The agreement, known as the Santiago Agreement, was signed in
October 2000 by five organisations – including the Performing
Rights Society (PRS) from the UK and Broadcast Music Inc from the
US – that collect royalties on behalf of music authors.
The Agreement is designed to tackle the problems that
traditional copyright licensing schemes face in light of the growth
of new technologies and internet use. The most obvious of these is
territoriality, or lack of it, for once uploaded to the internet,
copyrighted music is accessible from almost anywhere in the
world.
The traditional licensing framework requires a commercial user
wishing to offer such music to obtain a copyright license from
every single relevant national society. The Santiago Agreement
sought to adapt the traditional framework to the on-line world by
allowing each of the participating societies to grant "one-stop
shop" copyright licences which included the music repertoires of
all member societies and which were valid in all their
territories.
The Agreement was notified to the Commission in April 2001 by
the collecting societies of the UK, France (SACEM), Germany (GEMA)
and the Netherlands (BUMA). These were subsequently joined by all
societies in the European Economic Area (except for the Portuguese
society (SPA) and the Swiss society (SUISA)).
Yesterday the Commission announced that, while it strongly
supports the "one-stop shop" principle for on-line licensing, it
also considers that such crucial developments in on-line-related
activities must be accompanied by an increasing freedom of choice
for EU consumers and commercial users as regards their service
providers.
According to the Commission, the structure put in place by the
parties to the Santiago Agreement results in commercial users being
able to apply for the licence from only the collecting society
established in their own Member State. This, says the Commission,
could be in breach of competition rules.
The Commission points to recent events in other areas relating
to the collective management of copyrights, which show that a more
relaxed structure will work.
In particular, in 2002 the Commission exempted a Simulcasting
agreement that established pan-European licensing without imposing
territorial exclusivity. Under this agreement, TV and radio
broadcasters can obtain a licence from any of the collecting
societies located in the EEA in order to simultaneously transmit
their music broadcasts via the internet. This freedom of choice
means that broadcasters can choose the most efficient society in
Europe for the delivery of the licence.
In addition, the record producers' collecting societies
announced in 2003 that they had concluded a standard agreement for
the purposes of Webcasting licensing, under which commercial users
enjoy a similar freedom of choice as regards the licensor society
in Europe.
The Commission considers that the territorial exclusivity
afforded by the Santiago Agreement is not justified by technical
reasons and is irreconcilable with the worldwide reach of the
internet.
It considers that the lack of competition between national
collecting societies in Europe hampers the achievement of a genuine
single market in the field of copyright management services and may
result in unjustified inefficiencies as regards the offer of
on-line music services, to the ultimate detriment of consumers.
The Commission has therefore sent a "Statement of Objections" to
each of the EU collecting societies party to the Agreement. This
does not prejudge the final outcome of the investigation.
The collecting societies have two-and-a-half months to reply to
the Commission's objections. They can also request a hearing at
which they would be able to submit their arguments directly to the
representatives of the national competition authorities.
