The General Court (Sixth Chamber) of the European Union has just given its keenly-awaited judgment in Case T‑442/08 International Confederation of Societies of Authors and Composers (CISAC), supported by European Broadcasting Union (EBU) v European Commission. According to the Curia media release:
The General Court partially annuls the Commission decision finding anti-competitive
conduct on the part of copyright collecting societies
The International Confederation of Societies of Authors and Composers (CISAC) is a non-profit
non-governmental organisation which represents, in over a hundred countries, collecting societies
managing copyright relating to, inter alia, musical works.
The collecting societies acquire the management of those rights either by direct transfer from the
authors or by transmission from another collecting society managing the same categories of rights
in another country. They grant exploitation licences to commercial users, such as broadcasting
undertakings or organisers of live shows. The prices of those licences are the source of the
royalties that the authors receive, after the management expenses of those collecting societies
have been deducted.
In 1936, CISAC drew up a model contract for reciprocal representation agreements between its
members. That contract serves as a non-binding model for reciprocal representation agreements
concluded between its members for the purposes of conferring licences covering public
performance rights of musical works. Each collecting society agrees, reciprocally, to confer the
rights over its repertoire to all of the other collecting societies for the purposes of their exploitation
in the respective territories of those collecting societies. Because of the network created by all of
those reciprocal representation agreements, each collecting society can propose a worldwide
portfolio of musical works to commercial users, but only for use in its own territory.
In 2000, RTL lodged a complaint with the Commission against a member of CISAC concerning its
refusal to grant it a Community-wide licence for its music broadcasting activities. In 2003, Music
Choice Europe, which provides radio and television broadcasting services on the internet, lodged a
second complaint against CISAC concerning its model contract.
By its decision of 16 July 20081, the Commission prohibited 24 European collecting societies from
restricting competition, in particular by limiting their ability to offer their services to authors and
commercial users outside their domestic territory. The Commission decision, which concerns solely
the exploitation of copyright via the internet, satellite and cable retransmission, does not call into
question the very existence of reciprocal representation agreements. It does, however, prohibit:
- membership clauses: clauses in the model contract which restrict authors’ ability to affiliate freely
to the collecting society of their choice;
- exclusivity clauses: clauses in the model contract which have the effect of providing all collecting
societies, in the territory in which they are established, with absolute territorial protection vis-à-vis
other collecting societies as regards the grant of licences to commercial users;
- a concerted practice which was found to exist between the collecting societies and by which each
collecting society limits, in the reciprocal representation agreements, the right to grant licences
relating to its repertoire in the territory of another collecting society party to the agreement.
The Commission did not impose fines on the collecting societies but did require that they remove
the clauses in question from the model contract and bring an end to the concerted practice.
Most of the collecting societies concerned and CISAC brought an action before the General Court
of the European Union against the Commission’s decision.
By today’s judgments, the General Court annuls, for CISAC and for 20 of the collecting
societies concerned, the Commission’s decision in respect of the finding of the concerted
practice [nb At the end of the media release, but not reproduced here, is a list of the outcomes of all 22 actions consolidated in this action, together with a 'scorecard' indicating the outcome. In that respect, the General Court considers that the Commission has not provided
sufficient evidence. The Commission, first, did not have documents proving the existence of
concertation between the collecting societies as regards the territorial scope of the mandates
which they grant each other and, secondly, did not render implausible the applicants’ explanation
that the parallel conduct of the collecting societies at issue was not the result of concertation, but
rather of the need to fight effectively against the unauthorised use of musical works.
The General Court rejected the applications in so far as they sought the annulment of the
Commission decision in respect of the membership and exclusivity clauses.
As regards the Stim case, the General Court rejected all of the arguments put forward by
that collecting society, which had not raised in sufficient time the issue of the lack of proof of the
concerted practice.