-making process of societies acting on behalf of their own society. Protecting 
the  interests  of  EU  rightholders  requires  all  royalty  flows,  and  in  particular  cross-
border  flows,  to  be  transparent  and  accounted  for.  It  is  unlikely  that  in  the  future 
Member  States  would  ensure  the  transparency  needed  for  rightholders  to  exercise 

14 

See footnote 5 above. 

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their rights cross-border. EU intervention is the only way of ensuring the exercise of 
rights  and,  in  particular,  the  collection  and  distribution  of  royalties  in  a  consistent 
manner across the EU. 

– 

Multi-territorial  licensing  for  online  uses  of  musical  works  is,  by  definition,  of  a 
cross-border  nature.  Rules  intended  to  ensure  the  smooth  functioning  of  multi-
territorial  licensing  are  accordingly  better  set  up  at  EU  level  since  Member  States 
would  not  be  in  a  position  to  draw  up  rules  which  would  coherently  address  the 
cross-border activities of collecting societies.  

The proposal respects the principle of proportionality (Article 5(4) TEU), and it does not go 
beyond  what  is  necessary  to  achieve  the  objectives  pursued.  The  proposed  rules  on  the 
governance  and  transparency  codify,  to  a  large  extent,  existing  case-law  of  the  Court  of 
Justice  in  the  context  of  decisions  of  the  Commission  taken  in  the  area  of  antitrust15.  They 
also take into account the size of collecting societies and allow Member States to exclude the 
smallest  ones  from  certain  obligations  that  may  be  disproportionate.  The  rules  on  multi-
territorial licensing for online uses of musical works are limited to authors' rights and are the 
minimum  principles  needed  to  make  an  effective  and  modern  licensing  system  workable  in 
the  digital  era  and  to  guarantee  the  repertoire  aggregation,  including  niche  and  less-known 
musical  works.  Appropriate  safeguards  are  provided  in  this  regard:  e.g.  a  collecting  society 
will have the choice as to whether to carry out the multi-territorial licensing of its repertoire 
itself  or  to  entrust  other  societies  with  it;  also  an  author  will  not  be  locked  in  to  a  society 
which is unwilling either to grant multi-territorial licences directly or to allow another society 
to do so on its behalf.  

3.3. 

Choice of legal instrument 

The Commission proposes a Directive. This is in conformity with the requirements of Articles 
50(2)(g),  53  and  62  TFEU.  Also,  a  directive  allows  for  the  necessary  flexibility  as  to  the 
means  to  achieve  these  objectives  and  takes  into  account  the  fact  that  Member  States  have 
different  approaches  as  regards  the  legal  form  of  collecting  societies  and  the  way  such 
societies are supervised.  

3.4. 

Explanation of the proposal 

3.4.1. 

Scope and definitions 

Title  I  contains  general  provisions  on  subject  matter  (Article  1),  scope  (Article  2)  and 
definitions (Article 3). The Directive applies to: (i) the management of copyright and related 
rights by collecting societies, irrespective of the sector in which the societies are active (Title 
II),16  and  (ii)  the  multi-territorial  licensing  of  online  rights  in  musical  works  by  authors' 
collecting  societies  (Title  III).  Titles  I  and  II  also  apply  to  societies  that  carry  out  multi-
territorial licensing under Title III.  

15 

16 

e.g.  Cases  C-395/87  Ministere  public  v  Jean-Louis  Tournier  and  Joined  Cases  110/88  and  242/88 
Francois  Lucazeau  and  others  v  SACEM  and  others,  Commission  decision  of  16.7.2008  (CISAC) 
(COMP/C2/38.698) 
Member States may decide not to apply some requirements to micro enterprises.  

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3.4.2.  Collecting societies  

Title II establishes organisational and transparency rules which apply to all types of collecting 
societies. 

Chapter 1 provides for rules governing the membership organisation of collecting societies. 
Article  4  lays  down  certain  requirements  which  should  apply  to  the  relations  between 
collecting  societies  and  rightholders.  Article  5  ensures  that  rightholders  can  authorise  the 
collecting  society  of  their  choice  to  manage  rights  and  to  withdraw  such  authorisation 
partially or completely. Societies should base their rules on membership and participation in 
the internal decision-making on objective criteria. (Article 6). Article 7 sets out the minimum 
powers  of  the  general  meeting  of  the  members.  Article  8  requires  collecting  societies  to 
establish a supervisory function enabling their members to monitor and exercise control over 
their  management,  while  respecting  the  different  institutional  arrangements  in  the  Member 
States.  Article  9  establishes  certain  obligations  to  ensure  that  societies  are  managed  in  a 
prudent and sound manner.  

Chapter 2 sets out rules on collecting societies’ financial management: 

– 

– 

– 

income  collected  as  a  result  of  the  exploitation  of  the  rights  represented  must  be 
separated from the society's own assets and must be managed under strict conditions 
(Article 10);  

a  collecting  society  must  specify  the  applicable  deductions  in  its  agreements  with 
rightholders and assure members and rightholders fair access to any social, cultural 
or educational services, if funded by deductions (Article 11); 

collecting societies must pay the amounts due to rightholders accurately and without 
undue delay and make efforts to identify rightholders (Article 12). 

Chapter 3 establishes the non-discrimination requirement for the management by a collecting 
society of rights on behalf of another society pursuant to a representation agreement (Article 
13). There is no possibility of deducting the amounts which are due to another society without 
the latter's express consent and payments should be made accurately to other societies (Article 
14). 

Chapter 4 requires collecting societies and users to conduct negotiations in good faith. Tariffs 
should  be  based  on  objective  criteria  and  reflect  the  value  of  the  rights  in  trade  and  of  the 
actual service provided by the society (Article 15).  

Chapter  5  (transparency  and  reporting)  requires  the  following  levels  of  disclosure  by 
collecting societies:  

– 

– 

– 

information to rightholders on amounts collected and paid, management fees charged 
and other deductions made (Article 16); 

information  to  other  collecting  societies  on  the  management  of  rights  under 
representation agreements (Article 17); 

information to rightholders, other societies and users on request (Article 18); 

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– 

– 

information made public on the organisation and functioning of the society (Article 
19); 

annual  publication  of  a  transparency  report,  including  governance  principles  and 
their implementation, financial statements, etc. (Article 20). 

3.4.3.  Multi-territorial licensing by authors' collecting societies of online rights in musical 

works 

Title  III  establishes  the  conditions  that  an  authors'  collecting  society  must  respect  when 
providing multi-territorial licensing services for online rights in musical works (Article 21): 

– 

– 

– 

– 

– 

being  able  to  process  efficiently  and  transparently  the  data  needed  for  the 
exploitation of  such licences (e.g. identifying of its music repertoire, monitoring of 
its usage) by using a time-sensitive, authoritative database containing the necessary 
data (Article 22); 

being transparent as regards the online music repertoire it represents (Article 23); 

offering  rightholders  and  other  societies  the  possibility  to  correct  the  relevant  data 
and to ensure their accuracy (Article 24); 

monitoring the actual usage of the works covered by the licences, being capable of 
processing  usage  reports  and  invoicing.  Procedures  to  enable  the  user  to  challenge 
the  accuracy  of  invoices  (e.g.  to  avoid  double  invoicing)  must  be  established. 
Appropriate industry standards, where available, should be used (Article 25); 

paying  rightholders  and  other  collecting  societies  without  delay  and  provide  them 
with  information  on  works  used  and  financial  data  related  to  their  rights  (e.g. 
amounts collected, deductions made) (Article 26). 

A  collecting  society  may  decide  not  to  grant  multi-territorial  licences  for  online  rights  in 
musical  works,  but  it  could  continue  to  grant  national  licences for  its  own  repertoire  and/or 
national licences for the repertoire of other societies through reciprocal agreements. However, 
in  order  to  ensure  that  repertoires  can  be  easily  aggregated  for  the  benefit  of  music  service 
providers  who  want  to  offer  a  service  as  complete  as  possible  across  Europe  and  for  the 
benefit of cultural diversity and consumers at large, specific safeguards will apply to ensure 
that the repertoire of all societies have access to multi-territorial licensing: 

– 

– 

a  collecting  society  may  request  another  society  granting  multi-territorial  multi-
repertoire  licences  to  have  its  repertoire  represented  on  a  non-discriminatory  and 
non-exclusive  basis  for  the  purpose  of  multi-territorial  licensing  (Article  28).  The 
society receiving the request may not refuse if it is already representing (or if it offers 
to represent) the repertoire of one or more collecting societies for the same purpose 
(Article 29);  

following  a  transitional  period,  rightholders  may  grant  licences  (either  directly  or 
through  another  intermediary)  for  their  own  online  rights  if  their  collecting  society 
does  not  grant  multi-territorial  licences  and  if  it  does  not  enter  into  one  of  the 
agreements mentioned above (Article 30). 

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A  society  is  allowed  to  outsource  services  related  to  the  multi-territorial  licences  it  grants, 
without  prejudice  to  its  liability  towards  rightholders,  online  service  providers  or  other 
collecting societies (Article 27). Title III must also apply to subsidiaries of collecting societies 
covered by the Title (Article 31). 

To  achieve  the  degree  of  flexibility  required  to  encourage  the  granting  of  licences  to 
innovative online services (i.e. which have been available to the public for less than 3 years), 
collecting societies are allowed to grant such licences without being required to use them as a 
precedent for the purposes of determining the terms of other licences (Article 32). By way of 
exception,  collecting  societies  do  not  need  to  comply  with  Title  III  when  granting  multi-
territorial licences to broadcasters for the online use of their radio or television programmes 
containing musical works (Article 33). 

3.4.4.  Enforcement measures  

In  Title  IV  collecting  societies  are  required  to  make  available  to  their  members  and 
rightholders  complaint  and  dispute  resolution  procedures  (Article  34).  Mechanisms  should 
also  be  available  to  settle  disputes  on  licensing  conditions  between  users  and  collecting 
societies  (Article  35).  Finally,  certain  types  of  disputes,  in  relation  to  multi-territorial 
licensing,  between  collecting  societies  and  users,  rightholders  or  other  societies  could  be 
submitted to an independent and impartial alternative dispute resolution system (Article 36). 

Member  States  shall  designate  the  appropriate  competent  authorities  empowered  to  (Article 
39): (a) administer complaints procedures (Article 37); (b) administer effective, proportionate 
and dissuasive sanctions (Article 38) and (c) monitor the application of Title III (Article 40). 
Article  39,  however,  does  not  impose  on  Member  States  to  set  up  independent  supervisors 
specifically dedicated to the oversight of collecting societies.  

3.4.5 

Fundamental rights and specific recitals 

The proposal provides for effective safeguards regarding the application of fundamental rights 
as  laid  down  in  the  Charter  of  Fundamental  Rights  of  the  European  Union.  The  safeguards 
required  from  collecting  societies  as  regards  their  governance  and  the  conditions  on  the 
provision  of  cross-border  multi-territorial  licences  for  online  rights  in  musical  works  would 
restrict  the  freedom  of  collecting  societies  to  conduct  a  business,  as  defined  in  the  Charter, 
compared  to  the  existing  situation.  However,  such  restrictions  would  respect  the  conditions 
set  out  in  the  Charter,  which  provides  that  the  exercise  of  the  relevant  freedoms  may  be 
limited, under certain circumstances. These restrictions are necessary to protect the interests 
of the members, rightholders and users and to set minimum quality standards for the exercise 
by  collecting  societies  of  their  freedom  to  provide  multi-territorial  licensing  services  for 
online uses of musical works in the internal market. 

Due  to  the  complexity  and  scope  of  the  proposal,  Member  States  are  required  to  transmit  a 
correlation table of the provisions of their national law and the Directive. 

4. 

BUDGETARY IMPLICATION 

The proposal has no impact on the European Union budget. 

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2012/0180 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on collective management of copyright and related rights and multi-territorial licensing 
of rights in musical works for online uses in the internal market 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Articles 50(2)(g), 53 and 62 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee17,  

After consulting the European Data Protection Supervisor, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

The  directives  which  have  been  adopted  in  the  area  of  copyright  and  related  rights 
already provide a high level of protection for rightholders and thereby for a framework 
where  the  exploitation  of  content  protected  by  these  rights  can  take  place.  They 
contribute  to  developing  and  maintaining  creativity.  In  an  internal  market  where 
competition  is  not  distorted,  protecting  innovation  and  intellectual  creation  also 
encourages investment in innovative services and products.  

The  dissemination  of  content  which  is  protected  by  copyright  and  related  rights  and 
the  linked  services,  including  books,  audiovisual  productions  and  recorded  music 
require the licensing of rights by different holders of copyright and related rights, such 
as authors, performers, producers and publishers. It is normally for the rightholders to 
choose between the individual or collective management of their rights. Management 
of copyright and related rights includes the granting of licences to users, the auditing 
of  licensees  and  monitoring  of  the  use  of  rights,  the  enforcement  of  copyright  and 
related rights, the collection of rights revenue derived from the exploitation of rights 
and  the  distribution  of  the  amounts  due  to  rightholders.  Collecting  societies  enable 

17 

OJ C , , p. . 

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12 

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rightholders  to  be  remunerated  for  uses  which  they  would  not  be  in  a  position  to 
control  or  enforce  themselves,  including  in  non-domestic  markets.  Moreover,  they 
have  an  important  social  and  cultural  role  as  promoters  of  the  diversity  of  cultural 
expressions by enabling the smallest and less popular repertoires to access the market. 
Article 167 of the Treaty on the Functioning of the European Union requires the Union 
to take cultural aspects into account in its action, in particular in order to respect and to 
promote the diversity of its cultures. 

(3)  When  established  in  the  Union,  collecting  societies  –  as  service  providers  –  must 
comply  with  the  national  requirements  pursuant  to  Directive  2006/123/EC  of  the 
European  Parliament  and  of  the  Council  of  12  December  2006  on  services  in  the 
internal market18 which seeks to create a legal framework for ensuring the freedom of 
establishment  and  the  free  movement  of  services  between  the  Member  States.  This 
implies that collecting societies should be free to provide their services across borders, 
to  represent  rightholders  resident  or  established  in  other  Member  States  or  grant 
licences to users resident or established in other Member States.  

(4) 

(5) 

There  are  significant  differences  in  the  national  rules  governing  the  functioning  of 
collecting  societies,  in  particular  as  regards  their  transparency  and  accountability 
towards  their  members  and  rightholders.  Beyond  the  difficulties  non-domestic 
rightholders  face  when  exercising  their  rights  and  the  too  often  poor  financial 
management  of  the  revenues  collected,  problems  with  the  functioning  of  collecting 
societies lead to inefficiencies in the exploitation of copyright and related rights across 
the  internal  market  to  the  detriment  of  the  members  of  collecting  societies, 
rightholders  and  users  alike.  These  difficulties  do  not  arise  in  the  functioning  of 
independent  rights  management  service  providers  who  act  as  agents  for  rightholders 
for the management of their rights on a commercial basis and in which rightholders do 
not exercise membership rights. 

The need to improve the functioning of collecting societies has already been identified 
in the past. Commission Recommendation 2005/737/EC of 18 May 2005 on collective 
cross-border  management  of  copyright  and  related  rights  for  legitimate  online  music 
services19 set out a number of principles, such as the freedom of rightholders to choose 
their  collecting  society,  the  equal  treatment  of  categories  of  rightholders  and  the 
equitable distribution of royalties. It also called on collecting societies to provide users 
with  sufficient  information  on  tariffs  and  repertoire  in  advance  of  the  negotiations. 
Finally, it contained recommendations on accountability, rightholder representation in 
the decision-making bodies of collecting societies and dispute resolution. Commission 
Recommendation  2005/737/EC  was  however  a  non-binding  instrument  limited  in 
scope. Consequently, it has been unevenly followed.  

(6) 

The protection of the interests of the members of collecting societies, rightholders and 
third  parties  requires  that  the  laws  of  the  Member  States  related  to  copyright 
management  and  multi-territorial  licensing  for  online  rights  in  musical  works  be 
coordinated  with  a  view  to  having  equivalent  safeguards  throughout  the  Union. 
Accordingly, the Directive is based on Article 50(2)(g) of the Treaty. 

18 
19 

OJ L 376, 27.12.2006, p.36. 
OJ L 276, 21.10.2005, p. 54. 

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(7) 

(8) 

(9) 

This Directive should aim at coordinating national rules concerning the access to the 
activity of managing copyright and related rights by collecting societies, the modalities 
for  their  governance,  and  their  supervisory  framework  and  is  also  based  on  Article 
53(1)  of  the  Treaty.  In  addition,  since  this  is  a  sector  offering  services  across  the 
Union, this Directive is also based on Article 62 of the Treaty. 

In order to ensure that holders of copyright and related rights can fully benefit from the 
internal  market  when  their  rights  are  being  managed  collectively  and  that  their 
freedom to exercise their rights is not unduly affected, it is necessary to provide for the 
inclusion  of  appropriate  safeguards  in  the  constituting  documents  of  collecting 
societies.  Moreover,  in  accordance  with  Directive  2006/123/EC  collecting  societies 
should  not  discriminate,  directly  or  indirectly,  between  rightholders  on  the  basis  of 
their  nationality,  place  of  residence  or  place  of  establishment  when  providing  their 
management services. 

Having the freedom to provide and to receive collective management services across 
national  borders  entails  that  rightholders  are  able  to  freely  choose  the  collecting 
society for the management of their rights, such as public performance or broadcasting 
rights,  or  categories  of  rights,  such  as  interactive  communication  to  the  public, 
provided  the  collecting  society  already  manages  such  rights  or  categories  of  rights. 
This implies that rightholders can easily withdraw their rights or categories of rights 
from  a  collecting  society  and  entrust  or  transfer  all  or  part  of  them  to  another 
collecting  society  or  another  entity  irrespective  of  the  Member  State  of  residence  or 
the  nationality  of  either  the  collecting  society  or  the  rightholder.  Collecting  societies 
managing different types of works and other subject matter, such as literary, musical 
or photographic works, should also allow this flexibility to rightholders as regards the 
management of different types of works and other subject matter. Collecting societies 
should  inform  rightholders  of  this  choice  and  allow  them  to  exercise  it  as  easily  as 
possible. Finally, this Directive should not prejudice the possibilities of rightholders to 
manage their rights individually, including for non-commercial uses. 

(10)  Membership  of  collecting  societies  should  be  based  on  objective  and  non-
discriminatory criteria including as regards publishers who by virtue of an agreement 
on  the  exploitation  of  rights,  are  entitled  to  a  share  of  the  income  from  the  rights 
managed by collecting societies and to collect such income from the collecting society. 

(11)  Collecting  societies  are  expected  to  act  in  the  best  interests  of  their  members.  It  is 
therefore  important  to  provide  for  systems  which  enable  members  of  collecting 
societies to exercise their membership rights by participating in the societies' decision-
making  process.  The  representation  of  the  different  categories  of  members  in  the 
decision-making process should be fair and balanced. The effectiveness of the rules on 
the  general  meeting  of  members  of  collecting  societies  may  be  undermined  if  there 
were no provisions on how the general meeting should be run. Thus, it is necessary to 
ensure that the general meeting is convened regularly, and at least annually, and that 
the most important decisions in the collecting society are taken by the general meeting. 

(12)  Members  of  collecting  societies  should  be  allowed  to  participate  and  vote  in  the 
general  meeting;  the  exercise  of  these  rights  may  only  be  subject  to  fair  and 
proportionate restrictions. The exercise of voting rights should be made easy.  

EN 

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(13)  Members should be allowed to take part in monitoring the management of collecting 
societies.  To  this  end,  collecting  societies  should  establish  a  supervisory  function 
appropriate  to  their  organisational  structure  and  allow  members  to  be  represented  in 
the body that exercises this function. To avoid imposing excessive burden on smaller 
collecting  societies  and  to  make  the  obligations  arising  from  this  Directive 
proportionate, Member States should be able to, if they consider this to be necessary, 
exclude  the  smallest  collecting  societies  from  having  to  organise  such  a  supervisory 
function.  

(14)  For reasons of sound management, a collecting society's senior management must be 
independent. Managers and executive directors should be required to declare annually 
to the collecting society whether there are conflicts between their interests and those of 
the society. 

(15)  Collecting societies collect, manage and distribute revenue from the exploitation of the 
rights entrusted to them by rightholders. This revenue is ultimately due to rightholders 
who may be members of that society, or another society. It is therefore important that 
collecting  societies  exercise  the  utmost  diligence  in  collecting,  managing  and 
distributing  that  revenue.  Accurate  distribution  is  only  possible  where  collecting 
societies maintain proper records of membership, licences and use of works and other 
subject  matter.  Where  appropriate,  data  should  also  be  provided  by  rightholders  and 
users  and  verified  by  the  collecting  societies.  Amounts  collected  and  due  to 
rightholders  should  be  managed  separately  from  any  own  assets  of  the  collecting 
society and, if they are invested, pending their distribution to rightholders, this should 
be  carried  out  in  accordance  with  the  investment  policy  decided  by  the  collecting 
societies' general meeting. In order to maintain a high level of protection for the rights 
of rightholders and to ensure that any income which may be derived from exploitation 
of their rights accrues for the benefit of rightholders, the investments made and held 
by the collecting society should be managed in accordance with criteria which would 
oblige the collecting society to act prudently, while allowing the collecting society to 
decide  on  the  most  secure  and  efficient  investment  policy.  This  should  allow  the 
colleting society to opt for an asset allocation that suits the precise nature and duration 
of  any  exposure  to  risk  of  any  rights  revenue  invested  and  which  does  not  unduly 
prejudice  any  rights  revenue  owed  to  rightholders.  Moreover,  in  order  to  ensure  that 
the  amounts  due  to  rightholders  are  appropriately  and  effectively  distributed,  it  is 
necessary  to  require  collecting  societies  to  undertake  diligent  and  good  faith 
reasonable  measures  to  identify  and  locate  the  relevant  rightholders.  It  is  also 
appropriate to provide for the approval by members of collecting societies of the rules 
governing  any  situation  where,  due  to  the  lack  of  identified  or  located  rightholders, 
amounts collected cannot be distributed.  

(16)  Since rightholders are entitled to be remunerated for the exploitation of their rights, it 
is important for any deduction, other than management fees or deductions required by 
national law, to be decided by the members of collecting societies and for the societies 
to be transparent towards rightholders regarding the rules governing those deductions. 
Any such rightholder should have access in a non-discriminatory manner to any social, 
cultural  or  educational  service  funded  through  such  deductions.  However,  this 
Directive should not affect national law on any aspects that are not regulated by this 
Directive. 

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(17)  Collecting  societies  may  manage  rights  and  collect  revenue  from  their  exploitation 
('rights revenue') under representation agreements with other societies. To protect the 
rights of the members of the other collecting societies, a society should not distinguish 
between the rights  it manages  under representation  agreements and those it manages 
directly  for  its  rightholders.  Nor  should  the  collecting  society  be  allowed  to  apply 
deductions  to  the  rights  revenue  collected  on  behalf  of  another  collecting  society 
without the other society's express consent.  

(18)  Fair commercial terms in licensing are particularly important to ensure that users can 
license  the  works  and  other  protected  subject-matter  for  which  a  collecting  society 
represents  rights  and  to  ensure  the  remuneration  of  rightholders.  Collecting  societies 
and  users  should  therefore  conduct  licensing  negotiations  in  good  faith  and  apply 
tariffs determined on the basis of objective criteria.  

(19)  To  enhance  the  trust  of  rightholders,  users  and  other  collecting  societies  in  the 
management services provided by collecting societies, each collecting society should 
be  required  to  set  up  specific  transparency  measures.  Each  collecting  society  should 
therefore  inform  individual  rightholders  of  the  amounts  paid  to  them  and  the 
corresponding  deductions  made.  They  should  also  be  required  to  provide  sufficient 
information,  including  financial  information,  to  the  other  collecting  societies  whose 
rights they manage through representation agreements. Each collecting society should 
also  make  public  enough  information  to  ensure  that  rightholders,  users  and  other 
collecting societies understand how it is structured and how it carries out its activities. 
Collecting  societies  should  in  particular  disclose  to  rightholders,  users  and  other 
collecting societies the scope of their repertoire and their rules on fees, deductions and 
tariffs. 

(20)  To  ensure  that  rightholders  are  in  a  position  to  monitor  the  performance  of  their 
collecting  societies  and  compare  their  respective  performance,  collecting  societies 
should  make  public  an  annual  transparency  report  comprising  comparable  audited 
financial  information  specific  to  the  activities  of  collecting  societies.  Collecting 
societies  should  also  make  public  an  annual  special  report  on  the  use  of  amounts 
dedicated  to  social,  cultural  and  educational  services.  To  avoid  imposing  excessive 
burden  on  smaller  collecting  societies  and  to  make  the  obligations  arising  from  this 
Directive proportionate, Member States should be able to, if  they consider this to be 
necessary,  exclude  the  smallest  collecting  societies  from  certain  transparency 
obligations.  

(21)  The  providers  of  online  services  which  make  use  of  musical  works,  such  as  music 
services that allow consumers to download music or to listen to it in streaming mode, 
as  well  as  other  services  providing  access  to  films  or  games  where  music  is  an 
important element, must first obtain the right to use such works. Directive 2001/29/EC 
of the European Parliament and of the Council of 22 May 2001 on the harmonisation 
of certain aspects of copyright and related rights in the information society20 requires a 
licence for each of the rights in the online exploitation of musical works. These rights 
are the exclusive right of reproduction and the exclusive right of communication to the 
public of musical works, which includes the right of making available. They may be 
managed  by  the  individual  rightholders  themselves,  such  as  authors  or  music 

20 

OJ L 167, 22.6.2001, p. 10. 

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publishers,  or  by  collecting  societies  that  provide  collective  management  services  to 
rightholders.  Different  collecting  societies  may  manage  the  reproduction  and  the 
communication to the public rights of authors. Furthermore, there are instances where 
several  rightholders  have  rights  in  the  same  work  and  may  have  authorised  different 
collecting  societies  to  license  their  respective  shares  of  rights  in  the  work.  Any  user 
wishing  to  provide  an  online  service  offering  a  wide  choice  of  musical  works  to 
consumers,  would  need  to  aggregate  rights  in  works  from  different  rightholders  and 
collecting societies. 

(22)  While the Internet knows no borders, the online market for music services in the EU is 
still fragmented, and a single market has still not been fully achieved. The complexity 
and difficulty associated with the collective management of rights in Europe has, in a 
number of instances, exacerbated the fragmentation of the European digital market for 
online  music  services.  This  situation  comes  in  stark  contrast  to  the  fast  growing 
demand of consumers for access to digital content and associated innovative services, 
including across national borders.  

(23)  Commission Recommendation 2005/737/EC promoted a new regulatory environment 
better suited to the management, at Union level, of copyright and related rights for the 
provision  of  legitimate  online  music  services.  It  recognised  that  in  an  era  of  online 
exploitation  of  musical  works,  commercial  users  need  a  licensing  policy  that 
corresponds  to  the  ubiquity  of  the  online  environment  and  which  is  multi-territorial. 
However, the Recommendation, due to its voluntary nature, has not been sufficient to 
encourage the widespread multi-territorial licensing of online rights in musical works 
and to address the specific demands of multi-territorial licensing.  

(24) 

In  the  online  music  sector,  where  collective  management  of  authors'  rights  on  a 
territorial basis remains the norm, it is essential to create conditions conducive to the 
most  effective  licensing  practices  by  collecting  societies,  in  an  increasingly  cross-
border  context.  It  is  therefore  appropriate  to  provide  for  a  set  of  rules  coordinating 
basic conditions for the provision by collecting societies of multi-territorial collective 
licensing  of  authors'  online  rights  in  musical  works.  These  provisions  should  ensure 
the  necessary  minimum  quality  of  the  cross-border  services  provided  by  collecting 
societies,  notably  in  terms  of  transparency  of  repertoire  represented  and  accuracy  of 
financial flows related to the use of the rights. They should also set out a framework 
for  facilitating  the  voluntary  aggregation  of  music  repertoire  and  thus  reducing  the 
number of licences a user needs to operate a multi-territorial service. These provisions 
should enable a collecting society to request another collecting society to represent its 
repertoire  on  a  multi-territorial  basis  where  it  cannot  fulfil  the  requirements  itself. 
There  should  be  an  obligation  on  the  requested  society,  provided  that  it  aggregates 
repertoire  and  offers  or  grants  multi-territorial  licences,  to  accept  the  mandate  of  the 
requesting society. The development of legal online music services across the Union 
should also contribute to the fight against piracy. 

(25)  The  availability  of  accurate  and  comprehensive  information  on  the  musical  works, 
rightholders and the rights that each collecting society is authorised to represent in a 
given  Member  State  is  of  particular  importance  for  an  effective  and  transparent 
licensing process, for the subsequent monitoring of the use of licensed rights and the 
related invoicing of service providers as well as for the distribution of amounts due to 
rightholders. For this reason, collecting societies granting multi-territorial licences for 
musical  works  should  be  able  to  process  such  detailed  data  quickly  and  accurately. 

EN 

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This requires the use of continually updated databases on ownership of rights that are 
licensed on a multi-territorial basis, containing data that allow for the identification of 
works, rights, rightholders and Member States which a collecting society is authorised 
to  represent.  These  databases  should  also  help  to  match  information  on  works  with 
information  on  phonograms  or  any  other  fixation  in  which  the  work  has  been 
incorporated. It is also important to ensure that prospective licensees and rightholders 
have access to the information they need to identify the repertoire that those collecting 
societies  are  representing,  without  prejudice  to  any  measure  these  societies  may  be 
entitled to take to protect the accuracy and integrity of the data, to control its reuse and 
to protect personal data and commercially sensitive information. 

(26)  To ensure that the data on the music repertoire they process is as accurate as possible, 
collecting  societies  granting  multi-territorial  licences  of  musical  works  should  be 
required  to  update  their  databases  continuously  and  without  delay.  They  should 
establish  easily  accessible  procedures  to  enable  rightholders  and  other  collecting 
societies  whose  repertoire  they  may  represent  to  inform  them  about  any  inaccuracy 
that  the  collecting  societies  databases  may  contain  in  respect  of  works  they  own  or 
control,  including  rights  –  in  whole  or  in  part  –  and  Member  States  for  which  they 
have  mandated  the  relevant  collecting  society  to  act.  They  should  also  have  the 
capacity  to  process  electronically  the  registration  of  works  and  authorisations  to 
manage  rights.  Given  the  importance  of  information  automation  for  the  fast  and 
effective  processing  of  data,  collecting  societies  should  provide  for  the  use  of 
electronic means for the structured communication of that information by rightholders. 
Collecting societies should, as far as possible, ensure that such electronic means take 
into  account  the  relevant  industry  standards  or  practices  developed  at  international 
level or at the level of the Union. 

(27)  Digital technology allows the automated monitoring by collecting societies of the use 
by  the  licensee  of  the  licensed  musical  works  and  facilitates  invoicing.  Industry 
standards for music usage, sales reporting  and invoicing are instrumental to improve 
the  efficiency  in  the  exchange  of  data  between  collecting  societies  and  users.  The 
monitoring of the use of licences should respect fundamental rights, namely the right 
to respect of private and family life and data protection. To ensure that these efficiency 
gains  result  in  faster  financial  processing  and  ultimately  in  earlier  payments  to 
rightholders, collecting societies should be required to invoice service providers and to 
distribute  amounts  due  to  rightholders  without  delay.  For  this  requirement  to  be 
effective, it is necessary that licensees make every effort to provide collecting societies 
with accurate and timely reports on the use of the works. Collecting societies should 
not  be  required  to  accept  users'  reports  in  proprietary  formats  when  widely  used 
industry standards are available.  

(28)  Access to and handling of large amounts of data, and a high technical capability are 
necessary to provide high quality management services by collecting societies granting 
multi-territorial collective licences. Collecting societies should not be prevented from 
outsourcing  services  relating  to  the  granting  of  multi-territorial  licences  for  online 
rights  in  musical  works,  provided  that  their  liability  towards  rightholders,  online 
services  providers  or  other  collecting  societies  is  unaffected  and  data  protection 
obligations as set out in Article 17 of Directive 95/46/EC of the European Parliament 
and of the Council of 24 October 1995 on the protection of individuals with regard to 

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the processing of personal data and on the free movement of such data21 are respected. 
Sharing or consolidation of back office capabilities should help the collecting societies 
to  improve  management  services  and  rationalise  investments  in  data  management 
tools.  

(29)  Aggregating of different music repertoires for multi-territorial licensing facilitates the 
licensing  process  and,  by  making  all  repertoires  accessible  to  the  market  for  multi-
territorial licensing, enhances cultural diversity and contributes to reducing the number 
of  transactions  an  online  service  provider  needs  in  order  to  offer  that  service.  That 
aggregation  of  repertoires  should  facilitate  the  development  of  new  online  services, 
and  should  also  result  in  a  reduction  of  transaction  costs  that  are  passed  on  to 
consumers.  Therefore,  collecting  societies  that  are  not  willing  to  or  are  not  able  to 
grant  multi-territorial  licences  directly  in  their  own  music  repertoire  should  be 
encouraged to mandate other collecting societies voluntarily with the task of managing 
their  repertoire  under  non-discriminatory  terms.  Where  the  request  to  mandate  takes 
place,  the  requested  collecting  society  should  be  required  to  accept,  provided  that  it 
aggregates  repertoire  and  offers  or  grants  multi-territorial  licences.  In  addition, 
exclusivity  in  agreements  on  multi-territorial  licenses  would  restrict  the  choices 
available  to  users  seeking  multi-territorial  licenses  and  also  restrict  the  choices 
available to collecting societies seeking administration services for their repertoire on 
a  multi-territorial  basis.  Therefore,  all  representation  agreements  between  collecting 
societies  providing  for  multi-territorial  licensing  should  be  concluded  on  a  non-
exclusive basis.  

(30)  The transparency of the conditions under which collecting societies manage the online 
rights  they  have  been  authorised  to  represent  is  of  particular  importance  for 
rightholders. Collecting societies should therefore provide sufficient information to its 
rightholders  on  the  main  terms  of  any  agreement  mandating  any  other  collecting 
society  to  represent  its  online  music  rights  for  the  purposes  of  multi-territorial 
licensing.  

(31) 

It  is  also  important  to  require  any  collecting  societies  that  offer  or  grant  multi-
territorial licences to agree to represent the repertoire of any collecting societies that 
decide not to do so directly. To ensure that this requirement is not disproportionate and 
does not go beyond what is necessary, the requested collecting society should only be 
required  to  accept  the  representation  if  the  request  is  limited  to  the  online  right  or 
categories  of  online  rights  which  it  represents.  Moreover,  this  requirement  should 
apply only to collecting societies which aggregate repertoire and should not extend to 
collecting  societies  which  provide  multi-territorial  licences  for  their  own  repertoire 
only. Nor should it apply to collecting societies which merely aggregate rights in the 
same  works  for  the  purpose  of  being  able  to  license  jointly  both  reproduction  and 
communication  to  the  public  rights  in  such  works.  Any  agreement  whereby  a 
collecting  society  mandates  another  collecting  society  or  societies  to  grant  multi-
territorial  licences  in  its  own  music  repertoire  for  online  use  should  not  prevent  that 
collecting  society  from  continuing  to  grant  licences  limited  to  the  territory  of  the 
Member State where that collecting society is established, in its own repertoire and in 
any other repertoire it may be authorised to represent in that Member State. 

21 

OJ L 281, 23.11.1995, p. 31.  

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(32)  The  objectives  and  the  effectiveness  of  the  rules  on  multi-territorial  licensing  by 
collecting  societies  would  be  largely  jeopardised  if  rightholders  were  not  able  to 
exercise their rights by granting multi-territorial licences when the collecting society to 
which  they  have  granted  their  rights  does  not  grant  or  offer  multi-territorial  licences 
and does not want to mandate another collecting society to do so. For this reason, it is 
important  in such circumstances,  to enable  rightholders to exercise the right to  grant 
the  multi-territorial  licences  required  by  online  service  providers  themselves  or 
through  another  party  or  parties,  without  having  to  withdraw  their  rights  from  the 
collecting society.  

(33) 

(34) 

In the interest of the online market, key obligations relating to access to information, 
data handling, invoicing and payment capabilities must also apply to any entity owned, 
in whole or in part, by a collecting society and which offers or grants multi-territorial 
licences in online rights in musical works.  

In  the  digital  environment,  collecting  societies  are  regularly  required  to  license  their 
repertoire for totally new forms of exploitation and business models. In such cases and 
in order to foster an environment conducive to the development of such licences, and 
to do so as swiftly as possible, collecting societies should have the flexibility required 
to provide individualised and innovative licences, without the risk of their being used 
as a precedent for determining the terms of other different types of licences.  

(35)  Broadcasting organisations generally rely on a licence from a local collecting society, 
for  their  own  broadcasts  of  television  and  radio  programmes  which  include  musical 
works.  This  licence  is  often  limited  to  broadcasting  activities.  A  licence  for  online 
rights  in  musical  works  would  be  required  in  order  to  allow  such  television  or  radio 
broadcasts to be also available online. To facilitate the licensing of online music rights 
for  the  purposes  of  simultaneous  and  delayed  transmission  online  of  television  and 
radio broadcasts, it is necessary to provide for a derogation from the rules that would 
otherwise  apply  to  the  multi-territorial  licensing  of  musical  works  for  online  uses. 
Such derogation should be limited to what is necessary to allow access to television or 
radio programmes online and to material having a clear and subordinate relationship to 
the  original  broadcast  produced  for  purposes  such  as  supplementing,  previewing  or 
reviewing that  television  or  radio  programme. That derogation should not operate so 
as to distort competition with other services which give consumers access to individual 
musical or audiovisual works online, or lead to restrictive practices, such as market or 
customer sharing, in breach of Articles 101 or 102 of the Treaty on the Functioning of 
the European Union.  

(36) 

It is necessary to ensure the effective enforcement of the provisions of the national law 
adopted  pursuant  to  this  Directive.  Collecting  societies  should  offer  their  members 
specific  procedures  for  the  handling  of  complaints  and  the  resolution  of  disputes. 
These procedures should also be made available to other rightholders represented by 
the  collecting  society.  It  is  also  appropriate  to  ensure  that  Member  States  have 
independent,  impartial  and  effective  dispute  resolution  bodies  capable  of  settling 
commercial  disputes  between  collecting  societies  and  users  on  existing  or  proposed 
licensing  conditions  as  well  as  on  situations  in  which  the  granting  of  a  licence  is 
refused. Furthermore, the effectiveness of the rules on the multi-territorial licensing of 
online  rights  in  musical  works  could  be  undermined  if  disputes  between  collecting 
societies and their counterparts were not solved quickly and efficiently by independent 
and impartial bodies. As a result, it is appropriate to provide, without prejudice to the 

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right  of  access  to  a  tribunal,  for  an  easily  accessible,  efficient  and  impartial  out-of-
court procedure for resolving conflicts between collecting societies, on the one hand, 
and  online  music  service  providers,  rightholders  or  other  collecting  societies,  on  the 
other. 

(37)  Moreover, Member States should establish appropriate procedures by means of which 
it will be possible to make complaints against collecting societies who do not comply 
with  the  law  and  to  ensure  that,  where  appropriate,  effective,  proportionate  and 
dissuasive sanctions are imposed. Member States should determine which authorities 
should be  responsible  for administering the complaints procedures and sanctions. To 
ensure that the requirements for multi-territorial licensing are complied with, specific 
provisions  on  the  monitoring  of  their  implementation  should  be  laid  down.  The 
competent  authorities  of  the  Member  States  and  the  European  Commission  should 
cooperate with each other to this end.  

(38) 

It is important for collecting societies to respect the rights to private life and personal 
data protection of any rightholder, member, user and other individual whose personal 
data they process. Directive 95/46/EC governs the processing of personal data carried 
out in the Member States in the context of this Directive and under the supervision of 
the  Member  States  competent  authorities,  in  particular  the  public  independent 
authorities designated by the Member States. Rightholders should be given appropriate 
information about the processing of their data, the recipients of that data, time limits 
for retention of their data in their database, and how they can exercise their rights to 
access,  correct  or  delete  their  personal  data  concerning  them  in  accordance  with 
Articles 10 and 11 of Directive 95/46/EC. In particular, unique identifiers which allow 
for the indirect identification of a person should be treated as personal data within the 
meaning of point (a) of Article 2 of that Directive. 

(39) 

In the light of Article 12(b) of Directive 95/46/EC which grants to every data subject 
the right to obtain rectification, erasure or blocking of inaccurate or incomplete data, 
this Directive also ensures that inaccurate information regarding rightholders or other 
collecting  societies  in  the  case  of  multi-territorial  licenses  is  to  be  corrected  without 
undue delay. 

(40)  Provisions on enforcement measures should be without prejudice to the competencies 
of independent public national authorities established by the Member States pursuant 
to  Article  28  of  Directive  95/46/EC  to  monitor  the  respect  of  national  provisions 
adopted in implementation of that Directive. 

(41)  This Directive respects the fundamental rights and observes the principles enshrined in 
the  Charter  of  Fundamental  Rights  of  the  European  Union.  The  requirement  in  the 
Directive  that  dispute  resolution  mechanisms  should  be  made  available  to  members, 
rightholders,  users  and  collecting  societies  should  not  prevent  the  parties  from 
exercising  their  right  of  access  to  a  tribunal  as  guaranteed  in  the  Charter  of 
Fundamental Rights of the European Union.  

(42)  Since  the  objective  of  this  Directive,  to  improve  the  ability  of  their  members  to 
exercise  control  over  the  activities  of  collecting  societies,  to  guarantee  sufficient 
transparency  by  collecting  societies  and  to  improve  the  multi-territorial  licensing  of 
authors'  rights  for  online  use  of  musical  works  cannot  be  sufficiently  achieved  by 
Member States and can therefore, by reason of its scale and effects, be better achieved 

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at  Union  level,  the  Union  may  adopt  measures  in  accordance  with  the  principle  of 
subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In  accordance 
with the principle of proportionality, as set out in that same Article, this Directive does 
not go beyond what is necessary in order to achieve that objective. 

(43)  The provisions of this Directive are without prejudice to the application of competition 
law  rules,  and  any  other  relevant  law  in  other  areas  including  confidentiality,  trade 
secrets, privacy, access to documents, the law of contract and private international law 
relating to the conflict of laws and the jurisdiction of courts. 

(44) 

In  accordance  with  the  Joint  Political  Declaration  of  Member  States  and  the 
Commission  on  explanatory  documents  of  28  September  2011,  Member  States  have 
undertaken  to  accompany,  in  justified  cases,  the  notification  of  their  transposition 
measures  with  one  or  more  documents  explaining  the  relationship  between  the 
components  of  a  directive  and  the  corresponding  parts  of  national  transposition 
instruments. With regard to this Directive, the legislator considers the transmission of 
such documents to be justified. 

HAVE ADOPTED THIS DIRECTIVE: 

TITLE I 

GENERAL PROVISIONS 

Article 1 
Subject matter 

This  Directive  lays  down  requirements  necessary  to  ensure  the  proper  functioning  of  the 
management  of  copyright  and  related  rights  by  collecting  societies.  It  also  lays  down 
requirements for multi-territorial licensing by collecting societies of authors' rights in musical 
works for online use. 

Article 2 
Scope 

Titles  I,  II  and  IV  with  the  exception  of  Articles  36  and  40  shall  apply  to  all  collecting 
societies established in the Union.  

Title  III  and  Articles  36  and  40  of  Title  IV  shall  only  apply  to  those  collecting  societies 
managing authors' rights in musical works for online use on a multi-territorial basis.  

Article 3 
Definitions 

For the purposes of this Directive, the following definitions shall apply: 

(a) 

'collecting society' means any organisation which is authorised by law or by way of 
assignment,  licence  or  any  other  contractual  arrangement,  by  more  than  one 

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(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

(k) 

(l) 

rightholder,  to  manage  copyright  or  rights  related  to  copyright  as  its  sole  or  main 
purpose and which is owned or controlled by its members; 

'rightholder' means any natural person or legal entity other than a collecting society 
that holds a copyright or related right or who under an agreement for the exploitation 
of rights is entitled to a share of the rights revenue from any of the rights managed by 
the collecting society; 

'member of a collecting society' means a rightholder or an entity directly representing 
rightholders,  including  other  collecting  societies  and  associations  of  rightholders, 
fulfilling the membership requirements of the collecting society;  

'statute' means the memorandum and articles of association, the statute, the rules or 
document of constitution of a collecting society; 

'director' means any individual managing director, any member of the administrative 
board, the management or the supervisory board of a collecting society;  

'rights  revenue'  means  income  collected  by  a  collecting  society  on  behalf  of 
rightholders,  whether  from  an  exclusive  right,  a  right  to  remuneration  or  a  right  to 
compensation;  

'management  fees'  means  the  amount  charged  by  a  collecting  society  in  order  to 
cover the costs of its management of copyright or related rights services; 

'representation  agreement'  means  any  agreement  between  collecting  societies 
whereby  one  collecting  society  mandates  another  collecting  society  to  represent 
rights in its repertoire, including an agreement concluded under Articles 28 and 29;  

'user' means any natural person or legal entity who is carrying out acts subject to the 
authorisation  of  rightholders,  the  remuneration  of  rightholders  or  the  payment  of 
compensation to rightholders and who is not acting in the capacity of a consumer;  

'repertoire'  means the  works  or  other  protected subject  matter  in which a collecting 
society manages rights;  

'multi-territorial licence' means a licence which covers the territory of more than one 
Member State; 

'online rights in musical works' means any of the rights in a musical work provided 
under Articles 2 and 3 of Directive 2001/29/EC which are required for the provision 
of an online music service; 

(m) 

'online  music  service'  means  an  information  society  service  within  the  meaning  of 
Article 1(2) of Directive 98/34/EC which requires the licensing of musical works. 

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TITLE II 

COLLECTING SOCIETIES 

Chapter 1 

Membership and organisation of collecting societies  

Article 4 
General principles 

Member States shall ensure that collecting societies act in the best interest of their members 
and do not impose on rightholders whose  rights they manage any obligations  which are  not 
objectively necessary for the protection of the rights and interests of these rightholders. 

Article 5 
Rights of rightholders 

1. 

2. 

3. 

4. 

5. 

Member  States  shall  ensure  that  rightholders  have  the  rights  as  laid  down  in 
paragraphs 2 to 7 and that those rights appear in the statute or the membership terms 
of the collecting society. 

Rightholders shall have the right to authorise a collecting society of their choice to 
manage the rights, categories of rights or types of works and other subject matter of 
their choice, for the Member States of their choice, irrespective of the Member State 
of residence or of establishment or the nationality of either the collecting society or 
the rightholder.  

Rightholders  shall  have  the  right  to  terminate  the  authorisation  to  manage  rights, 
categories of rights or types of works and other subject matter granted to a collecting 
society  or  to  withdraw  from  a  collecting  society  any  of  the  rights  or  categories  of 
rights  or  types  of  works  and  other  subject  matter  of  their  choice,  for  the  Member 
States of their choice, upon serving reasonable notice not exceeding six months. The 
collecting  society  may  decide  that  such  termination  or  withdrawal  will  take  effect 
only at the middle and at the end of the financial year, whichever is sooner after the 
expiry of the notice period.  

If  there  are  amounts  due  to  a  rightholder  for  acts  of  exploitation  which  occurred 
before the termination of the authorisation or the withdrawal of rights took effect, or 
under  a  licence  granted  before  such  termination  or  withdrawal  took  effect,  the 
rightholder  shall  retain  his  rights  under  Articles  12,  16,  18  and  34  with  respect  to 
those acts of exploitation.  

Collecting societies shall not restrict the exercise of rights provided under paragraphs 
3 and 4 by requiring that the management of rights or categories of rights or type of 

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6. 

7. 

1. 

2. 

3. 

4. 

5. 

1. 

2. 

3. 

works and other subject matter which are subject to the termination or the withdrawal 
are entrusted to another collecting society. 

Member States shall ensure that the rightholder gives express consent specifically for 
each right or category of rights or type of works and other subject matter which that 
rightholder authorises the collecting society to manage and that any such consent is 
evidenced in documentary form.  

A collecting society shall inform rightholders of their rights under paragraphs 1 to 6 
before  obtaining  their  consent  to  manage  any  right  or  category  of  rights  or  type  of 
works and other subject matter.  

Collecting societies shall inform their members of their rights under paragraphs 1 to 
6 within six months of the transposition date of this Directive. 

Article 6 
Membership rules of collecting societies 

Member States shall ensure that collecting societies comply with the rules laid down 
in paragraphs 2 to 5.  

Collecting  societies  shall  accept  rightholders  as  members  if  they  fulfil  the 
membership  requirements.  They  may  only  refuse  a  request  for  membership  on  the 
basis  of  objective  criteria.  These  criteria  shall  be  included  in  the  statute  or  the 
membership terms of the collecting society and shall be made publicly available. 

The  statute  of  the  collecting  society  shall  provide  for  appropriate  and  effective 
mechanisms  of  participation  of  its  members  in  the  collecting  society's  decision-
making  process.  The  representation  of  the  different  categories  of  members  in  the 
decision-making process shall be fair and balanced. 

Collecting societies shall allow their members to communicate by electronic means, 
including for the purposes of exercising members' rights. The use of electronic means 
shall not depend upon the member's residence or place of establishment.  

Collecting  societies  shall  keep  records  of  members  which  are  regularly  updated  so 
that members can be properly identified and located. 

Article 7 
General meeting of members of the collecting society 

Member States shall ensure that the general meeting of the members of the collecting 
societies is organised according to the rules laid down in paragraphs 2 to 8. 

A general meeting of the members of the collecting society shall be convened at least 
once a year. 

The  general  meeting  shall  approve  any  amendments  to  the  statute  and  the 
membership terms of the collecting society, where those terms are not regulated by 
the statute. 

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4. 

The general meeting shall have the power to decide on the appointment or dismissal 
of  the  directors  and  approve  their  remuneration  and  other  benefits  such  as  non-
monetary benefits, pension awards, right to other awards and rights to severance pay. 

The general meeting shall not decide on the appointment or dismissal of members of 
the  management  board  or  the  individual  managing  director  where  the  supervisory 
board has the power to appoint or dismiss them. 

5. 

In  accordance  with  the  provisions  laid  down  in  Chapter  2  of  Title  II,  the  general 
meeting shall, at least, take decisions on the following issues:  

(a) 

(b) 

the policy on the distribution of the amounts due to rightholders, except where 
the general meeting decides to delegate this decision to the body exercising the 
supervisory function; 

the  use  of  the  amounts  due  to  rightholders  which cannot be distributed as  set 
out in Article 12(2) except where the general meeting decides to delegate this 
decision to the body exercising the supervisory function;  

(c) 

the  general  investment  policy,  including  on  granting  loans  or  providing 
security or guarantee for loans, with regard to rights revenue; 

(d) 

the rules on deductions from rights revenue. 

The general meeting shall control the activities of the collecting society by, at least, 
deciding  on  the  appointment  and  removal  of  the  auditor  and  approving  the  annual 
transparency report and the auditor's report. 

Any  restriction  on  the  right  of  the  members  of  the  collecting  society  to  participate 
and  to  exercise  voting  rights  at  the  general  meeting  shall  be  fair  and  proportionate 
and be based on the following criteria: 

(a) 

duration of membership; 

(b) 

amounts  received  or  due  to  a  member  in  relation  to  the  specified  financial 
period. 

These  criteria  shall  be  included  in  the  statute  or  the  membership  terms  of  the 
collecting  society  and  shall  be  made  publicly  available  in  accordance  with  Articles 
17 and 19. 

Every member of a collecting society shall have the right to appoint any other natural 
or  legal  person  as  a  proxy  holder  to  attend  and  vote  at  the  general  meeting  in  his 
name.  

Article 8 
Supervisory function 

Member  States  shall  ensure  that  the  collecting  society  establishes  a  supervisory 
function responsible for continuously monitoring the activities and the performance 
of  the  duties  of  the  persons  entrusted  with  managerial  responsibilities  in  the 

6. 

7. 

8. 

1. 

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collecting society. There shall be fair and balanced representation of the members of 
the  collecting  society  in  the  body  exercising  this  function  in  order  to  ensure  their 
effective participation.  

2. 

The body entrusted with the supervisory function shall meet regularly and shall have 
at least the following powers: 

(a) 

to approve any acquisition of immovable property by the collecting society; 

(b) 

(c) 

to  approve  the  setting-up  of  subsidiaries,  acquisitions  of  other  entities, 
acquisitions of shares or rights in other entities, mergers and alliances; 

to approve the taking-out of loans, granting of loans and provision of security 
or guarantee for loans.  

3. 

Member  States  may  decide  that  paragraphs  1  and  2  shall  not  apply  to  a  collecting 
society which on its balance sheet date does not exceed the limits of two of the three 
following criteria: 

(a) 

balance sheet total: EUR 350 000; 

(b)  net turnover: EUR 700 000; 

(c) 

average number of employees during the financial year: ten. 

Article 9 
Obligations of the persons who effectively manage the business of the collecting society 

1. 

2. 

Member States shall ensure that the persons who effectively manage the business of 
a  collecting  society  and  its  directors,  with  the  exception  of  the  directors  exercising 
supervisory function, manage the collecting society in a sound and prudent manner, 
using  sound  administrative  and  accounting  procedures  and  internal  control 
mechanisms.  

Member States shall ensure that the persons who effectively manage the business of 
a  collecting  society  and  its  directors,  with  the  exception  of  the  directors  exercising 
supervisory  function,  design  procedures  so  as  to  avoid  conflicts  of  interest.  The 
collecting  society  shall  have  procedures  to  identify,  manage,  monitor  and  disclose 
conflicts of interest in order to prevent them from adversely affecting the interests of 
members of the society. 

Those  procedures  shall  include  an  annual  individual  statement  by  each  of  those 
persons and directors, to the body entrusted with the supervisory function, containing 
the following information: 

(a) 

any interests in the collecting society; 

(b) 

any  remuneration  received  from  the  collecting  society,  including  pension 
schemes, advantages in kind and other types of advantages; 

(c) 

any amounts received as a rightholder from the collecting society; 

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(d) 

a declaration on any actual or potential conflict between any personal interests 
and  those  of  the  collecting  society  or  between  any  obligations  towards  the 
collecting society and any duty to any other legal or natural person. 

Chapter 2 

Management of rights revenue 

Article 10 
Collection and use of rights revenue 

1. 

2. 

3. 

4. 

1. 

2. 

Collecting societies shall be diligent in the collection and the management of rights 
revenue. 

The  collecting  society  shall  manage  and  keep  separate  the  rights  revenue  and  any 
income derived from its investment from its own assets, the income derived from its 
management services or the income derived from any other activities.  

The  collecting  society  shall  not  be  allowed  to  use  rights  revenue  and  any  income 
derived  from  its  investment  for  its  own  account,  save  that  it  may  deduct  its 
management fees. 

Where,  pending  the  distribution  of  the  amounts  due  to  rightholders,  the  collecting 
society  invests  the  rights  revenue  and  any  income  derived  from  its  investment,  it 
shall  do  so  in  accordance  with  the  general  investment  policy  referred  to  in  Article 
7(5)(c) and the following rules: 

(a) 

(b) 

(c) 

the assets shall be invested in the best interests of members; where there is any 
potential  conflict  of  interest,  the  collecting  society  shall  ensure  that  the 
investment is made in the sole interest of members; 

the assets shall be invested in order to ensure the security, quality, liquidity and 
profitability of the portfolio as a whole; 

the assets shall be properly diversified in order to avoid excessive reliance on 
any particular asset and accumulations of risks in the portfolio as a whole. 

Article 11 
Deductions 

Member  States  shall  ensure  that  agreements  governing  the  relationship  of  the 
collecting  society  with  its  members  and  rightholders  shall  specify  deductions 
applicable to the rights revenue referred to in point (e) of Article 16. 

Member States shall ensure that, where a collecting society provides social, cultural 
or educational services funded through deductions from rights revenue, rightholders 
are entitled to the following: 

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(a) 

(b) 

social, cultural or educational services on the basis of fair criteria, in particular 
in relation to the access to and the extent of those services; 

rightholders  who  have  terminated  the  authorisation  to  manage  rights  or 
categories  of  rights  or  types  of  works  and  other  subject  matter  or  who  have 
withdrawn  their  rights  or  categories  of  rights  or  types  of  works  and  other 
subject  matter  from  the  collecting  society,  continue  to  have  access  to  those 
services. The criteria in relation to the access to and the extent of those services 
may take into consideration the rights revenue generated by those rightholders 
and  the  duration  of  the  authorisation  to  manage  rights,  provided  that  such 
criteria  are  also  applicable  to  rightholders  who  have  not  terminated  such 
authorisation or have not withdrawn their rights or categories of rights or types 
of works and other subject matter from the collecting society.  

Article 12 
Distribution of the amounts due to rightholders  

1. 

2. 

3. 

Member  States  shall  ensure  that  the  collecting  society  regularly  and  diligently 
distributes  and  pays  amounts  due  to  all  rightholders  it  represents.  The  collecting 
society shall carry out such distribution and payments no later than 12 months from 
the  end  of  the  financial  year  in  which  the  rights  revenue  was  collected,  unless 
objective  reasons  related  in  particular  to  reporting  by  users,  the  identification  of 
rights,  rightholders  or  to  the  matching  of  information  on  works  and  other  subject 
matter with rightholders prevent the collecting society from respecting this deadline. 
The  collecting  society  shall  carry  out  such  distribution  and  payments  accurately, 
ensuring equal treatment of all categories of rightholders. 

Where  the  amounts  due  to  rightholders  cannot  be  distributed,  after  five  years  from 
the end of the financial year in which the collection of the rights revenue occurred, 
and provided that the collecting society has taken all necessary measures to identify 
and  locate  the  rightholders,  the  collecting  society  shall  decide  on  the  use  of  the 
amounts concerned in accordance with Article 7(5)(b), without prejudice to the right 
of the rightholder to claim such amounts from the collecting society. 

For  the  purposes  of  paragraph  2,  measures  to  identify  and  locate  rightholders  shall 
include  verifying  membership  records  and  making  available  to  the  members  of  the 
collecting society as well as to the public a list of works and other subject matter for 
which one or more rightholders have not been identified or located.  

Chapter 3  

Management of rights on behalf of other collecting societies 

Article 13 
Rights managed under representation agreements 

Member  States  shall  ensure  that  a  collecting  society  does  not  discriminate  between  its 
members and any rightholders whose rights it manages under a representation agreement, in 

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particular  with  respect  to  applicable  tariffs,  management  fees,  and  the  conditions  for  the 
collection of the rights revenue and distribution of the amounts due to rightholders. 

Article 14 
Deductions and payments in representation agreements 

1. 

2. 

The collecting society shall not apply deductions, other than management fees, to the 
rights  revenue  derived  from  the  rights  it  manages  on  the  basis  of  a  representation 
agreement  with  another  collecting  society,  unless  the  other  collecting  society 
expressly consents to such deductions. 

The  collecting  society  shall  regularly,  diligently  and  accurately  distribute  and  pay 
amounts due to other collecting societies. 

Chapter 4 

Relations with users 

Article 15 
Licensing 

1. 

Collecting societies and users shall conduct negotiations for the licensing of rights in 
good  faith  including  the  provision  of  all  necessary  information  on  their  respective 
services.  

2. 

Licensing terms shall be based on objective criteria, in particular in relation to tariffs.  

Tariffs for exclusive rights shall reflect the economic value of the rights in trade and 
of the service provided by the collecting society. 

In the absence of any national law which establishes the amounts due to rightholders 
in  respect  of  a  right  to  remuneration  and  a  right  to  compensation,  the  collecting 
society  shall  base  its  own  determination  of  those  amounts  due,  on  the  economic 
value of those rights in trade. 

3. 

Collecting societies shall allow users to communicate by electronic means, including, 
when appropriate, for the purpose of reporting on the use of the licence.  

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Chapter 5 

Transparency and reporting 

Article 16 
Information provided to rightholders on the management of their rights 

Member States shall ensure that a collecting society makes available at least once a year, by 
electronic means, the following information to each rightholder it represents: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

any personal data which the rightholder has authorised the collecting society to use 
including to identify and locate the rightholder; 

the rights revenue collected on behalf of the rightholder; 

the amounts due to the rightholder per category of rights managed, and type of use, 
paid by the collecting society to the rightholder in the period concerned;  

the  period  during  which  the  uses  took  place  for  which  amounts  are  due  to  the 
rightholder; 

the deductions made for management fees in the period concerned; 

the  deductions  made  for  any  purpose  other  than  management  fees,  including  those 
that  may  be  required  by  national  law  for  the  provision  of  any  social,  cultural  or 
educational services in the period concerned; 

any amounts due to the rightholder which are outstanding for the period concerned; 

the  available  complaint  handling  and  dispute  resolution  procedures  pursuant  to 
Articles 34 and 36. 

Article 17 
Information provided to other collecting societies on the management of rights under 
representation agreements 

Member  States  shall  ensure  that  a  collecting  society  makes  the  following  information 
available, at least once a year by electronic means, to the collecting society on whose behalf it 
manages rights under a representation agreement for a particular period: 

(a) 

(b) 

(c) 

the amounts due to rightholders per category of rights managed, and per type of use 
paid  by  the  collecting  society  for  the  licensing  of  the  rights  it  manages  under  the 
representation agreement; 

the deductions made for management fees and for other purposes; 

information  on  the  licences  and  rights  revenue  pertaining  to  works  included  in  the 
repertoire covered by the representation agreement; 

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(d) 

resolutions of the general meeting. 

Article 18 
Information provided to rightholders, members, other collecting societies and users on 
request 

1. 

2. 

Member States shall ensure that a collecting society makes the following information 
available at the request of any rightholder whose rights it represents, any collecting 
society  on  whose  behalf  it  manages  rights under  a representation agreement or  any 
user, by electronic means, without undue delay: 

(a) 

standard licensing contracts and applicable tariffs; 

(b) 

the repertoire and rights it manages and the Member States covered; 

(c) 

a list of representation agreements it has entered into, including information on 
other collecting societies involved, the repertoire represented and the territorial 
scope covered by any such agreement. 

In addition, a collecting society shall make available at the request of any rightholder 
or  any  collecting  society,  any  information  on  works  for  which  one  or  more 
rightholders have not been identified including, where available, the title of the work, 
the name of the author, the name of the publisher and any other relevant information 
available which could be necessary to identify the rightholders.  

Article 19 
Disclosure of information to the public 

1. 

Member  States  shall  ensure  that  a  collecting  society  makes  public  the  following 
information: 

(a) 

the statute; 

(b) 

the membership terms and terms of termination of the authorisation to manage 
rights, if not included in the statute; 

(c) 

the list of the persons referred to in Article 9;  

(d) 

rules on distribution of the amounts due to rightholders; 

(e) 

rules on management fees; 

(f) 

rules  on  deductions  from  rights  revenue  for  purposes  other  than  management 
fees, including deductions for the purposes of social, cultural and educational 
services; 

(g) 

complaint handling and dispute resolution procedures available in accordance 
with Articles 34, 35 and 36. 

2. 

The information referred to in paragraph 1 shall be published on the website of the 
collecting society and shall remain available to the public on that website.  

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The  collecting  society  shall  keep  the  information  referred  to  in  paragraph  1  up  to 
date. 

Article 20 
Annual transparency report 

1. 

2. 

3. 

4. 

Member States shall ensure that, irrespective of its legal form under national law, a 
collecting society draws up and make public an annual transparency report, including 
a special report, for each financial year no later than six months following the end of 
the financial year. The annual transparency report shall be signed by all directors. 

The  annual  transparency  report  shall  be  published  on  the  website  of  the  collecting 
society and shall remain available to the public on that website for at least five years. 

The annual transparency report shall contain at least the information set out in Annex 
I. 

The  special  report  referred  to  in  paragraph  1  shall  be  on  the  use  of  the  amounts 
deducted  for  the  purposes  of  social,  cultural  and  educational  services  and  shall 
contain at least the information set out in point 3 of Annex I. 

The accounting information given in the annual transparency report shall be audited 
by  one  or  more  persons  empowered  by  law  to  audit  accounts  in  accordance  with 
Directive  2006/43/EC  of  the  European  Parliament  and  of  the  Council  of  17  May 
2006 on statutory audits of annual accounts and consolidated accounts22. 

The  auditor's  report,  including  any  qualifications,  shall  be  reproduced  in  full  in  the 
annual transparency report. 

For  the  purposes  of  this  paragraph,  accounting  information  shall  comprise  the 
financial  statements  referred  to  in  point  1  (a)  of  Annex  I  and  any  financial 
information referred to in points 1 (f) and (g) of Annex I and in point 2 of Annex I. 

5. 

Member States may decide that points 1 (a), (f) and (g) of Annex I shall not apply to 
a collecting society which on its balance sheet date does not exceed the limits of two 
of the three following criteria: 

(a) 

balance sheet total: EUR 350 000; 

(b)  net turnover: EUR 700 000; 

(c) 

average number of employees during the financial year: ten. 

22 

OJ L 157, 9.6.2006, p. 87. 

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TITLE III 

MULTI-TERRITORIAL LICENSING OF ONLINE RIGHTS IN MUSICAL WORKS BY 
COLLECTING SOCIETIES 

1. 

2. 

1 

Article 21 
Multi-territorial licensing in the internal market 

Member  States  shall  ensure  that  collecting  societies  established  in  their  territory 
comply with the requirements in this Title when granting multi-territorial licences for 
online rights in musical works. 

Member  States  shall  ensure  that  compliance  by  collecting  societies  with  those 
requirements can be effectively reviewed by the competent authorities referred to in 
Article 39. 

Article 22 
Capacity to process multi-territorial licences 

Member  States  shall  ensure  that  a  collecting  society  which  grants  multi-territorial 
licences  for  online  rights  in  musical  works  has  sufficient  capacity  to  process 
electronically,  in  an  efficient  and  transparent  manner,  the  data  needed  for  the 
administration  of  such  licences,  including  for  identifying  the  repertoire  and 
monitoring  its  use,  invoicing  users,  collecting  rights  revenue  and  distributing 
amounts due to rightholders. 

2. 

For the purpose of paragraph 1, a collecting society shall comply, at least, with the 
following conditions: 

(a) 

(b) 

(c) 

(d) 

(e) 

the ability to accurately identify the musical works, in whole or in part, which 
the collecting society is authorised to represent; 

the  ability,  to  accurately  identify  rights,  in  whole  or  in  part,  and  the 
rightholders  with  respect  to  each  of  the  Member  States  to  which  this 
authorisation  applies,  for  each  musical  work  or  share  thereof  which  the 
collecting society is authorised to represent; 

use of unique identifiers to identify rightholders and musical works, taking into 
account,  as  far  as  possible,  voluntary  industry  standards  and  practices 
developed at international or Union level; 

the taking into account, without undue delay, of any changes to the information 
described in point (a), 

the  ability  to  identify  and  resolve  in  a  timely  and  effective  manner 
inconsistencies  in  data  held  by  other  collecting  societies  granting  multi-
territorial licences in online rights in musical works. 

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1. 

2. 

1. 

2. 

1. 

2. 

Article 23 
Transparency of multi-territorial repertoire information 

A  collecting  society  which  grants  multi-territorial  licences  for  online  rights  in 
musical works shall provide to online music service providers, rightholders and other 
collecting  societies,  by  electronic  means,  up-to-date  information  allowing  the 
identification  of  the  online  music  repertoire  it  represents.  This  shall  include  the 
musical  works  represented,  the  rights  represented,  in  whole  or  in  part,  and  the 
Member States represented. 

The  collecting  society  may  take  reasonable  measures  to  protect  the  accuracy  and 
integrity  of  the  data,  to  control  its  re-use  and  to  protect  personal  data  and 
commercially sensitive information. 

Article 24 
Accuracy of multi-territorial repertoire information 

A  collecting  society  which  grants  multi-territorial  licences  for  online  rights  in 
musical  works  shall  have  procedures  in  place  to  enable  rightholders  and  other 
collecting societies to object to the contents of the data referred to in Article 22(2) or 
to  information  provided  under  Article  23,  where  such  rightholders  and  collecting 
societies, on the basis of reasonable evidence, believe that the data or the information 
are inaccurate in respect of their online rights in musical works. Where the claims are 
sufficiently  substantiated,  the  collecting  society  shall  ensure  that  the  data  or  the 
information are corrected without undue delay.  

The collecting society shall provide rightholders whose musical works are included 
in  its  own  music  repertoire  with  means  of  submitting  by  electronic  means 
information on their musical works or their rights in those works. When doing so, the 
collecting  society  and  the  rightholders  shall  take  into  account,  as  far  as  possible, 
industry  standards  or  practices  regarding  the  exchange  of  data  developed  at 
international  or  Union  level,  allowing  rightholders  to  specify  the  musical  work,  in 
whole  or  in  part,  the  online  rights,  in  whole  or  in  part,  and  the  Member  States,  for 
which they authorise the collecting society. 

Article 25 
Accurate and timely reporting and invoicing 

A collecting society shall monitor the use of online rights in musical works which it 
represents,  in  whole  or  in  part,  by  online  music  service  providers  to  which  it  has 
granted a multi-territorial licence for those rights. 

The  collecting  society  shall  offer  online  music  service  providers  the  possibility  of 
reporting the actual use of online rights in musical works by electronic means. The 
collecting society shall offer the use of a least one method of reporting which takes 
into  account  voluntary  industry  standards  or  practices  developed  at  international  or 
Union  level  for  the  electronic  exchange  of  such  data.  The  collecting  society  may 
refuse to accept reporting by the user in a proprietary format if the society allows for 
reporting using an industry standard for the electronic exchange of data. 

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3. 

4. 

5. 

1. 

2. 

3. 

4. 

The collecting society shall invoice the online music service provider by electronic 
means.  The  collecting  society  shall  offer  the  use  of  a  least  one  format  which  takes 
into  account  voluntary  industry  standards  or  practices  developed  at  international  or 
Union  level.  The  invoice  shall  identify  the  works  and  rights  which  are  licensed,  in 
whole  or  in  part,  on  the  basis  of  the  data  referred  to  in  Article  22(2),  and  the 
corresponding  actual  uses,  to  the  extent  this  is  possible  on  the  basis  of  the 
information provided by the user and the format used to provide that information. 

The collecting society shall invoice the online music service provider accurately and 
without  delay  after  the  actual  use  of  the  online  rights  in  that  musical  work  is 
reported, except where a delay is attributable to the online music service provider.  

The collecting society shall have adequate procedures in place for the online music 
service provider to challenge the accuracy of the invoice, including when the online 
music  service  provider  receives  invoices  from  one  or  more  collecting  societies  for 
the same online rights in the same musical work. 

Article 26 
Accurate and timely payment to rightholders 

Member  States  shall  ensure  that  a  collecting  society  which  grants  multi-territorial 
licences  for  online  rights  in  musical  works  distributes  amounts  due  to  rightholders 
accruing from such licences accurately and without delay after the actual use of the 
work is reported, except where any further delay is attributable to the online music 
service provider.  

The  collecting  society  shall  provide  at  least  the  following  information  to 
rightholders: 

(a) 

(b) 

the  period  during  which  the  uses  took  place  for  which  amounts  are  due  to 
rightholders and the Member States in which the uses took place; 

for  each  online  right  in  any  musical  work  the  rightholder  has  authorised  the 
collecting  society  to  represent  in  whole  or  in  part,  amounts  collected, 
deductions made and amounts distributed by the collecting society;  

(c) 

for each online music service provider, amounts collected for the rightholder, 
deductions made, and amounts distributed by the collecting society. 

Where  rightholders  terminate  their  authorisation  to  a  collecting  society  to  manage 
their online rights in musical works or withdraw their online rights in musical works, 
in whole or in part, from a collecting society, paragraphs 1 and 2 shall apply to multi-
territorial  licences  granted  before  the  termination  or  the  withdrawal  and  which 
continue to produce effect. 

Where  a  collecting  society  mandates  another  collecting  society  to  grant  multi-
territorial  licences  for  the  online  rights  in  musical  works  under  Articles  28  and  29, 
the mandated collecting society shall distribute the amounts referred to in paragraph 
1 and provide the information referred to in paragraph 2 to the mandating collecting 
society, which shall be responsible for its subsequent distribution and information to 
rightholders, unless they agree otherwise. 

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Article 27 
Outsourcing 

A  collecting  society  may  outsource  services  which  relate  to  the  multi-territorial  licences  it 
grants.  Such  outsourcing  shall  not  affect  the  liability  of  the  collecting  society  towards 
rightholders, online services providers or other collecting societies. 

1. 

2. 

3. 

1. 

2. 

3. 

Article 28 
Agreements between collecting societies for multi-territorial licensing 

Any  representation  agreement  between  collecting  societies  whereby  a  collecting 
society mandates another collecting society to grant multi-territorial licences for the 
online rights in musical works in its own music repertoire shall be of a non-exclusive 
nature.  The  mandated  collecting  society  shall  manage  those  online  rights  on  non-
discriminatory terms. 

The  mandating  collecting  society  shall  inform  its  members  of  the  duration  of  the 
agreement, the costs of the services provided by the other collecting society and any 
other significant terms of the agreement. 

The mandated collecting society shall inform the mandating society of the key terms 
on which its online rights are to be licensed, including the nature of the exploitation, 
all  provisions  which  relate  to  or  affect  the  licence  fee,  the  duration  of  the  licence, 
accounting periods and the territories covered. 

Article 29 
Obligation to represent another collecting society for multi-territorial licensing 

A collecting society which does not grant or offer to grant multi-territorial licences 
for the online rights in musical works in its own music repertoire can request another 
collecting  society  that  meets  the  requirements  of  this  Title  to  enter  into  a 
representation agreement to represent those rights in accordance with Article 28. 

The requested collecting society shall accept such a request if it is already granting or 
offering  to  grant  multi-territorial  licences  for  the  same  category  of  online  rights  in 
musical works in the repertoire of one or more other collecting societies.  

The management fee for the service provided by the requested collecting society to 
the requesting society shall not exceed the costs reasonably incurred by the requested 
collecting society in managing the repertoire of the requesting collecting society and 
a reasonable profit margin.  

The  requesting  collecting  society  shall  make  available  to  the  requested  collecting 
society  the  information  on  its  own  music  repertoire  required  for  the  provision  of 
multi-territorial  licences  for  online  rights  in  musical  works.  Where  information  is 
insufficient or provided in a form that does not allow the requested collecting society 
to  meet  the  requirements  of  this  Title,  the  requested  collecting  society  shall  be 
entitled to charge for the reasonable costs incurred in meeting such requirements or 
to exclude those works for which information is insufficient or cannot be used. 

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Article 30 
Access to multi-territorial licensing 

Member  States  shall  ensure  that  where  a  collecting  society  does  not  grant  or  offer  to  grant 
multi-territorial licences in online rights in musical works or does not allow another collecting 
society to represent those rights for such purpose by one year after the transposition date of 
this  Directive,  rightholders  who  have  authorised  that  collecting  society  to  represent  their 
online  rights  in  musical  works  can  grant  multi-territorial  licences  in  their  online  rights  in 
musical works themselves or through any collecting society complying with the provisions of 
this  Title  or  any  other  party  they  authorise.  The  collecting  society  which  does  not  grant  or 
offer to grant multi-territorial licences shall continue to grant or offer to grant licences for the 
online rights in musical works of such rightholders for their use in the territory of the Member 
State  where  the  collecting  society  is  established,  unless  the  rightholders  terminate  their 
authorisation to manage them.  

Article 31 
Multi-territorial licensing by subsidiaries of collecting societies 

Articles 18(1)(a), 18(1)(c), 22, 23, 24, 25, 26, 27, 32 and 36 shall also apply to entities owned, 
in whole or in part, by a collecting society and which offer or grant multi-territorial licences 
for online rights in musical works. 

Article 32 
Licensing terms in online services 

A  collecting  society  providing  multi-territorial  licences  for  online  rights  in  musical  works 
shall not be required to use as a precedent for other types of services licensing terms agreed 
with an online music service provider, when the online music service provider is providing a 
new type of service which has been available to the public for less than three years. 

Article 33  
Derogation for online music rights required for radio and television programmes 

The requirements under this Title shall not apply to collecting societies which grant, on the 
basis of the voluntary aggregation of the required rights, in compliance with the competition 
rules  under  Articles  101  and  102  TFEU,  a  multi-territorial  licence  for  the  online  rights  in 
musical works required by a broadcaster to communicate or make available to the public its 
radio or television programmes simultaneously with or after their initial broadcast as well as 
any online material produced by the broadcaster which is ancillary to the initial broadcast of 
its radio or television programme. 

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TITLE IV 

ENFORCEMENT MEASURES 

1. 

2. 

3. 

1. 

2. 

1. 

Article 34 
Dispute resolution for members and rightholders 

Member States shall ensure that collecting societies make available to their members 
and rightholders effective and timely procedures for dealing with complaints and for 
resolving  disputes  in  particular  in  relation  to  authorisation  to  manage  rights  and 
termination  or  withdrawal  of  rights,  membership  terms,  the  collection  of  amounts 
due to rightholders, deductions and distributions.  

Collecting  societies  shall  respond  in  writing  to  complaints  by  members  or 
rightholders. Where the collecting society refuses the complaint, it shall give reasons. 

Parties shall not be prevented from asserting and defending their rights by bringing 
an action before a court. 

Article 35 
Dispute resolution for users 

Member  States  shall  ensure  that  disputes  between  collecting  societies  and  users 
concerning  existing  and  proposed  licensing  conditions,  tariffs,  and  any  refusal  to 
grant a licence can be submitted to a court, and if appropriate, to an independent and 
impartial dispute resolution body.  

Where  the  obligation  set  out  in  paragraph  1  is  implemented  by  recourse  to  an 
independent and impartial dispute resolution body, this shall not prevent the parties 
from asserting and defending their rights by bringing an action before a court. 

Article 36 
Alternative dispute resolution 

Member States shall ensure, for the purposes of Title III, that the following disputes 
of  a  collecting  society  which  grants  or  offers  to  grant  multi-territorial  licences  in 
online  rights  in  musical  works  can  be  submitted  to  an  independent  and  impartial 
alternative dispute resolution bodies:  

(a) 

disputes  with  an  actual  or  potential  online  music  service  provider  on  the 
application of Articles 22, 23 and 25; 

(b)  disputes with one or more rightholders on the application of Articles 22, 23, 24, 

25, 26, 28, 29 and 30; 

(c) 

disputes  with  another  collecting  society  on  the  application  of  Articles  24,  25, 
26, 28 and 29. 

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2. 

3. 

1. 

2. 

1. 

2. 

Collecting societies shall inform the relevant parties of the availability of alternative 
dispute resolution procedures as referred to in paragraph 1. 

The  procedures  referred  to  in  paragraphs  1  to  2  shall  not  prevent  the  parties  from 
asserting and defending their rights by bringing an action before a court. 

Article 37 
Complaints 

Member  States  shall  ensure  that  procedures  are  set  up  for  members  of  a  collecting 
society,  rightholders,  users  and  other  interested  parties  to  submit  complaints  to  the 
competent  authorities  with  regard  to  the  activities  of  collecting  societies  which  are 
covered by this Directive.  

Member  States  shall  take  all  the  necessary  measures  to  ensure  that  the  complaints 
procedures referred to in paragraph 1 are administered by the competent authorities 
empowered  to  ensure  compliance  with  the  provisions  of  national  law  adopted 
pursuant to the requirements laid down in this Directive.  

Article 38 
Sanctions or measures  

Member  States  shall  provide  that  their  respective  competent  authorities  may  take 
appropriate  administrative  sanctions  and  measures  where  the  provisions  of  the 
national  provisions  adopted  in  the  implementation  of  this  Directive  have  not  been 
complied  with,  and  shall  ensure  that  they  are  applied.  The  sanctions  and  measures 
shall be effective, proportionate and dissuasive. 

Member States shall notify the Commission of the rules referred to in paragraph 1 by 
[date] and shall notify it without delay of any subsequent amendment affecting them.  

Article 39 
Competent authorities  

Member  States  shall  notify  the  Commission  of  the  competent  authorities  referred  to  in 
Articles 21, 37, 38 and 40 by the [date].  

The Commission shall make that information available on its website. 

Article 40 
Compliance with the provisions on multi-territorial licensing  

1. 

Member  States  shall  ensure  that  the  competent  authorities  referred  to  in  Article  39 
continuously monitor the compliance with the requirements laid down in Title III of 
this  Directive  by  collecting  societies  established  in  their  territory  when  granting 
multi-territorial licences for online rights in musical works.  

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2. 

3. 

4. 

5. 

The Commission shall foster regular exchange of information between the competent 
authorities of the Member States and between those authorities and the Commission 
on the situation and development of multi-territorial licensing. 

The  Commission  shall  conduct  regular  consultations  with  representatives  of 
rightholders,  collecting  societies,  users,  consumers  and  other  interested  parties  on 
their experience with the application of the provisions of Title III of this Directive. 
The  Commission  shall  provide  competent  authorities  with  all  relevant  information 
deriving from these consultations, in the framework set out in paragraph 2. 

Member States shall ensure that, at the latest, [30 months after the entry into force of 
this Directive], their competent authorities provide the Commission with a report on 
the  situation  and  development  of  multi-territorial  licensing  in  their  territory.  The 
report shall include information, in particular, on the availability of multi-territorial 
licences  in  the  relevant  Member  State,  the  compliance  of  collecting  societies  with 
Title  III  of  this  Directive  and  the  evaluation  of  the  service  by  users  and  non-
rightholders  and  other 
governmental  organisations 
interested parties.  

representing  consumers, 

On  the  basis  of  the  reports  under  paragraph  4  and  the  information  gathered  under 
paragraphs 2 and 3, the Commission shall assess the application of Title III of  this 
Directive. If necessary, and based on a specific report as appropriate, it will consider 
further steps to address the identified problems, if any. The assessment shall cover, in 
particular, the following:  

(a) 

the number of collecting societies meeting the requirements in Title III; 

(b) 

(c) 

the  number  of  representation  agreements  between  collecting  societies  under 
Articles 28 and 29; 

the  proportion  of  repertoire  in  the  Member  States  which  is  available  for 
licensing on a multi-territorial basis. 

TITLE V 

REPORTING AND FINAL PROVISIONS 

Article 41 
Report 

By [5 years after the end of the transposition period (date)], the Commission shall assess the 
application of this Directive and report to the European Parliament and to the Council on the 
application of this Directive, including its impact on the development of cross-border services 
and on cultural diversity, and, if necessary, on the need to review it. The Commission shall 
submit its report accompanied, if appropriate, by a legislative proposal. 

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Article 42 
Transposition 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply with this Directive by [12 months after the entry into 
force  of  the  Directive]  at  the  latest.  They  shall  forthwith  communicate  to  the 
Commission the text of those provisions. 

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

Member States shall communicate to the Commission the text of the main provisions 
of national law which they adopt in the field covered by this Directive. 

Article 43 
Entry into force 

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 44 
Addressees 

This Directive is addressed to the Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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1. 

Information  to  be  provided  in  the  annual  transparency  report  referred  to  in  Article 
20(2): 

Annex I 

(a) 

financial  statements  comprising  a  balance-sheet  or  a  statement  of  assets  and 
liabilities, an income and expenditure account for the financial year and a cash 
flow statement; 

(b) 

a report on the activities in the financial year; 

(c) 

a description of the legal and governance structure of the collecting society; 

(d) 

information on any entities in which the collecting society holds shares; 

(e) 

information on the total amount of remuneration paid to the persons referred in 
Article 9 in the previous year, and on other benefits granted to them; 

(f) 

the financial information referred to in point 2;  

(g) 

a special report on the use of the amounts deducted for the purposes of social, 
cultural and educational services. 

2. 

Financial information to be provided in the annual transparency report: 

(a)  Financial  information  on  rights  revenue,  per  category  of  rights  managed  and 

per type of use (e.g. broadcasting, online, public performance). 

(b)  Financial  information  on  the  cost  of  management  services  and  other  services 
provided  by  the  collecting  society  to  rightholders,  with  a  comprehensive 
description of at least the following items: 

(i) 

all operating and financial costs, with a breakdown per category of rights 
managed and an explanation of the method used to allocate indirect costs;  

(ii)  operating  and  financial  costs,  with  a  breakdown  per  category  of  rights 

managed, only with regard to the services for the management of rights; 

(iii)  operating  and  financial  costs  with  regard  to  services  other  than  the 
management of rights, including social, cultural and educational services; 

(iv)  resources used to cover costs; 

(v)  deductions  made  to  rights  revenues,  with  a  breakdown  per  category  of 
rights  managed  and  per  type  of  use  and  the  purpose  of  the  deduction, 
such as costs related to the management of rights or to social, cultural or 
educational services; 

(vi) 

the  percentages  that  the  cost  of  the  management  services  and  other 
services  provided  by  the  collecting  society  to  rightholders  represents 
compared  to  the  rights  revenues  in  the  relevant  financial  year,  per 
category of rights managed. 

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(c)  Financial  information  on  amounts  due  to  rightholders  with  a  comprehensive 

description of at least the following items:  

(i) 

total amount attributed to rightholders with a breakdown per category of 
rights managed and type of use;  

(ii) 

total  amount  paid  to  rightholders,  with  a  breakdown  per  category  of 
rights managed and type of use; 

(iii)  frequency of payments, with a breakdown per category of rights managed 

and per type of use; 

(iv) 

total  amount  collected  but  not  yet  attributed  to  rightholders,  with  a 
breakdown per category of rights managed and type of use and indicating 
the financial year in which these amounts were collected;  

(v) 

total  amount  attributed  to  but  not  yet  distributed  to  rightholders,  with  a 
breakdown per category of rights managed and type of use and indicating 
the financial year in which these amounts were collected; 

(vi)  where  a  collecting  society  has  not  carried  out  the  distribution  and 
payments within the deadline set out in Article 12(1), the reasons for the 
delay. 

(d) 

Information  on  the  relationships  with  other  collecting  societies  with  a 
description of at least the following items:  

(i) 

financial  flows,  amounts  received  from  other  collecting  societies  and 
amounts paid to other collecting societies, with a breakdown per category 
of rights and type of use and per collecting society; 

(ii)  management fees for and other deductions from the revenue due to other 
collecting  societies,  with  a  breakdown  per  category  of  rights  and  per 
collecting society; 

(iv)  management  fees  for  and  other  deductions  from  the  amounts  paid  by 
other  collecting  societies,  with  a  breakdown  per  category  of  rights  and 
per collecting society; 

(v) 

amount  distributed  to  rightholders  originating  from  other  collecting 
societies,  with  a  breakdown  per  category  of  rights  and  per  collecting 
society. 

3. 

Information to be provided in the special report referred to in Article 20(3): 

(a) 

the  amounts  collected  for  the  purposes  of  social,  cultural  and  educational 
services in the financial year, with a breakdown per category of rights managed 
and per type of use; 

(b) 

the  explanation  of  the  use  of  those  amounts,  with  a  breakdown  per  type  of 
purpose. 

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Annex II 

EXPLANATORY DOCUMENTS 

In accordance with the Joint Political Declaration of Member States and the Commission on 
explanatory  documents  of  28  September  2011,  Member  States  have  undertaken  to 
accompany,  in  justified  cases,  the  notification  of  their  transposition  measures  with  one  or 
more  documents  explaining  the  relationship  between  the  components  of  a  directive  and  the 
corresponding parts of national transposition instruments. 

With regard to this Directive, the Commission considers the transmission of such documents 
to be justified for the following reasons: 

Complexity of the Directive and of the sector concerned 

Collective  management  of  copyright  and  related  rights  is  a  complex  issue.  It  affects  the 
management of rights for online use but also for more traditional offline uses. It concerns the 
rights  of  authors,  but  also  of  performers,  publishers,  producers  and  broadcasters.  Different 
types  of  collecting  societies  are  involved,  from  the  large  collecting  societies  managing 
authors' rights to the smaller ones collecting the remuneration linked to the reprography or to 
the resale right. Different types of stakeholders are involved: not only the rightholders but also 
the commercial users who obtain the licences from collecting societies. 

While there is legislation at European level on copyright and related rights, it is the first time 
that collective management is directly addressed by EU legislation. The comprehensive legal 
framework  proposed  by  the  Directive  will  result  in  substantial  changes  for  most  of  the 
national laws as regards the regulation of collecting societies.  

Moreover the Title of the directive concerning the multi-territorial licensing of authors' rights 
in  musical  works  for  online  uses  is  an  absolute  novelty  from  a  regulatory  perspective.  No 
Member State has legislation on this type of licences in place.  

Furthermore,  the  rules  of  the  Directive  will  also  affect  national  law  regarding  dispute 
resolution.  

The  setting  up  of  this  new  legal  framework  will  require  a  structured  approach  during  the 
transposition  supervision. Given  the  lack of  national  legislative or regulatory experience for 
certain  parts  of  the  Directive,  it  is  of  high  importance  that  the  Commission  receives 
transposition  documents  clarifying  how  the  Member  States  have  given  effect  to  the  new 
provisions.  In  the  absence  of  well-structured  explanatory  documents,  the  capacity  for  the 
Commission to oversee the transposition would be significantly undermined.  

Consistency and interrelation with other initiatives 

The directive remains a "minimum harmonisation" legal instrument and Member States may 
impose stricter and/or more detailed requirements on collecting societies than those foreseen 
in the Directive. It is important that the Commission be in a position to compare the resulting 
situations in the various Member States and thus properly carry out its task of overseeing the 
application of Union law. Moreover, a review clause is included in the directive and, in order 
to be able to collect all relevant information on the functioning of those rules, the Commission 
will need to be able to monitor the implementation of the directive from the outset. 

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Collecting  societies  must  comply  with  the  national  requirements  pursuant  to  the  Services 
Directive  (2006/123/EC).  They  should  be  free  to  provide  their  services  across  borders  to 
represent rightholders resident or established in other Member States or grant licences to users 
resident or established in other Member States.  

They must also respect the competition rules of the Treaty.  

Therefore,  in  order  to  ensure  that  national  rules  transposing  the  proposed  directive  are 
consistent  with  the  Services  Directive  and  the  competition  rules,  it  is  particularly  important 
that  the  Commission  can  keep  an  overview  and  undertake  an  appropriate  review  of  the 
national transposition, on the basis of the necessary explanatory documents.  

Administrative burden  

The  administrative  burden  of  requesting  explanatory  documents  from  Member  States 
regarding the Directive is not disproportionate considering the objectives of the Directive and 
the  novelty  of  its  subject  matter.  It  is  furthermore  necessary  for  the  Commission  to  be  in  a 
position to carry out its task of overseeing the application of Union law. 

On  the  basis  of  the  above,  the  Commission  believes  that  the  requirement  to  provide 
explanatory documents in the case of the proposed Directive is proportionate and does not go 
beyond  what  is  necessary  to  achieve  the  objective  to  carry  out  efficiently  the  task  of 
overseeing accurate transposition. 

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