Commission opens consultation on online music distribution

The Commission has opened a public consultation on a commitment from Dutch and Belgian music copyright collecting societies – BUMA and SABAM respectively – concerning online music licensing.

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. 

Talking to EURACTIV, SABAM spokesman Thierry Dachelet commented: "We have taken account of the Commission's latest steps. In the future, we would like to find an agreement with other collecting societies and with the Commission with a view to a solution that will be immune to further criticism from the Commission, while offering a maximum of guarantees for rightsholders." 

In 2001, all the collecting societies in the European Economic Area (EEA) but the Portuguese one concluded the so-called Santiago agreement, which allows commercial users of online music - such as operators of downloading services - to obtain a licence for the whole of the EEA by contacting only their one national collecting society instead of societies in every single country. 

  • The Commission plans to publish the commitments of BUMA and SABAM in the Official Journal.
  • The commitment and the Commission's clearance would be limited to a three-year period. 

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