Ministère public v Jean-Louis Tournier.
Date: 1989-07-13
12 The problems, in relation to the requirements of the Treaty, involved in the observance of copyright in musical works made available to the public through their performance are not the same as those which arise where the act of making a work available to the public is inseparable from the circulation of the physical medium on which it is recorded . In the former case the copyright owner and the persons claiming through him have a legitimate interest in calculating the fees due in respect of the authorization to present the work on the basis of the actual or probable number of performances, as the Court held in Case 62/79 Coditel v Ciné Vog Films (( 1980 )) ECR 881 .
13 It is true that the present case raises the specific question of the distinction between the conditions applicable to those two situations, in so far as sound-recordings are products covered by the provisions on the free movement of goods contained in Article 30 et seq . of the Treaty but are also capable of being used for public performance of the musical work in question . In such circumstances, the requirements relating to the free movement of goods and the freedom to provide services and those deriving from the observance of copyright must be reconciled in such a way that the copyright owners, or the societies empowered to act as their agents, may invoke their exclusive rights in order to require the payment of royalties for music played in public by means of a sound-recording, even though the marketing of that recording cannot give rise to the charging of any royalty in the country where the music is played in public .
17 With regard to the first point, it is apparent from the documents before the Court that a "reciprocal representation contract", as referred to by the national court, must be taken to mean a contract between two national copyright-management societies concerned with musical works whereby the societies give each other the right to grant, within the territory for which they are responsible, the requisite authorizations for any public performance of copyrighted musical works of members of the other society and to subject those authorizations to certain conditions, in conformity with the laws applicable in the territory in question . Those conditions include in particular the payment of royalties, which are collected for the other society by the society which it has empowered to act as its agent . The contract specifies that each society is to apply, with respect to works in the other society' s repertoire, the same scales, methods and means of collection and distribution of royalties as those which it applies for works in its own repertoire .
19 Consequently, it is apparent that reciprocal representation contracts between copyright-management societies have a twofold purpose : first, they are intended to make all protected musical works, whatever their origin, subject to the same conditions for all users in the same Member State, in accordance with the principle laid down in the international provisions; secondly, they enable copyright-management societies to rely, for the protection of their repertoires in another State, on the organization established by the copyright-management society operating there, without being obliged to add to that organization their own network of contracts with users and their own local monitoring arrangements .
31 Copyright-management societies pursue a legitimate aim when they endeavour to safeguard the rights and interests of their members vis-à-vis the users of recorded music . The contracts concluded with users for that purpose cannot be regarded as restrictive of competition for the purposes of Article 85 unless the contested practice exceeds the limits of what is necessary for the attainment of that aim . Those limits may be exceeded if direct access to a sub-division of a repertoire, as advocated by the discothèque operators, could fully safeguard the interests of authors, composers and publishers of music without thereby increasing the costs of managing contracts and monitoring the use of protected musical works .
32 The result of that appraisal may differ from one Member State to another . It is for the national court to make the necessary findings of fact in each individual case .
38 When an undertaking holding a dominant position imposes scales of fees for its services which are appreciably higher than those charged in other Member States and where a comparison of the fee levels has been made on a consistent basis, that difference must be regarded as indicative of an abuse of a dominant position . In such a case it is for the undertaking in question to justify the difference by reference to objective dissimilarities between the situation in the Member State concerned and the situation prevailing in all the other Member States .
42 That argument cannot be accepted . It is apparent from the documents before the Court that one of the most marked differences between the copyright-management societies in the various Member States lies in the level of operating expenses . Where - as appears to be the case here, according to the record of the proceedings before the national court - the staff of a management society is much larger than that of its counterparts in other Member States and, moreover, the proportion of receipts taken up by collection, administration and distribution expenses rather than by payments to copyright holders is considerably higher, the possibility cannot be ruled out that it is precisely the lack of competition on the market in question that accounts for the heavy burden of administration and hence the high level of royalties .
45 Another problem raised was whether the fact that a blanket or flat-rate royalty was charged should be taken into account in deciding whether or not the amount of royalty was fair for the purposes of Article 86 . In that regard reference need merely be made to the considerations set out above in reply to the fourth question . The fact that a flat-rate royalty is charged can only be criticized by reference to the prohibition contained in Article 86 if other methods might be capable of attaining the same legitimate aim, namely the protection of the interests of authors, composers and publishers of music, without thereby increasing the costs of managing contracts and monitoring the use of protected musical works .
46 By virtue of the foregoing, it must be stated in reply to the first and third questions that Article 86 of the Treaty must be interpreted as meaning that a national copyright-management society holding a dominant position in a substantial part of the common market imposes unfair trading conditions where the royalties which it charges to discothèques are appreciably higher than those charged in other Member States, the rates being compared on a consistent basis . That would not be the case if the copyright-management society in question were able to justify such a difference by reference to objective and relevant dissimilarities between copyright management in the Member State concerned and copyright management in the other Member States .