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16th Jun 2019

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More calls for reform in EU collective rights management

  • How will collective rights be managed in the future? (Photo: Helena Spongenberg)

Europe's collective rights management organisations – also called collecting societies – are facing more calls for reform in an attempt to streamline European rights management and increase competitiveness in creative innovation across the bloc.

"European collecting societies must come up with a more economical and flexible alternative system of collective rights management if they want to survive," says former head of the department of competition in the European Commission, John Temple Lang.

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Mr Temple Lang, now a partner at a Brussels law firm, told EUobserver at a conference on ‘intellectual property and the information society in the EU' on Friday (26 February) that while rights owners, rights managers and users are looking for a solution, big users such as Apple go directly to the large music publishers – such as EMI and Universal Music Group – circumventing the collecting societies when buying licenses for online international sale.

"That means that the collecting societies are being cut out all together. That is rather serious, not only for the collecting societies but also for all of the small rights holders whose works are not part of the repertoire of the big music publishers," he warned.

"All [collecting societies] can really do – but they have to do it quickly – is to provide an effective satisfactory and reasonable cheap alternative," Mr Temple Lang said.

Director of the German Producers' Alliance, Mathias Schwarz, believes the licensing system is too slow.

"The tariffs asked for European licenses often seem economically unreasonable, and it's not only the users that want to go directly to the rights owners, but the rights owners themselves seems to mistrust their collecting societies and want to handle it themselves because they feel they can spare the service fee or the management costs and get a better deal if they deal with it directly," he said at the IP conference.

However, Peter Weber from the German Television ZDF and head of the European Broadcasting Union's legal and public affairs committee, underlined the importance of collective management from the perspective of broadcasters.

"Collective management is indispensable because we can't go individually to right holders for a lot of mass use. On the other hand we of course acknowledge that there is a need for transparency and supervision."

Mr Weber added that it is time for a "European legal framework on the conditions under which collecting societies are administering the rights".

The European Commission is expected to come out with just such a framework directive on EU collecting societies later this year.

Last month, the head of the copyright unit in the EU executive's internal market and services department, Tilman Lueder, stressed not only the need for a more transparent collective rights management system but also the need to explain the system better to the consumers - the EU citizens.

In Spain – the current holder of the EU's rotating presidency – the National Competition Commission issued in January a report on the management of intellectual property rights by collecting societies in the Iberian country and concluded that they lack of transparency and that their monopolistic position eases the distortion of effective competition.

Speaking at the conference, former Spanish MEP and now head of the European Foundation for the Information Society, Enrique Barón Crespo criticised the report for having a "certain aggressiveness towards the collecting societies."

Changing times

Organised by the Academy of European Law (ERA), the conference was to take a look at how the European Union through its policies, legislation and case law is tackling current and emerging intellectual property rights issues in competition law, collective management of copyright and privacy rights.

In the last decade, there has been a great interest in the overhaul of the music license granting system in the European Union, with the commission seeking to create a harmonised legal framework on copyright and related rights within Europe's internal market.

The digital era and the rapid improvements of information and communication technologies on the internet have pushed the need for the revamping of the European rights management system.

A working and effective relationship between the copyright owners, the collective rights managers and the commercial users of copyright is fundamental for the development of artistic creativity, which in turn is important for innovation and development in the European economy, argues the European executive.

However, the process is wedged between the interests of rights holders – the artists – and the consumers as well as the big market players such as the recording industry, the music providers and the rights managers - being as much a commercial battle as it is a policy issue.

The commission has argued that streamlining the royalties system and simplifying the EU-wide licensing models would improve the conditions for all in the music industry and maximise profits.

However, authors and composers fear such a move could have grave cultural consequences for Europe, arguing that it will eventually lead to a few multinational societies that will only concentrate on acts that make money.

The commission plans to hold a public hearing next month on the governance of collective rights management in the EU, to explore what efforts might be needed to further develop collective management of copyright and neighbouring rights in the EU.

In the meantime, the new EU internal market commissioner, Michel Barnier, is looking at the collecting societies file and will decide on the way forward for the new commission in the coming months.

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