A Europa press release reports that the European Commission has sent a statement of objections to CISAC (the International Confederation of Societies of Authors and Composers) and the individual national collecting societies in the EEA that are members of CISAC. A statement of objections is a formal step in EU antitrust proceedings, which triggers a two-month period in which the recipient can defend itself in writing or request an oral hearing before the Commission.
The Commission feels that CISAC and the collecting societies may be in breach of Art.81 of the EC Treaty, which outlaws anticompetitive agreements. In particular, the Commission alleged that provisions of the CISAC model contract, and the contracts implemented at national level by its members may be in breach when in comes to internet, satellite transmission and cable retransmission of music. Three key problems are identified:
1. authors can only transfer their rights to the collecting society in their home country, and not to the societies in other Member States;The IPKat wonders if perhaps there is a conflict between objection 1 and objection 2. He has trouble envisaging a situation in which interests of authors and the interests would-be licensees would converge when it comes to the issue of determining and collecting royalties.
2. those seeking a licence must do so only from the collecting society in the state in which they are based, and even then, the licence will only cover that jurisdictions;
3. the risk of “network effects” i.e. a web of anticompetitive contracts that self-perpetuates, and makes is impossible for new collecting societies to enter the market.