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Competition and Intellectual Property Protection in the Market for the Provision of Multi-Territorial Licensing of Online Rights in Musical Works – Lights and Shadows of the New European Directive 2014/26/EU
Abstract
The Directive of February 2014 regarding the collective management of copyright and the multi-territorial licensing of online rights in musical works is part of a broader framework of initiatives that the European Commission has been promoting in the past years, acting both as competition guarantor and as EU legislator, to facilitate the emergence of a European single market for the exploitation of musical works in digital format. This study will analyze the framework put forward by the new Directive 2014/26/EU with regard to the management of online rights in musical works by collective management organizations (CMOs) to see whether the EU legislators have succeeded in introducing a set of rules capable of fostering the emergence of a competitive EU-wide market for the provision of multi-territorial licences. As will be shown, not only several provisions contained in the new Directive offer reasons for concern as regards the protection of both competition and intellectual property rights in the new market for multi-territorial licences, but also recent judgments by both the General Court and the Court of Justice of the European Union (the CISAC and OSA judgments respectively) seem to go against the spirit of the Directive. © 2015, Max Planck Institute for Innovation and Competition, Munich.
... [22] The Recommendation 2005 envisaged multi-territorial licensing by a single CMO rather than by an individual licensor [23]. As was confirmed 10 years after the Recommendation 2005's publication, major Anglo-American music publishers (referred to also as 'option-3-publishers') withdrew mechanical rights related to their repertoire from CMOs and license these rights directly to users. ...
Online exploitation of musical works allows consumers in the European Union (EU) to enjoy tens of millions of musical works from a place and at a time of their choice. While the Title III of the EU Collective Rights Management (CRM) Directive contributed to reshaping the EU multi-territorial online music licensing market, it did not adequately facilitate licensing for online use of musical works on a multi-territorial level in the EU. This article seeks to answer the question as to which legislative measures should be introduced to facilitate licensing practices and to lower transaction costs in order to enable market entry of new online music services in Europe. In order to answer this question, this article analyses relevant provisions of the Title III of the CRM Directive and problematic aspects of their application to different licensors. Furthermore, legislative and soft law documents on the EU level as well as cooperation initiatives among CMOs are evaluated in order to assess whether past initiatives can be considered by the EU legislator. Finding answers to these questions seems relevant in the light of possible re-evaluation of multi-territorial licensing practices on the legislative level in April 2021, as foreseen by the CRM Directive.
VGen handeln in einzelnen Kulturmärkten als natürliche Monopole. Doch die technologische Entwicklung der Digitalisierung und Veränderungen der regulato-rischen Umwelt durch die EU-Richtlinie von fordern die etablierten VGen und ihre Marktposition heraus. Diese Situation betrachte ich im Musikgeschäft und befrage VG-Alternativen danach, wie sie ihr Angebot gestalten, um sich von etablierten VGen zu unterscheiden. Durch einen multiplen Fallvergleich zeigt dieser Überblick, dass sich VG-Alternativen regelmäßig als global vernetzt und technologisch versiert präsentieren oder um die Entwicklung spezi scher, lokaler Märkte bemüht sind. Weniger sichtbar beziehungsweise geplant sind Alternati-ven, die sich bisher marginalisiertem Repertoire wie Creative-Commons-lizen-zierter Musik annehmen. Schlagwörter: Alternativen, Monopole, Digitalisierung, Musikwirtschaft.
Колективно остваривање ауторског права је витални део корпуса модерних ауторскоправних система. Без њега се остваривање, па и постојање ауторског права тешко може замислити. Упркос томе, у последње две деценије све се више поставља питање његове сврсисходности у данашњем добу информационог друштва. Предмет истраживања је управо подробнија анализа одређених аспеката интеракције система колективног остваривања ауторског права и нових прилика у информационом друштву. Анализом се жели постићи двоструки циљ: теоријски и практични. Теоријски циљ је да се одговори на следећа два питања:
I Да ли је и под којим условима систем колективног остваривања ауторског права сврсисходан у савременом добу информационог друштва?
II Који су могући сврсисходни правци даљег развоја система колективног остваривања ауторског права у информационом друштву?
Практични циљ је да се покаже како добијени теоријски налази могу да се искористе у креирању и планирању националне политике развоја система колективног остваривања ауторског права у информационом друштву, и то на примеру Србије.
Одговори на два теоријска питања и решење за практични задатак се, при томе, траже кроз призму конструкције друштвеног контекста, која је посебно детерминисана за потребе истраживања, тако да је чине спољашњи слој – четири групе друштвених фактора (технолошки, економски, културолошко-вредносни и политички) и унутрашњи слој – ауторско право.
Спроведено истраживање је дало наредне одговоре. Колективно остваривање ауторског права је и даље сврсисходно у информационом друштву, будући да још увек постоји довољна друштвена потреба за његовим традиционалним улогама и оно те своје улоге може делотворно да извршава. Ипак, како би остало сврсисходно на дужи рок, колективно остваривање ауторског права мора да се развија, да се реформише. Могући сврсисходни правци даљег развоја система колективног остваривања ауторског права разликују се међу државама због разлика које постоје у њиховим локалним друштвеним контекстима. Они се крећу од привременог инсистирања на традиционалном устројству, преко умерене реформе (као најуниверзалније опције), до фундаменталне реформе колективног система. На основу тих теоријских налаза, напослетку су пружене и смернице за планирање политике даљег развојa система колективног остваривања ауторског права у Србији.
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Collective management of copyright represents a vital segment of modern copyright systems. Without it, the management and even existence of copyright would be hard to imagine. Despite that, in the course of the last two decades, in the new surroundings of the information society, the question of the purpose/relevance of collective management of copyright has become prevalent.
This research aims to provide detailed analysis of particular aspects of the interaction of the existing copyright collective management system and new circumstances in the information society. The analysis is twofold: theoretical and practical. The theoretical aim is meant to answer the following two questions:
I Does the system of collective management of copyright have a purpose in the present-day information society and under what conditions?
II What are the directions for the appropriate development of collective management of copyright in the information society?
The practical aim refers to how the obtained theoretical findings could serve the goal of creating and planning of national policies for the further development of the copyright collective management system, having Serbia as an example.
The answers to the two theoretical questions and the practical task are sought by relying on the construction of the social context, specifically made within this research, so that it consists of the outer layer – four groups of social factors (technological, economic, cultural and political) and the inner layer – the copyright law.
The conducted research has provided the following answers. Collective management of copyright still has its purpose in the information society. The sufficient social need for the traditional functions of the copyright collective management system still exists. And those functions could be performed effectively by the system. Nevertheless, the copyright collective management system needs to be changed/reformed to remain relevant in the long term. Directions for the appropriate development/changes of the copyright collective management system differ among countries due to differences in their local social contexts. They range from insisting on the traditional system (at least in the short term), and moderate reform (as the most universal option) to fundamental reform. Finally, based on the acquired theoretical findings, guidelines for the planning of the copyright collective management policy in Serbia are provided.
Licensing and Access to Content in the European Union - by Sebastian Felix Schwemer May 2019
Licensing and Access to Content in the European Union - by Sebastian Felix Schwemer May 2019
Cambridge Core - Competition Law - Licensing and Access to Content in the European Union - by Sebastian Felix Schwemer
For over two decades, the collective management of rights in the Nigerian music industry has witnessed a fierce rivalry between the Copyright Society of Nigeria (COSON) and the Musical Copyright Society of Nigeria (MCSN). While the Nigerian Copyright Commission (NCC) approved the former, it refused to approve the latter. Despite this, MCSN has continually acted as a CMO; a development that has led to litigations between it and rights users on the one hand, and between it and the NCC and COSON on the other. However, in March 2017 the Attorney General of the Federation (AGF) mandated the immediate approval of MCSN as a permanent solution to the industry’s problem. This article focuses on this approval. Apart from examining the legality of the AGF’s directive and the likely effect(s) of a multiplicity of CMOs on the music industry, the article also proffers measures that may help reposition collective management in the industry for optimal performance.
Sections 7 and 8 of the Nigerian Copyright Act (Cap C28) confer an exclusive right on the owners of copyright in musical works and sound recordings. This exclusive right can be managed individually or collectively, even though the odds are against individual management where secondary uses are involved. Collective management has therefore been the preferred option in most countries. The Nigerian Copyright Commission (NCC) registered the Copyright Society of Nigeria (COSON) as the sole Collective Management Organisation (CMO) for musical works and sound recordings in Nigeria in 2010. This paper evaluates the efforts of COSON concerning the collective management of its members’ rights. Using both desk-review of existing literature and interviews with key officials of COSON, the paper analyses COSON’s rights management efforts, examines the level of government regulation of its activities, and identifies and discusses the challenges militating against its effectiveness. Finally, the paper suggests both legal and policy measures which may improve the efficiency of collective rights management for the music industry.
There are basically two different mechanisms to control collective management organizations (CMOs), namely the general competition-law approach and the sector-specific regulation approach. This chapter explains the features of copyright management (CRM) systems in general and discusses up- and downsides of both approaches. In conclusion it suggests a primary focus on sector-specific regulation. This approach not only takes into account the particularities of two-sided markets in which CMOs act as intermediaries, but also allows the balancing of non-economic values and interests which are among the objectives of CMOs. Sector-specific regulation is further capable of addressing governance issues of CMOs; above all, it promotes transparency for both right holders and users by providing ex ante guidance. General competition law, in contrast, applies ex post and is particularly likely to become a last resort to control CMOs.
This article provides a brief descriptive analysis of the recent proposal from the European Commission for a Directive on collective rights management and multi-territorial licensing. After setting the necessary background, it examines the proposal’s main provisions, focusing on those establishing a governance and transparency framework for collecting societies and multi-territorial licensing for online uses of musical works
This chapter examines efforts to regulate the collective management of copyright at the European level. It is divided in three main parts. First, the chapter describes the current state of the law concerning collective rights management organizations (CMOs) in Europe, as pronounced over the past few decades in decisions of the European Court of Justice and the European Commission in competition matters. Second, the chapter discusses the recent efforts deployed by the European lawmakers toward the establishment of a legal framework governing the activities of CMOs in Europe, and more specifically the multi-territorial licensing of online music services. The third part analyses the actual and potential impact on the market for the cross-border collective management of legitimate online music services of the most recent measures adopted by the European bodies. The chapter critically concludes on the overall state of the law in Europe pertaining to CMOs.
In the European Union, copyright law is increasingly a matter for the European legislator. Member states retain ever less competence to regulate intellectual property rights.This study critically examines the 'acquis communautaire' in the field of copyright and related (neighbouring) rights, focusing on the seven copyright specific directives, from the 1991 Software directive to the 2001 Information Society Directive. It also deals with distinct issues that are on the agenda of the EU: After reviewing arguments for and against the extension of the term of protection of phonograms (sound recordings), the authors conclude there is no convincing case for extending the term of protection for sound recordings and performing artists. Neither are there compelling arguments to further harmonize the term of protection of co-written musical works. The issue of 'orphan works' is one that could benefit from an EU wide solution. Having assessed the benefits and drawbacks of the fifteen years of harmonization of copyright, the authors conclude that the European legislator should exercise restraint in further harmonization efforts at least as long as a coherent vision of the role of copyright in the EU is lacking.The Study was commissioned by the European Commission, DG Internal Market (2006) and is available at the Institute for Information Law website.
Anyone that has the opportunity to access online music or film services in both the United States and in Europe (or even in distinct E.U. countries) can easily realize how undeveloped, or more restricted territorially, the E.U. online content sector is. In the United States, the recent launch of innovative online services – e.g., Apple's iTunes, Microsoft's Zune, Rhapsody, Beatport, Pandora – has revolutionized the landscape of legitimate access to and use of online content and created a credible alternative to digital piracy. Contrastingly, in the European Union, online music services and music stores – e.g., LastFm, Spotify, iTunes – have not taken off, at least not fully. This is not only due to the still rampant phenomenon of music and film piracy on illegal file sharing platforms. The unbearable complexity of online rights clearance processes is a major problem for commercial users wishing to develop and launch pan-European online content services and to take advantage of the E.U. cultural sector as a whole.This Article examines the restructuring of online rights management that the E.U. Commission recently imposed upon collecting societies and copyright holders in the online music sector in order to foster the adoption of multi-territorial collective licences covering the whole territory of the European Union. The Article examines the responses of major international music publishers and national collecting societies to the European Commission's action by focusing on the emergence of distinct types of new licensing models and on the legal problems and questions that these new models have posed so far. The scenarios which have materialized in the wake of the restructuring of online music rights management show how the pan-European monorepertoire licensing models of the major multinational music groups impacts the economic sustainability of national collecting societies and the online rights clearance solutions made available to commercial users. The Article also examines whether the above restructuring is of any help to rights holders and rights managers who find it suitable or commercially convenient to combine commercial collective licences and noncommercial individual licences (e.g., Creative Commons) in the management of online rights over their works. The Article takes the conclusion that the radical modification of the structure of online music rights management recently pursued by the E.U. Commission has mainly failed its policy objectives while making online music rights clearance even more complicated, legally uncertain and discouraging. The Article also indicates what legislative amendments the Commission might consider proposing in order to rationalize and greatly simplify collective rights management in the digital environment and what the easiest and most productive model for the development of E.U.-wide music rights management could be.
There are many products for which the utility that a user derives from consumption of the good increases with the number of other agents consuming the good. There are several possible sources of these positive con- sumption externalities.1 1) The consumption externalities may be generated through a direct physical effect of the number of purchasers on the quality of the product. The utility that a consumer derives from purchasing a telephone, for ex- ample, clearly depends on the number of other households or businesses that have joined the telephone network. These network externalities are present for other communi- cations technologies as well, including Telex, data networks, and over-the-phone facsimilie equipment. 2) There may be indirect effects that give rise to consumption externalities. For example, an agent purchasing a personal computer will be concerned with the number of other agents purchasing similar hardware because the amount and variety of software that will be supplied for use with a given computer will be an increasing function of the number of hardware units that have been sold. This hardware-software paradigm also applies to video games, video players and recorders, and phonograph equipment. 3) Positive consumption externalities arise for a durable good when the quality and availability of postpurchase service for the good depend on the experience and size of the service network, which may in turn vary with the number of units of the good that have been sold. In the automobile market, for example, foreign manufacturers' sales initially were retarded by consumers' awareness of the less experienced and thinner service networks that existed for new or less popular brands. In all of these cases, the utility that a given user derives from the good depends upon the number of other users who are in the same "network" as is he or she. The scope of the network that gives rise to the consumption
In line with the most recent EU trends, the Italian collecting management system has just been modernized. However, despite the pro-competitive intent inspiring the new regulation, the final outcome is almost unsatisfactory. In fact, the 2012 law is aimed on one hand at liberalizing the related right management system (only), and on the other hand at shaping the feature on the new market without considering the relevant implications for the copyright management. As a result, the Italian management and intermediation system of copyright and related rights is still looking for a consistent reform. In such perspective, it becomes urgent distinguishing those functions traditionally assigned to single collecting societies that must be dismantled from those tasks that are justifiable under a general interest perspective. In the new environment, the latter rules only shall be confirmed under an exclusive regime, being economically and legally sound to open the others to competition.
On 20 February 2014, the Council of the European Union adopted the new Directive on Collective Rights Management. In its Proposal for this Directive, the Commission argued that cross-border collective rights management services are liberalised pursuant to Article 16 of the Services Directive of 2006. Yet, only one week after the adoption of the new Directive, the Commission’s view was rejected by the Court of Justice of the EU in the OSA judgment. This chapter analyses the relationship between the principle of free movement of services and national sector-specific regulation of CMOs in more detail in order to explore to which extent the principle of free movement of services and the need for specific rules for collective management of copyrights could be better coordinated in the future.
Economists have long recognised that copyright collecting societies (CCS), i.e. organisations that specialise on administering "copyrights held by a large number of owners", play a fundamental role in the copyright system. Indeed, the economic literature explains why without such organisations, copyright law would be ineffective in some markets for copyrighted works: the majority of authors and users would not be able to grant or obtain permission to use many works of art, literature, music, film and other such works that copyright law protects. In economic terms, CCS enable markets to function for the use of copyright works in situations in which the copyright holder cannot contract directly with the user. But because many markets for copyright works have changed rapidly over recent years, we should ask under which circumstances CCS would continue to play a constructive, maybe even essential, role. It has been argued many times that technical solutions to digital rights management (DRM) will render CCS obsolete as the market for copyrights shifts online and policy-makers such as the European Commission have begun to scrutinise the role played by CCS in the dynamic market for copyrighted media content online (REC 2005/737/EC). The purpose of this survey of the specialised economic literature is to take stock and to identify possible gaps in the understanding of the economics of CCS and to advocate attention to this literature in contemporary debates about them.
Current economic doctrine offers to its students a basic relationship between the number of firms that produce for a given market and the degree to which competitive results will prevail. Stated explicitly or suggested implicitly is the doctrine that price and output can be expected to diverge to a greater extent from their competitive levels the fewer the firms that produce the product for the market. This relationship has provided the logic that motivates much of the research devoted to studying industrial concentration, and it has given considerable support to utility regulation.2
This is a second in a series of two articles in which I challenge the collective administration of performing rights. In the
first article, published in a recent issue of this journal, I questioned the natural monopoly paradigm that dominates the
analysis of collective administration of performing rights. In this article I demonstrate how, by lowering many of the transaction
costs which previously purported to justify the practice, new digital technologies further undermine the justification for
collective administration. I also discuss whether market forces alone would transform the market into a competitive one, consider
possible continuing roles for existing performing rights organizations, and compare the Canadian and the U.S. regulatory approaches
to determine how conducive they are to such change.
Many if not most markets with network externalities are two-sided. To succeed, platforms in industries such as software, portals and media, payment systems and the Internet, must "get both sides of the market on board." Accordingly, platforms devote much attention to their business model, that is, to how they court each side while making money overall. This paper builds a model of platform competition with two-sided markets. It unveils the determinants of price allocation and end-user surplus for different governance structures (profit-maximiz-ing platforms and not-for-profit joint undertakings), and compares the outcomes with those under an integrated monopolist and a Ramsey planner. (JEL: L5, L82, L86, L96) Copyright (c) 2003 The European Economic Association.
Two-sided platforms (2SPs) cater to two or more distinct groups of customers, facilitating value-creating interactions between them. The village market and the village matchmaker were 2SPs; eBay and Match.com are more recent examples. Other examples include payment card systems, magazines, shopping malls, and personal computer operating systems. Building on the seminal work of Rochet and Tirole (2003), a rapidly growing literature has illuminated the economic principles that apply to 2SPs generally. One key result is that 2SPs may find it profit-maximizing to charge prices for one customer group that are below marginal cost or even negative, and such skewed pricing pattern is prevalent, although not universal, in industries that appear to be based on 2SPs. Over the years, courts have also recognized that certain industries, notably payment card systems and newspapers, now understood to be based on 2SPs, are governed by unusual economic relationships. This chapter provides an introduction to the economics of 2SPs and its application to several competition policy issues.
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