Another collecting society has competition law concerns…

17.04.2014

Further to recent ramblings on the ‘Czech Spa’ case, I thought I’d quickly mention another collecting society case. As you’ll remember, collecting societies operate in two-sided markets, providing services to both: (i) the copyright holder or author (i.e. upstream), and (ii) the end user of the repertoire (i.e. downstream). Whereas the Czech spa case concerned services to the latter, the recentBuma/Stemra case in the Netherlands concerned services to the former.
The Dutch authority had investigated the possible abuse by the national collecting society, Buma/Stemra. Dutch authors rely on Buma/Stemra for the collection of royalties from the exploitation of their work on TV and radio. However, authors don’t always necessarily need the collecting society’s other services, for example for services for music played over the internet where online exploitation is easier for rights holders to process themselves. Buma/Stemra had only offered an all-in-one package covering all formats – this gave rights holders little choice when deciding which rights to transfer across to the collecting society and how they sought remuneration for their songs or lyrics online.
To conclude the investigation, Buma/Stemra offered commitments promising to give rights holders more choice about which rights they transfer to it. An ‘opt-out’ system will be created, introducing greater flexibility for authors to retain their rights in different categories. The Dutch authority has welcomed the commitments (see here) and expects them to result in further online innovation, to the benefit of both rights holders and music fans.
It is fascinating to see competition law used as a tool to encourage innovation in the traditional collecting society business model. With a lot of the recent focus being on collecting societies’ services to rights users, it’s interesting to see that rights holders are also keen to wield the competition law sword. I suspect that this isn’t the end of the story across the EU…