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European Commission

MEMO

Brussels, 5 November 2013

Commissioner Michel Barnier welcomes the trilogue agreement on collective rights management

I welcome the provisional agreement reached last night by the European Parliament and the Council, laying the foundation for modern copyright licensing in the single market.

The new directive will modernise the functioning of all collective management organisations (also referred to as “collecting societies”) across Europe and facilitate multi-territorial licensing of musical works for online use.

As new technologies allow for new forms of dissemination of creative content online, the new rules will benefit citizens and rightholders, such as authors, producers, or performers, their representative organisations, as well as service providers offering innovative music services online. They will provide for greater transparency and more accurate and efficient management of rights. Clear rules and transparency requirements on the collection and distribution of remuneration for the use of copyright and related rights will apply across Europe. Rightholders will be more involved in the decision-making process of their collective management organisation, whereas collective management organisations will be strengthened in their capacity to represent authors, performers or producers in all Member States in view of efficient rights management across the single market.

The fragmentation of online music rights and the complexity associated with the collective management of rights has indeed limited multi-territorial licensing for online music services that reach citizens in more than one Member State. The Directive lays down common rules and standards for multi-territorial licensing, while collective management organisations can – and in certain circumstances are obliged to – represent each other’s repertoire for multi-territorial licensing to services in the single market. Citizens in the whole of Europe must be able to enjoy the full repertoire of music online, including smaller and niche repertoires. The licensing of other online services using music (from audiovisual to games) will also be greatly facilitated.

Finally, the new Directive contains rules on dispute resolution and enforcement measures in matters involving collective management organisations to ensure that the provisions of the Directive are complied with in a coherent manner throughout the single market.

This Directive is a key step towards the completion of the Digital Single Market, which had led the European Council to call for accelerated work in view of finalising the negotiations. Constructive discussions in the Parliament and in the Council have led to a very good negotiation result, which will now have to be confirmed in the European Parliament and the Council. I am confident they will do so very soon and I would like to warmly thank everyone who has contributed to this success, in particular the rapporteur, Marielle Gallo, as well as the Cypriot, Irish and Lithuanian Presidencies. I also wish to thank all the stakeholders for their involvement in consultations.

Background

In July 2012, as announced in its Communication A Single Market for Intellectual Property Rights, the Commission adopted its proposal on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses (IP/12/772). This proposal is important for the completion of the Digital Single Market.

Collective management organisations act as intermediaries between rightholders in a variety of industry such as music, books or films, and the service providers intending to use their works. They license rights, collect and distribute royalties to rightholders in circumstances where negotiating licences with individual creators would be impractical and entail high transaction costs.

Cases of mismanagement of rights revenue or long-delayed payments have shown that there is a need to improve the functioning of collective management organisations.

Furthermore, the collective management of rights also plays a key role in the licensing of online music service providers (music download services or streaming services). Online service providers often want to cover a multitude of territories and a large catalogue of music. Many collective management organisations have not been able to meet these challenges, and service providers have faced difficulties when trying to obtain the licences necessary to launch online music services across the EU resulting in fewer online music services available to consumers.

The main elements of the new rules:

(1) Clear description of rightholders’ rights; including their free choice of a collective management organisation and of the scope of authorisation (rights, categories of rights and types of works of their choice; territories of their choice);

(2) Minimum requirements relating to a collective management organisation’s governance structure, e.g. the obligation on the collective management organisation to have a supervisory function to supervise management, provisions relating to voting rights of rightholders and their rights to give a proxy to a representative to exercise their right to vote at the general assembly;

(3) Time limits regarding the payments made to rightholders by a collective management organisation, as well as rules regarding the use of the amounts which cannot be distributed;

(4) Rules regarding the relation with users and criteria for setting up tariffs;

(5) Transparency requirements towards rightholders, other collective management organisations, users and the public;

(6) Establishment of criteria a collective management organisation has to fulfil to grant multi-territorial licences for authors’ rights in musical works for online use;

(7) Rules on representation agreements between collective management organisations for the purposes of multi-territorial licensing, in particular criteria for when a collective management organisation has an obligation to represent another organisation;

(8) Provisions on dispute resolution, such as an alternative dispute resolution procedure for certain disputes relating to multi-territorial licensing.

More information on collective rights management is available at: http://ec.europa.eu/internal_market/copyright/management/index_en.htm


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