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Implementation of Directive 2014/26/EU on Collective Management and Multi-Territorial Licensing of Musical Rights in Regulating the Tariff-Setting Systems in Central and Eastern Europe

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Abstract

Procedures for setting the tariffs in collective management of copyright in Central and Eastern Europe are currently more or less intensively coloured by the influence of state authorities (such as intellectual property/copyright offices or competent ministers) or quasi-state authorities (such as copyright expert boards, councils or mediators). This article presents the results and conclusions drawn from research on tariff-setting procedures and criteria in the national laws of 13 Central and Eastern European countries as well as in European law and jurisprudence. Furthermore, this article analyses the provisions of Directive 2014/26/EU on collective management and multi-territorial licensing of musical rights, relevant for procedures and criteria for setting tariffs for both traditional and online use. Specific challenges introduced by this Directive are discussed, for authorised and unauthorised uses in the online world, as well as the influence of the Directive on the amount of remuneration for the repertoire represented by collective management organisations (CMOs). According to Directive 2014/26/EU, the position of CMOs in licensing and enforcing the rights collectively in the digital environment has changed tremendously, since they are not able to rely on their monopoly position nor on the presumption of representation, on the one hand, and they are invited to act multi-territorially, on the other hand. In these circumstances their cultural and social role is put at stake, which also affects cultural diversity in Europe. Finally, it is emphasised that in light of the shift in the paradigm of collective management from mono- to multi-territorial management, introduced by Directive 2014/26/EU, the problem of applicable law arises in relation to tariff-setting procedures established by the national laws of EU Member States.

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Notes

  1. OJEU L 84/72 of 20 May 2014 (hereinafter Directive 2014/26/EU).

  2. OJEU L 276 of 21 October 2005 (hereinafter Commission Recommendation of 2005).

  3. See Gilliéron (2006), p. 969. See also the analysis on “Creative Competition” in the digital environment in Drexl (2007), pp. 275–282.

  4. See e.g. Dietz (2013); Graber (2012).

  5. For more see Gyertyánfy (2010), pp. 59–62, 77–79; Mazziotti (2011), p. 27.

  6. See Arts. 30 and 31 of Directive 2014/26/EU.

  7. Namely, it is a possible scenario that the price of music for the end-user will decrease, which will consequently lead to dwindling incomes for most composers, song writers and other music authors, except for a small group of the most popular ones.

  8. See also Gyertyánfy (2010), who summarises eight essential traits of continental-European collective management societies, pp. 66–67.

  9. Due to space constraints, it is not possible to show here the tariff-setting and tariff-dispute-settlement systems on a country-by-country basis.

  10. See also Recital 13 of Directive 2014/26/EU.

  11. Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission, OJEU L 248 of 6 October 1993 (Satellite and Cable Directive).

  12. See Recital 30 and Art. 11 of the Satellite and Cable Directive.

  13. Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, OJEU L 167 of 22 June 2001 (InfoSoc Directive).

  14. See Recital 46 of the InfoSoc Directive.

  15. See Recital 15 of the Commission Recommendation of 2005.

  16. For Hungary see Arts. 19–21, 23–23/A, 25–28, 85–92/P, 101–105/A of Act LXXVI of 1999 on Copyright, as amended (Hungarian CA); for Austria see Arts. 21–22, 26–27, 30–33, 36–37 of the Collecting Societies Act from 2006 (Austrian CSA), as amended; for Germany see Arts. 12–18 of the Act on Administration of Copyright and Related Rights of 1965, as amended (German AACRR); for Poland see Arts. 20–211, 47, 70, 104–11023 of the Copyright and Related Rights Act of 1994, as amended (Polish CRRA); for Slovakia see Secs. 19, 24, 48–49, 78–82 of the Copyright and Related Rights Act, as amended (Slovak CRRA); for the Czech Republic see Arts. 25, 95–98, 100–102, 104 of the Copyright and Related Rights Act of 2000, as amended (Czech CRRA) and 1–10 of the Annex to Act No. 121/2000 Coll.; for Romania see Arts. 1065, 107–1072, 119, 121, 1231–125, 126, 127, 130, 134, 138, 1384 of the Copyright and Related Rights Act of 1996, as amended (Romanian CRRA); for Bulgaria see Arts. 19, 20a–21, 22a, 25, 26, 40–40b, 40f–40 h of the Copyright and Related Rights Act of 1993, as amended (Bulgarian CRRA); for Estonia see Secs. 133–15, 26–271, 76–79, 87–871 of the Copyright and Related Rights Act of 1992 (Estonian CRRA); for Lithuania see Arts. 15, 17, 20, 23, 53, 55, 58, 65–72 of the Copyright and Related Rights Act of 1999, as amended (Lithuanian CRRA); for Latvia see Secs. 34–35, 51–52, 63–673 of the Copyright and Related Rights Act of 2003, as amended (Latvian CRRA); for Slovenia see Arts. 37–39, 84, 122–124, 130–131, 135, 139, 143–163 of the Copyright and Related Rights Act of 1995, as amended (Slovenian CRRA); for Croatia see Arts. 53–54, 126–128, 134–136, 137b, 140–141, 156–166 of the Copyright and Related Rights Act of 2003, as amended (Croatian CRRA). All references to copyright acts are to the respective unofficial consolidated text valid as from March 2014.

  17. State intervention in tariff-setting is a kind of restriction of the rights of right owners. See Gyertyánfy (2010), p. 63.

  18. On the contrary, the European Commission in its Staff Working Document, Impact Assessment accompanying the document Proposal for a Directive of the European Parliament and of the Council on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market of 11 July 2012, COM(2012) 372 final, SWD(2012) 205 final, Brussels (hereinafter Impact Assessment) described the German system as a combination of arbitration and litigation since the proposal accepted by the parties in the mediation procedure becomes enforceable. It also concludes that in Hungary there is no specific alternative resolution mechanism and that in most of the European Member States there are no mediation systems covering all kinds of dispute, see p. 119 and footnotes 258 and 259. The analysis here shows different results in relation to Central and Eastern Member States.

  19. See Recital 17 of the Satellite and Cable Directive.

  20. See Art. 6(1) of Directive 2006/115/EC of the European Parliament and of the Council of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property, OJEU L 376 of 27 December 2006 (codified version) (Rental and Lending Directive). See also other criteria in Recital 13 of the Rental and Lending Directive.

  21. Directive 2011/77/EU of the European Parliament and of the Council of 27 September 2011 amending Directive 2006/116/EC on the term of protection of copyright and certain related rights, OJEU L 265 of 11 October 2011 (Directive on the Extension of the Term of Protection).

  22. See Art. 1 of the Directive on the Extension of the Term of Protection, by which Art. 3 of Directive 2006/116/EC is amended by inserting paras. 2c and 2e.

  23. CJEU case C-395/87 – Tournier, [1989] ECR 02521.

  24. CJEU cases C-110/88, 241/88 and 242/88 – Lucazeau, [1989] ECR 02811.

  25. Tournier, at paras. 38, 43, 46; Lucazeau, at para. 33. See also Frabboni (2009), p. 380; Guibault and van Gompel (2010), pp. 141–142.

  26. CJEU case C-192/04 – Lagardère, [2005] ECR I-07199.

  27. See Lagardère, at para. 46. Therefore, taking into consideration the facts of this case, the fee for the use must be governed not only by the law of the Member State on whose territory the broadcast company is established but also by the legislation of the Member State in which, for technical reasons, the terrestrial transmitter broadcasting to the former is located. See Lagardère, at paras. 44 and 56. The Court repeated that when determining the remuneration for broadcasting it is necessary to take into consideration all the parameters of the broadcast such as, in particular, the actual audience, the potential audience and the language version of the broadcast. See Lagardère, at para. 51, corresponding to Recital 17 of the Satellite and Cable Directive.

  28. CJEU case C-245/00 – SENA, [2003] ECR I-01251.

  29. The CJEU referred to Art. 8(2) of the Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property, OJEU L 346 of 27 November 1992. Directive 92/100/EEC has been repealed and replaced by the Rental and Lending Directive. The same Article is also in this codified version.

  30. At the time the SENA case was decided, it was “Community law” and “European Communities” as predecessors to EU law and the EU.

  31. See SENA, at paras. 22 and 24.

  32. See SENA, at paras. 34 and 38.

  33. See SENA, at para. 37.

  34. See SENA, at paras. 46–47.

  35. CJEU case C-52/07 – Kanal 5 Ltd, [2008] ECR I-09275. Here, the CJEU was examining the tariff for broadcasting in relation to the question of abuse of a monopoly position and concluded that the CMO in principle needs to impose the same method of calculation (lump sum or percentage) of royalties for equivalent services, both for commercial companies and public service undertakings, unless a different practice may be objectively justified. In this particular case the CJEU found that a different method of calculation is objectively justified because of the task and method of financing of public service undertakings (see Kanal 5 Ltd, at para. 47). This case is also the referral case for the Commission; see Impact Assessment, p. 66.

  36. See Kanal 5 Ltd, at paras. 28 and 37.

  37. See Kanal 5 Ltd, at paras. 30, 31, 36 and 39.

  38. See Kanal 5 Ltd, at paras. 41 and 48.

  39. See also Guibault and van Gompel (2010), pp. 142, 143.

  40. CJEU case C-351/12 – OSA, [2014] ECR 2014 – 00000 (IIC 4/15).

  41. It is clear that the CJEU is not opposed to the possibility of a legal monopoly of the CMO under the national law (see OSA, at para. 10 with reference to Art. 98(6)(c) of the Czech CRRA, which regulates that the relevant ministry may grant an authorisation for performing the management of copyright only if no other person already has such an authorisation for the exercise of the same right in relation to the same subject-matter and, in so far as a work is concerned, for the exercise of the same right in relation to the same kind of work). The CJEU further pointed out that the legal monopoly is consistent with Art. 16 of Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market, OJEU L 376 of 27 December 2006 (Services Directive) and Arts. 56 and 102 of the TFEU.

  42. See OSA, at paras. 85, 87, 88, 92 and 93.

  43. However, in this context it is worth mentioning a curiosity in Art. 23 of the Czech CRRA, which regulates that the total remuneration for all right holders for communication to the public in hotel rooms may not exceed 50 % of the fee due for every device in hotel rooms or other accommodation premises. Another curiosity in this context is the provision in the Romanian CRRA that regulates that the maximum amount for neighbouring rights may not exceed one-third of the negotiated remuneration for copyright for the same category of users. See Art. 134(2)(g) of the Romanian CRRA.

  44. E.g. the Commission accused European CMOs of exercising concerted practices while negotiating the reciprocal representation agreements, which resulted in national territorial limitations. It also concluded that the exclusive representation clauses and membership clauses in those agreements are anti-competitive. See infra note 60, the CISAC decision.

  45. See Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee – The Management of Copyright and Related Rights in the Internal Market, COM(2004) 261 final, Brussels, 16 April 2004. Here, the Commission suggested that the CMOs should offer appropriate instruments for users to contest the tariffs. See more Frabboni (2009), p. 392. See also Commission Staff Working Document – Study on a Community Initiative on the Cross-Border Collective Management of Copyright of 7 July 2005. See also Guibault and van Gompel (2010), pp. 150–155. However, these two papers are on very different lines.

  46. For other initiatives of the Commission see Toft (2006).

  47. See also Mazziotti (2011), p. 7.

  48. E.g. the freedom of choice (substantive and territorial, regardless of nationality) of the CMO by the right holders, the right to withdrawal of online rights from any existing reciprocal representation agreement concluded, transparency of the repertoire, distribution and deductions. See also Guibault and van Gompel (2010), pp. 155–158.

  49. UK, German, French and Spanish CMOs for music authors and publishers.

  50. For details see Impact Assessment, pp. 106 and 107.

  51. See points 9 and 15 of the Commission Recommendation of 2005. The answer to the Recommendation was the European Parliament Resolution of 13 March 2007 on the Commission Recommendation of 18 October 2005 on collective cross-border management of copyright and related rights for legitimate online music services (2005/737/EC), P6_TA(2007) 0064, Strasbourg and European Parliament Resolution of 25 September 2008 on collective cross-border management of copyright and related rights for legitimate online music services, P6_TA(2008)0462, Brussels. See also Frabboni (2009), pp. 390–391; Guibault and van Gompel (2010), pp. 158–159; Quintais (2013), p. 5.

  52. Umbrella organisations for authors’ CMOs for performing and mechanical rights.

  53. See also Lüder (2007), p. 8/15.

  54. See also Mazziotti (2011), p. 6, and Commission press-release from 3 May 2004 at http://europa.eu/rapid/press-release_IP-04-586_en.htm?locale=fr.

  55. Notice published pursuant to Art. 27(4) of Council Regulation (EC) No. 1/2003 in Cases COMP/C2/39152 – BUMA and COMP/C2/39151 SABAM (Santiago Agreement – COMP/C2/38126), OJEU C 200 of 17 August 2005. See also Mazziotti (2011), footnote 27.

  56. For Santiago and Barcelona Agreements see Gilliéron (2006), pp. 944–945; Frabboni (2009), pp. 382–384; Woods (2010), pp. 116–118.

  57. International umbrella organisation which represents the interests of the recording industry.

  58. See Commission Decision 2003/300/EC of 8 October 2002 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case No. COMP/C2/38.014 — IFPI “Simulcasting”), OJEU L107 of 30 April 2003, at paras. 27 and 28.

  59. See Gilliéron (2006), p. 943, footnote 18; Hilty and Nérisson (2009), pp. 7–8; Frabboni (2009), pp. 381–382; Guibault and van Gompel (2010), pp. 144–146. See also IFPI “Simulcasting”, at para. 99 et seq.

  60. Commission Decision of 16 July 2008 relating to a proceeding under Article 81 of the EC Treaty and Article 53 of the EEA Agreement (Case COMP/C2/38.698 – CISAC) C(2008) 3435 final. See also Frabboni (2009), pp. 384–385; Guibault and van Gompel (2010), pp. 146–149.

  61. CISAC, supra note 60, at paras. 22–26 and 38. The Commission, taking into consideration the previous case law of the CJEU and previous Commission decisions (see Lucazeau, Tournier and IFPI “Simulcasting”) did not question the territorial delineation by means of reciprocal representation agreements itself but the concerted practice that led to such a delineation. See also Mazziotti (2011), p. 9.

  62. CISAC, at paras. 28, 36, 37 and 40.

  63. CISAC, at paras. 27 and 30–35.

  64. The vision of the Commission is that competition for members and users should result in two to three major CMOs. Actually, this is nothing other than fighting for new monopolies and oligopolies by means of anti-cartel law. Gyertyánfy (2010), p. 79. See also Ricolfi (2007), p. 297; Porcin (2009), p. 62.

  65. At paras. 217–220 of the Commission’s CISAC decision (supra note 60) and paras. 42–43 of the Court’s CISAC decision (infra note 66).

  66. CJEU case T-442/08 – CISAC, [2013] ECR-2013-00000.

  67. In this decision the CJEU criticised the Commission’s arguments from many perspectives and gave preference to the arguments of CISAC and the European Broadcasting Union (EBU) which favoured the territorial approach to the collective management of rights. The CJEU warned that the Commission criticised the monopoly position of the territorially organised network of local CMOs through reciprocal representation agreements without explaining how efficient collective management should be achieved by competition among CMOs. For details see Gotzen (2014), pp. 100–106.

  68. See analysis by Mazziotti (2011), pp. 12–14; Brownlow et al. (2008), pp. 71–72; Bonadio (2012), pp. 10–11; Guibault and van Gompel (2010), pp. 160–165; Porcin (2009), p. 60.

  69. Sometimes licensing entities were not considered CMOs at all. See infra note 76.

  70. Mazziotti states that this radical modification of the structure of online management of musical rights has mainly failed its policy objectives while making online music clearance even more complicated and legally uncertain. Mazziotti (2011), p. 3. See also Hilty and Nérisson (2009), pp. 9–11; Gotzen (2014), p. 122.

  71. See also Impact Assessment, p. 26. National licences for online use are issued by local CMOs for the local repertoire that they represent.

  72. The repertoire of one CMO acquired directly from the right owners (and not through the network of reciprocal representation agreements).

  73. Several repertoires bundled by several CMOs.

  74. See analysis by Mazziotti (2011), pp. 12–41. For different initiatives see Brownlow et al. (2008), pp. 71–72.

  75. It was recently published at http://www.celas.eu (accessed 20 August 2015) that the new arrangements will replace existing solutions where Sony/ATV and EMI Music Publishing’s respective Anglo-American catalogues have been subject to separate arrangements for pan-European digital exploitation. To date, the digital licensing of Sony/ATV’s Anglo-American catalogue has been managed by PAECOL, a subsidiary of GEMA, and the digital licensing of the EMI Music Publishing’s Anglo-American catalogue has been managed by CELAS, a joint venture between PRS for Music and GEMA. It was published that the joint-venture called SOLAR will administer a single new licence to cover the exploitation of the combined Anglo-American catalogues of Sony/ATV and EMI Music Publishing. SOLAR will provide administration services for online and mobile licensing across Europe and other regions.

  76. Moreover, it is questionable whether these new licensing entities, such as CELAS, are CMOs at all. (See MyVideo Broadband SRL v. CELAS GmBH, Munich District Court, case No. 7 O 4139/08 from 25 June 2009, in which CELAS was not considered a CMO according to German national law and therefore was not subject to supervision by the German Patent and Trademark Office). In this case, also, CELAS could not benefit from the statutory and court presumptions prevailing for collective management, but had to prove the chain of title work by work (taking the same position: Gyertyánfy (2010), p. 82). On the other hand, it could circumvent all of the preconditions provided for in Directive 2014/26/EU and the respective national law for attaining the status of “passport entity” as well as the provisions regarding transparency and government. For details of this case see von Albrecht (2009). It is possible to understand that CELAS is an “independent management entity” as defined in Art. 3 lit. b) of Directive 26/2014/EU, although, after presenting this definition, the Directive is silent about this issue. Therefore, it is not clear what the intention of the Commission was when introducing this definition. At the same time, it is questionable whether CELAS is owned or controlled by the right holders, at least indirectly and in part, since it is established by two CMOs (GEMA and PRS) which are controlled by its members – namely, right holders.

  77. Sony/ATV created the PEL initiative with SGAE (Spain) in order to administer pan-European licences for the major publisher’s Latin-American repertoire. Peer Music (representing their Latin-American repertoire) and Central and South American CMOs for Latin-American authors also participate in this initiative.

  78. Warner/Chappell Music’s Pan-European Digital Licensing initiative offering Warner/Chappell’s Anglo-US repertoire.

  79. Nordic CMO which in collaboration with affiliated CMOs (EAÜ from Estonia, AKKA/LAA from Latvia and LATGA-A from Lithuania) collectively manages music authors’ rights, both traditional and online, for the Nordic and Baltic countries. NCB’s owner CMOs are KODA from Denmark, STEF from Iceland, STIM from Sweden, TEOSTO from Finland and TONO from Norway.

  80. For details about those initiatives see e.g. Mazziotti (2011), pp. 12–15; see also Bonadio (2012), pp. 10–11; Guibault and van Gompel (2010), pp. 160–165; Porcin (2009), p. 60. The Amsterdam Initiative (16 small and medium-sized CMOs, 7 of them from Central and Eastern Europe; see http://www.authorsocieties.eu/mediaroom/96/33/Press-Release-The-Amsterdam-Initiative-16-small-amp-medium-sized-author-societies-explore-cooperation (accessed 17 November 2014)) which considers the aggregation of the repertoires and discusses the application of two solutions: the tariff of destination or unified tariffs. It estimates that the tariff of destination (which was already green-lighted by the Commission in relation to the Nordic licensing hub) is most likely not problematic in relation to competition law, while the harmonisation of tariffs could raise competition-law concerns. Using the tariff of destination inevitably means applying many different tariffs, which will create a complicated negotiation process with customers, be perceived as less valuable by customers due to increased complexity and create high costs since all data will be separated and run for each tariff scheme. Therefore the Amsterdam Initiative suggests the setting of “regional tariffs” or “tariff zones” by way of which they would achieve higher uniform rates due to savings in transactional costs. Nevertheless, it does not consider the question of applicable law and different national rules on tariff-setting in different Member States, especially the Central and Eastern ones, where the involvement and control of the state is significant.

  81. In this case the global repertoire was on the traditional basis: rights acquired directly from the right holders and rights acquired through the network of reciprocal representation agreements. This repertoire was usually licensed only in the territory of the establishment of the respective CMO.

  82. Belgian CMO for music authors and publishers.

  83. Sister CMOs or sister societies are CMOs collaborating on the basis of the network of reciprocal representation agreements within CISAC and BIEM.

  84. See Gilliéron, pp. 957–960. What the basis for this assertion should be is not defined; probably mutual obligations through the network of reciprocal representation agreements, on the one hand, and understanding that the principle of territoriality according to the laws of the country of occurrence of the act of exploitation should be applied, on the other hand.

  85. Netherlands CMOs for music performing and mechanical rights.

  86. See Guibault and van Gompel (2010), pp. 163–165.

  87. See also Impact Assessment, p. 26. This means that some CMOs and similar entities (like PAECOL and CELAS) issue pan-European licences for their repertoires from one point in Europe (mono-repertoire multi-territorial licences); other CMOs cooperate among themselves and with the publishers and aggregate their repertoire in order to issue pan-European licences, as in the PEDL initiative. On the other hand, some CMOs aggregate their repertoire and issue regional multi-territorial licences, as Nordisk does. However, in many EU Member States, especially in Central and Eastern Europe, the local repertoires and other, economically less-interesting smaller repertoires are still licensed on a mono-territorial basis by the local CMOs from which the previously mentioned foreign repertoire is withdrawn. E.g. in the case where the user is operating in Hungary or Croatia, even though he acquired the major publishers’ repertoire abroad through multi-territorial licences, he still needs a licence from the local CMO in order to acquire the local Hungarian or Croatian repertoire and other small repertoires from Central and Eastern Europe, in which the local CMOs still cooperate with Hungarian and Croatian CMOs for digital rights, on the basis of reciprocal representation agreements.

  88. See Mazziotti (2011), p. 3. See also Hilty and Nérisson (2009), pp. 9–11; Gotzen (2014), p. 122.

  89. Recitals 11 and 12 of Directive 2014/26/EU. This is not a novelty since the exclusivity clauses were already abandoned among the CISAC members. Nevertheless, the abandonment of exclusivity as such did not change the de facto situation that exclusivity is tacitly applied. See also Gyertyánfy (2010), p. 62, footnote 12.

  90. See Recital 12 of Directive 2014/26/EU.

  91. See also Porcin (2009), p. 61.

  92. See Art. 26 of Directive 2014/26/EU.

  93. See also Gyertyánfy (2010), p. 82.

  94. See the observations by Gilliéron (2006), pp. 951–952.

  95. E.g. in brief, in patent law, in enforcement proceedings, in the absence of proof to the contrary, a product shall be deemed to have been obtained by a patented process (if some additional conditions are fulfilled); in trademark law, it is presumed that the trade mark is used during a period shorter than 5 years and proof to the contrary is not allowed at all; in design law, in the registration proceedings, it is usually presumed that the design is new and has individual character and therefore registered until the design is declared invalid, etc.

  96. In Tournier a discotheque in France requested from SACEM a licence only for the foreign repertoire that was actually used. SACEM refused this request claiming that the partitioning of the repertoire and consequently partitioning of the remunerations set in the tariff was not possible. The CJEU confirmed SACEM’s practice of licensing only the global repertoire. It concluded that the refusal by a national CMO to grant the users access only to the foreign repertoire represented by it did not have the object or effect of restricting competition in the common market unless access to a part of the protected repertoire could entirely safeguard the interests of the authors, composers and publishers of music without thereby increasing the costs of managing contracts and monitoring the use of protected musical works. See Tournier, at paras. 31–33.

  97. In CISAC the CJEU pointed out that the Commission, while enforcing competition among the CMOs, did not answer the question of unauthorised use and what financial and commercial interests would induce the local CMO to cooperate in this respect with another CMO competing with it in its territory (CISAC, at para. 149). Moreover, the Commission did not answer the question of who would manage the general monitoring of the market in order to require users to request licences. If the local CMO had no guarantee of recovering – by the revenue it receives from granting licences – the expenses related to the monitoring it carries out, that activity would simply not be viable. That guarantee would be threatened if several CMOs could grant, for the same territory, licences covering the same repertoires (CISAC, at para. 150).

  98. See Art. 30(3) and (4) and Recital 46 of Directive 2014/26/EU.

  99. Art. 16(1) of Directive 2014/26/EU.

  100. Art. 16(2) and Recital 31 of Directive 2014/26/EU.

  101. See Art. 16(2)(2) and Recital 31 of Directive 2014/26/EU.

  102. See SENA, at paras. 27 and 37; Kanal 5, at paras. 28, 29, 36, 37; and OSA, at paras. 88 and 92.

  103. Except for the specific regulation that the licensing terms already agreed upon for a new type of online service which has been available to the public in the EU for less than three years are not required to be used as a precedent for the creation of other tariffs. See Art. 16(2)(1) and Recital 32 of Directive 2014/26/EU.

  104. The recent CIAM Study 14-1172, Lalonde (2014), concerning fair compensation for music creators in the digital age, presented four important conclusions regarding compensation for music creators in the online environment. It stated that music is currently undervalued by digital streaming services. The revenue split within the music industry is grossly inequitable and lacks transparency. A severe lack of transparency makes it difficult for right holders to evaluate the compensation they receive or take action to change it. And finally, it concluded that “Fair Trade” models may prove more effective in creating a “virtuous” value chain than government regulation. Very often the major users depreciate the fragmentation of the repertoire. (See, e.g. for Deutsche Telecom, Mazziotti (2011), pp. 30 and 31, footnote 163).

  105. Art. 12(1) and Recital 28 of Directive 2014/26/EU.

  106. Art. 15(1) and Recital 30 of Directive 2014/26/EU.

  107. Some academics had suggested that the territoriality of copyright is incompatible with the internal market, and therefore a structural solution is needed such as a Community copyright. See Hugenholtz (2009), p. 255, Tuma (2006), p. 229.

  108. Recital 40 of Directive 2014/26/EU.

  109. See in general Austin (2000); Dessemontet (2000).

  110. Art. 35 and Recital 49 of Directive 2014/26/EU.

  111. See also Frabboni (2009), p. 397.

  112. Art. 34(2)(a) and Recital 49 of Directive 2014/26/EU.

  113. Regulation (EC) No. 593/2008 of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations (Rome I Regulation), OJEU L 177 of 4 July 2008.

  114. For copyright contracts see Kunda and Vrbljanac (2012).

  115. See also Matulionytè (2009), p. 473.

  116. For details see Fawcett and Torremans (1998), p. 509.

  117. See Fawcett and Torremans (1998), p. 585, and Art. 9 of the Rome I Regulation. See also Goldstein (2001), pp. 110–111.

  118. See e.g. Fawcett and Torremans (1998), p. 548, where they claim that contracts that are pure licences in the sense that they only authorise someone to do an act that would otherwise be an infringement fall in their entirety under the law of the contract and that in those types of contract there are no copyright-related issues. The payment of the licence remuneration is undoubtedly part of the licensee’s obligation.

  119. Fawcett and Torremans (1998), pp. 582–583.

  120. See in particular Art. 9 of the Rome I Regulation.

  121. See e.g. the situation in Croatia. Here, it was published in newspapers that the local CMO HDS ZAMP concluded a contract with YouTube on 1 October 2014, but the amount of the remuneration was kept secret. See Jutarnji list, Busines, p. 22 “Hrvatski glazbenici sada mogu zarađivati na reklamama”. It is also not known which tariff is applied for foreign repertoire licensed through multi-territorial licences for Croatia.

  122. See Art. 8(1) of Regulation (EC) No. 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II Regulation), OJEU L 199 of 31 July 2007.

  123. See also Matulionytè (2009), p. 469.

  124. See Matulionytè (2009), pp. 474–484. This author suggested that in the future Directive on collective management the law of the country of establishment should be clearly introduced as the applicable law for collective management issues. See also Matulionytè (2011).

  125. See Matulionytè (2009) and CLIP Proposal, Sec. 6, Art. 3:603, available at: http://ec.europa.eu/justice/news/consulting_public/0002/contributions/civil_society_ngo_academics_others/european_max_planck_group_clip_en.pdf.

  126. The European Commission advocates the idea that Directive 2014/26/EU is just a beginning and that in the future, after analysis of the effects of this Directive, the new system based on the principles introduced by it for the online environment should be introduced for the non-digital environment as well.

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Copyright Acts

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  1. Faculty of Law, University of Zagreb, Zagreb, Croatia

    Romana Matanovac Vučković

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Matanovac Vučković, R. Implementation of Directive 2014/26/EU on Collective Management and Multi-Territorial Licensing of Musical Rights in Regulating the Tariff-Setting Systems in Central and Eastern Europe. IIC 47, 28–59 (2016). https://doi.org/10.1007/s40319-015-0438-5

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