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Music royalty group offers EU licenses to avoid antitrust fine

A group of music royalty collection societies has offered to allow broadcasters pan-European copyright licenses, seeking to avoid antitrust fines from European Union regulators.

In February 2006, the Brussels-based regulator said the collecting societies' territorial restrictions that force broadcasters and Internet music stories to obtain a license only from a domestic collecting society may break the law. The societies have offered to drop that restriction in most cases for Internet, satellite and cable music broadcasts. The commitments by the International Confederation of Societies of Authors and Composers, known as Cisac, „are being submitted for the sole purpose of attempting to reach a settlement,” according to a February 28 document obtained by Bloomberg News.

The EU has put collecting societies under increased scrutiny. In October 2005, EU Internal Market Commissioner Charlie McCreevy said the music industry's growth in Europe is hampered by having to negotiate rights country by country.
The European Commission's probe follows a complaint by RTL Group SA, Europe's biggest broadcaster and a unit of Germany's Bertelsmann AG, filed in 2000. Musicians' rights are currently controlled by collecting societies in the EU's 27 member states. Each society enjoys a national monopoly.

The commission, the EU's antitrust authority, wants more competition between the societies, particularly for administrative services. McCreevy recommended that broadcasters should be able to get pan-European licenses and to let the artists choose which collecting society should represent them, regardless of where they reside. The European Parliament said today the commission should propose a binding EU law for the online music market to allow the parliament a vote on the measure. The parliament also criticized the commission's call for more competition, saying the proposal should include measures to ensure the „protection of local and niche repertoires,” the EU body said in an e-mailed statement. Under Cisac's proposal, outlined in an eight-page document, collecting societies can grant multiterritorial licenses for performing rights over the Internet, satellite and cable. Traditional forms of copyright use such as broadcasting music in a bar or a night club aren't covered.

Online music stores also need to get „mechanical” rights from publishing companies such as Vivendi Universal Publishing and EMI Group Plc. These rights allow songs to be downloaded. The commission hasn't decided whether to send the proposals to broadcasters for their comment. A decision may be made in the next few weeks. „We need an agreement with the commission before they send out the proposal,” Paris-based Cisac spokesman Marianne Rollet said by telephone. Jonathan Todd, a commission spokesman, had no comment. Under EU rules, the commission could reject Cisac's offer and impose a fine for restrictive business practices, which could be as much as 10% of annual sales. (Bloomberg)