This so-called one-stop shop approach would create legal clarity for online music, but it would potentially also mean a market distortion because commercial users would not have a choice between different collecting societies.
This lack of competition, the Commission argues, could lead to higher royalties for music and would therefore be bad for consumers. It would also transpose into the online world the present situation in the offline world, where royalties differ considerably from one country to another. As online downloading services can be used throughout the EEA, this would result in a market distortion for competitors based in different countries. DG Competition has therefore notified the parties to the agreement that it is looking into giving a negative opinion on it.
BUMA and SABAM are the only two collecting societies who have responded to the Commission, proposing a number of measures which would lift at least those parts of the agreement that the Commission considers most problematic. In particular, they have refrained from being parties in agreements that contain an economic residence clause. The Commission considers these commitments adequate but intends to market-test them before giving its clearance.
