Business urges Brussels to protect cultural diversity

HELENA SPONGENBERG

11.07.2007 @ 17:48 CET

EUOBSERVER / CREATIVE RIGHTS – Some of Europe's biggest media groups and telecom companies have asked the European Commission to reject an offer from most of the EU's national royalty-collecting societies to settle an anti-trust case.

In a letter to commission president Jose Manuel Barroso and EU anti-trust commissioner Neelie Kroes, the 27 companies – such as RTL, Deutsche Telekom and France Telecom – warn that their businesses and the bloc's "cultural diversity" will suffer if Brussels accepts the deal.

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"We urge you to not accept the settlement proposals which…would undermine the current system of licensing the global music repertoire as a single package and lead to a costly, inefficient and fragmented licensing system for music rights," said the letter seen by EUobserver.

"Such fragmentation would result in regional and national linguistic repertoires either not being played or paid. Cultural diversity would suffer immediately and directly," the letter, sent on 10 July, continues.

Assessment of offer

The commission is currently assessing whether a commitment from 18 European collecting societies - the bodies that levy copyright fees and pass them on to artists and authors - and CISAC - the International Confederation of Societies of Authors and Composers – is compatible with EU market law.

EU internal market Commissioner Charlie McCreevy said in 2005 that the music industry's growth in Europe is hampered by having to negotiate rights country by country.

The EU executive wants more competition between the societies, especially for administrative services, and Mr McCreevy recommended that broadcasters should be able to get pan-European licenses and that artists could choose which collecting society should represent them, regardless of where they reside.

Today, membership restrictions oblige authors and composers only to go to one national collecting society to represent their rights, while territorial restrictions force commercial users to obtain a copyright licence on a country-by-country basis via the local collecting society instead of one for the whole internal market in the EU.

Under the new deal, the 18 collecting societies would lift the membership restrictions and grant multi-territorial licenses for performing rights over the internet, satellite and cable.

A final commission decision is expected after the summer break and it can, under EU rules, reject the settlement offer and impose a fine for restrictive business practices, which may be as much as 10 percent of annual revenue.

However, the media and telecom groups fear that the commitment would also lead to the disappearance of many smaller authors' rights societies and would therefore eliminate important competitors in the market for rights licensing - "this is hardly an objective of competition proceedings," claimed the groups in their letter.

Broadcasters are mass users of music and efficient clearance of rights is vital in order to offer quality and competitive programming.

Parliament resolution

In the meantime, a group of 21 small- and medium-sized collecting societies from across the Europe have made a joint statement, calling the commission policy "anti-competitive, inappropriate and unacceptable".

They believe that the commission's 2005 recommendation "will lead…to an over-centralisation of market powers and repertoires at European level…which will unduly restrict the choices available to users and rights-holders, and as a consequence, severely undermine cultural diversity in Europe."

The collecting societies also requested the EU executive to take account of a European Parliament call in March for the commission to make binding rules to regulate the EU's online music market and to protect the bloc's cultural diversity.