Commission proposal for a Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market Internal Market and Services DG Unit D1 - Copyright 15/11/2018

Overview I – Current status II - Governance & Transparency III - Multi-territorial licensing of author's rights in musical works for online use ("MTL") IV – Enforcement provisions 15/11/2018

I – Current status July 2012: Commission adopted proposal for Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market Since September 2012 discussions Under Cypriot and Irish Presidency of Member States in the Council In the European Parliament (lead Committee: JURI) October 2012 - European Council conclusions: work on the proposal should be accelerated to achieve a fully functioning Digital Single Market 15/11/2018

II – Governance & Transparency: Identified problems difficulties in joining foreign CS obligations to entrust all rights, for all territories, etc. discrimination of foreign members limited membership rights of publishers limited access to annual reports limited information on cross-border royalty flows late distribution of royalties risky investments unclear rules on the use of non-distributed income 15/11/2018

II – Governance & Transparency: consequences of identified problems Concerns as to management and handling of revenues in some CS Less revenue for rightholders Less incentives to create Less innovation for consumers 15/11/2018

II - Governance & Transparency: Main provisions Apply to ALL collecting societies (whatever category of rightholders they represent, whatever rights, remunerations, compensations they manage) Membership of collecting societies Participation of rightholders in the decision-making process Handling of funds Relations with other CS and users Transparency and financial reporting 13/09/2012

II - Governance & Transparency: Selected issues Article 3 (note: current definition from compromise proposal of Presidency) – Definition of a collective management organisation (in COM proposal: collecting society) 'collective management organisation' means any organisation authorised by law or by way of assignment, licence or any other contractual arrangement to manage copyright or rights related to copyright on behalf of more than one rightholder, for the collective benefit of those rightholders as its sole or one of its main purposes, and which is: (i) owned or controlled by its members, or (ii) organised as a not for profit organisation. 15/11/2018

II - Governance & Transparency: Selected issues Article 5 – Rights of rightholders Mandates by rights, categories of rights, types of works, territories Rights' withdrawal (in the same manner as mandates), notice not exceeding 6 months Article 12 - Distribution of royalties Accurate & timely (12 months from the end of the financial year in which the rights revenue was collected) Rules on non-distributable income 15/11/2018

II - Governance & Transparency: Selected issues Art. 16 – RIGHTHOLDERS, on the management of their rights Art. 17 – OTHER CS, on the management of rights under representation agreements Art. 18 – RIGHTHOLDERS, MEMBERS OTHER CS & USERS, on request Art. 19 – THE PUBLIC (on-going disclosure of certain information) ANNUAL TRANSPARENCY REPORT (Art. 20 + Annex I) Transparency & financial reporting Different levels of information obligations vis-à-vis 15/11/2018

III – MTL: Licensing of music rights for online uses Online music service provider needs to clear Authors' rights Authors' collecting societies Record producer's rights Record producers Performers' rights Record producer 15/11/2018

III - MTL: Identified problems fragmentation of repertoire (CS/publishers) lack of data processing infrastructure adjusted to per-use/per-work reporting identification of repertoire identification of rights that can be licensed identification of territories in which rights can be licensed inaccurate invoicing leading to over-payments for the same repertoire, same rights, same territory legal uncertainty complex and costly licensing system 15/11/2018

III – MTL: consequences of identified problems Many collecting societies not prepared to engage in MTL online licensing Difficulties for service providers when clearing rights for online services Less innovative music services available to consumers across the EU 15/11/2018

III – MTL: Selected issues Capacity to grant multi-territorial licenses CS granting multi-territorial licenses Accurate identification of multi-territorial repertoire on a per-work basis Accurate & timely payment to rightholders Accurate reporting on the use of repertoire by electronic means Timely & accurate invoicing by collecting societies on a per-work basis 15/11/2018

III – MTL: Selected issues What can a CS do if it does not fulfill the requirements for MTL? CS can conclude a representation agreement with other CS on non-exclusive basis (Article 28) Under certain circumstances obligation to represent another CS (so-called TAG-ON obligation - Article 29) If a CS does not provide MTL or enter into representation agreement after one year after transposition date: rightholders may choose to mandate another CS/other entity/license individually for MTL (Article 30) 15/11/2018

III – MTL: Other provisions Application of certain provisions to entities owned in whole or in part by CS Flexibility of licensing terms required to encourage the granting of licences to innovative online services Derogation for online music rights required for radio and TV programmes (simulcasting, catch-up TV) Necessity for MS to ensure that compliance with the requirements of Title III can be effectively reviewed by competent authorities (complaints, sanctions and measures) 15/11/2018

IV – Enforcement provisions CS to provide complaint procedures to members and rightholders MS will need to have appropriate mechanisms for solving disputes between collecting societies & users Alternative dispute resolution for purposes of multi-territorial licensing of online music rights MS to ensure compliance with directive; sanctions and measures MS and COM will cooperate to ensure monitoring of the compliance of collecting societies with rules on multi-territorial licensing 15/11/2018

Thank you for your attention! 15/11/2018