1. Establishment and Status of Collective Management Organizations in the EU Victoriano Darias

2. References to CRM in Copyright Directives  Directive 93/83 (Satellite and Cable);  Directive 2001/29 (Copyright in the Information Society);  Directive 2001/84 (Resale Right);  Directive 2004 /38 (Enforcement);  Directive 2006/115 (Rental and Lending Rights);  Directive 2011/77 (Term of Protection);  Directive 2012/28 (Orphan Works);

3. References to CRM in ECJ Cases  Case 123/73 (BRT v. SABAM);  Case 22/79 (Greenwich Film Production v. SACEM);  Case 7/82 (GVL v. Commission);  Case 402/85 (Basset v. SACEM);  Case 395/87 (Ministère Public v. Jean-Louis Tournier);  Joined Cases 110/88, 241/88 and 242/88 (François Lucazeau v. SACEM);  Case 52/07 (Kanal 5 Ltd. TV 4 AB v. STIM).

4. References to CRM in Competition Cases (DG COMP)  GEMA I and II (71/224 y 72/268);  GVL (81/1030);  GEMA Statutes (82/204);  Daft Punk (COMP/C2/37.219);  IFPI Simulcasting (COMP/C2/38.014);  The Cannes Extension Agreement (COMP/C2/38.681);  CISAC (COMP/C2/38.698)*.

5. 2004 Communication on the Management of Copyright and Related Rights  Identified that the Establishment and Status of CMOs required a legislative approach at EU level:  “[A]s collecting societies, in their role as rightholders’ trustees, have particular responsibilities due to the economic, cultural and social functions they fulfil, the establishment of a collecting society should be subject to similar conditions in all Member States.”  “In order to promote good governance, common ground appears to be required at Community level in relation to the persons that may establish a society, the status of the latter, the necessary proof of efficiency, operability, accounting obligations, and a sufficient number of represented rightholders. ”

6. 2005 Recommendation on the Management of Online Rights in Musical Works  No specific reference to the Establishment and Status of CMOs;  Only a very general reference: “Member States are invited to take the steps necessary to facilitate the growth of legitimate online services in the Community by promoting a regulatory environment which is best suited to the management, at Community level, of copyright and related rights for the provision of legitimate online music services.”

7. Draft Directive on Collective Management of Copyright and Related Rights  Recital 7: “The Directive should aim at coordinating rules concerning the access to the activity of managing copyright and related rights by collecting societies, the modalities of their governance, and their supervisory framework […].”  Title II establishes organisational and transparency rules which apply to all types of CMOs;  However, no rules on establishment and status of CMOs have been included;  The only reference to authorisations for the establishment of CMOs can be found in footnote 43 of the Impact Assessment, in relation to Directive 2006/123 (Services Directive): “Some MS that required authorisation for the establishment of collective rights managers have amended the criteria for authorisation and related procedures in order to comply with the Services Directive. Discriminatory requirements have been eliminated, criteria have been clarified and procedures have been simplified.”

8. Directive 2006/123 (Services Directive)  The Services Directive is applicable to CMOs;  In theory, legal monopolies are excluded (art. 1.3), but the Commission warned the Hungarian Government of its intention to start infringement procedures against any country where collective management is considered a legal monopoly;  Authorisation schemes are allowed if:  No discrimination;  Justified by an overriding reason relating to the public interest;  Cannot be attained by means of a less restrictive measure, in particular because an a posteriori inspection would take place too late to be genuinely effective.

9. Directive 2006/123 (Services Directive)  An overriding reason relating to the public interest can be:  Intellectual Property;  Cultural Policy Objectives.  Does Intellectual Property include its management?  Regarding the Intellectual Property Rights Derogation of the Free Movement of Services, The Handbook on Implementation of the Services Directive says it is not applicable to management services, such as those provided for by CMOs;  However, in its assessment of the implementation of the Services Directive by MS, authorisation schemes have been permitted.

10. Directive 2006/123 (Services Directive)  Authorisation schemes shall be based on criteria which preclude the competent authorities from exercising their power of assessment in an arbitrary manner:  Non-discriminatory;  Justified by an overriding reason relating to the public interest;  Proportionate to that public interest objective;  Clear and unambiguous;  Objective;  Made public in advance;  Transparent and accessible.  Refusal or withdrawal of an authorisation, shall be fully reasoned and shall be open to challenge before the courts or other instances of appeal.

11. Directive 2006/123 (Services Directive)  An authorisation shall not be for a limited period, except where:  the authorisation is being automatically renewed or is subject only to the continued fulfilment of requirements;  the number of available authorisations is limited by an overriding reason relating to the public interest, or  a limited authorisation period can be justified by an overriding reason relating to the public interest.

12. Directive 2006/123 (Services Directive)  Authorisation procedures and formalities shall be:  Clear, made public in advance and be such as to provide the applicants with a guarantee that their application will be dealt with objectively and impartially;  Not be dissuasive and shall not unduly complicate or delay the provision of the service (easily accessible, reasonable and proportionate charges);  Application to be processed as quickly as possible and, in any event, within a reasonable period which is fixed and made public in advance;  Failing a response within the time period authorisation shall be deemed to have been granted;  In case of incomplete application or when a request is rejected because it fails to comply with the required procedures or formalities, the applicant shall be informed as quickly as possible.

13. Directive 2006/123 (Services Directive)  Prohibited Requirements applicable to CRM:  Discriminatory requirements;  Prohibition on having an establishment in more than one Member State;  Authorisation subject to proof of the existence of an economic need or market demand, an assessment of the potential or current economic effects of the activity or an assessment of the appropriateness of the activity in relation to the economic planning objectives set by the competent authority ( Exception : planning which serves overriding reasons relating to the public interest (IP);  Direct or indirect involvement of competing operators, including within consultative bodies, in the granting of authorisations.

14. Authorisation Schemes for CMOs in EU Member States  As indicated earlier, no harmonisation. Different models in different Member States. Seem to be accepted by the European Commission;  Some MS have no authorisation schemes specific for CRM. CMO are just subject to the general obligations of company law regarding establishment. Examples:  Sweden;  Lithuania;  United Kingdom:

15. Authorisation Schemes for CMOs in EU Member States  Some MS have no specific authorisation schemes, except for certain CRM operations:  Finland:  CMOs are regarded as associations (non profit purpose) and have to be registered in the National Register Associations, in order to operate;  Authorisation by the Finnish Ministry of Culture and Education needed if a CMO wishes to assume a status as a licensing CMO in an extended collective licensing scheme.  Spain (new Bill):  Authorisation is only needed to perform compulsory collective management activities.

16. Authorisation Schemes for CMOs in EU Member States  Prior authorisation is quite widespread in the EU Member States;  With more or less strict procedures we see such regimes i.a. in France, Germany, Latvia, Luxembourg, Greece, Belgium, Hungary, Ireland, Poland, Denmark, Finland (for extended collective management), Spain (with the new Bill, only for compulsory collective management) and Slovakia;  The authorisation mechanisms vary from country to country, but they usually have some similarities.

17. Authorisation Schemes for CMOs in EU Member States  Written application to the competent authority with information on the CMO-to-be and proof of fulfilment of requirements:  By-laws;  Information of its membership and rights to be managed(number of members, entrustment of rights, etc.);  Information on the resources of the CMO-to-be (financial resources, staff, seat, etc.);  Information on the representatives (management), which may need to fulfil certain requirements themselves in terms of experience;  Sometimes, information on distribution rules.

18. Authorisation Schemes for CMOs in EU Member States  The competent authority is often the Ministry of Culture or the Ministry in charge of Copyright;  Sometimes other Ministries are in charge (Ministry of Economics (Belgium);  In certain countries it is the task of other public bodies:  Patent and Trademark Offices (Germany, Hungary, Ireland). In the German case with the Federal Cartel Office;  It is common that the authorisation be explicit, but there are exceptions (no reply equals authorisation): France (except CMOs engaged in compulsory CRM), Spain (new Bill);  Recourse to courts or other means of contradictory procedure in case of withdrawal or denial of authorisation.

19. Legal Forms and Status of CMOs  No uniform approach:  Limited Liability Companies (PRS and PPL in the UK);  Subsidiary of other organizations (MCPS is a subsidiary of the Music Publishers Association in the UK);  Limited Liability Collective Companies (SABAM in BE);  Civil Societies with Variable Capital (SACEM in FR);  Not-for-profit associations (SGAE in ES, BUMA in NL, TEOSTO in FL, Artisjus in HU, ZAIKs in PL);  Foundations (STEMRA in NL);  Ad hoc legal forms (SIAE in IT (Economic Public Body of Associative Nature));  In some countries, they can have different legal forms. In Germany some CMOs are economic not-for-profit associations, while others are limited liability companies.

20. Monopoly Status of CMOs  The Commission does not seem to have an issue with the legal form, but it may have an issue with legal monopolies;  In some countries, CMOs are public bodies with a legal monopoly status:  Italy:  SIAE is an “economic public body of associative nature”, which is entrusted, on an exclusive basis, the management of a variety of rights (exclusive rights, rights of mandatory collective management and rights to equitable remuneration);  It also performs other tasks, e.g.: SIAE keeps a Public Register of the Cinematographic Works and a Register of software.

21. Monopoly Status of CMOs  In others, although societies are not public bodies they may enjoy some sort of monopoly status (Latvia, Belgium (for Private Copying and Reprography levies));  In Greece, while there may be no specific provision, authorising bodies may be reluctant to authorise more than one CMO per category of rights holders.

22. The Authorisation Scheme in the Republic of Macedonia  The law is generally in line with acquis communautaire;  No major differences with other EU countries;  Two points that might require consideration:  The need to include an assessment for economic justification in the documentation (Art. 148(2));  The limitation of one CMO per category of rights (Art. 149(2)).

23. The Authorisation Scheme in the Republic of Macedonia  The need to include an assessment for economic justification in the documentation (Art. 148(2)):  Could be at odds with Art. 14 of the Services Directive:  Prohibition that an authorisation be “subject to proof of the existence of an economic need or market demand, an assessment of the potential or current economic effects of the activity or an assessment of the appropriateness of the activity in relation to the economic planning objec tives set by the competent authority”;  Exception: “planning requirements which do not pursue economic aims but serve overriding reasons relating to the public interest ” (which includes IP and cultural policy);

24. The Authorisation Scheme in the Republic of Macedonia  The limitation of one CMO per category of rights (Art. 149(2)):  Exists (or existed) in some EU Member States;  The Commission warned the Hungarian Government of its intention to start infringement procedures against any country where collective management is considered a legal monopoly;