European Commission to investigate music royalty fees

May 4, 2004

Today we got news, which was also submitted byGristyMcFisty, that the European Commission is going to investigate the licensing of music in the European union. They are going to take a look at the organisations (for example in the Netherlands: Buma/Stemra) and check if they are violating the anti trust rules.

It issued a warning to 16 organisations that collecting royalties on behalf of music writers using the same set of rules could breach the EU competition rules.The reason for that, it explained, that the Santiago Agreement, between the different licensing societies, has locked up national territories and moved into the online world the same agreements that exist in the "offline" world.The commissioners said they were told of the Santiago Agreement in April 2001 by collecting societies in the UK, in France, in Germany and the Netherland - and subsequent collection societies apart from Portugal and Switzerland joined in on that agreement.The purpose of that agreement was, said the EU in a statement, to allow the societies to grant copyright licences of music everywhere and let them supply the music online in a unified way.

When you want offer music online (like weblisten.com or allofmp3.com) you have to have a license from the organisation who collects the royalties. The EU supports a 'one stop shop' system so you won't have to deal with every country and organisation but you can just turn to one of them. This is normally a good way since you have some kind of competition between the different organisations. However the 'Santiago Agreement' imposes a structure which may be monopolistic and where the open structure doesn't work anymore. Read the full article at the Inquirer.

Source: Inquirer