Creative Competition' with a Pan-European Licensing Body: Reconsidering the European Commission's Approach to Collecting Societies

Collecting societies are organisations which are responsible for managing the copyright licenses and royalty payments of right holders. In the European Union, collecting societies which manage the public performance of music rights have historically operated with reciprocal representation agreements, with many of them being national monopolies. These prima facie anti-competitive agreements were cirticised, particularly by commercial users, who felt that such a system was inefficient and a hindrance to digital music broadcasting. On 16 July 2008, following an investigation, the European Commission adopted a decision which introduces competition between collecting societies by prohibiting membership and territorial restrictions as well as a concerted practice among the societies. The decision is the subject of an ongoing appeal. The objective of this article is to critically evaluate the decision and its implications. It will be argued that the Commission has over looked several implications of its decision, which could have negative effects on the collecting societies themselves as well as on cultural diversity in the EU. A preferable solution is to retain the respective national collecting societies, but to establish a central licensing body to grant pan-European licenses. The dynamic concept of 'creative competition' should also be implemented within the framework of each collecting society to preserve cultural diversity in the European music industry.