The European Commission has warned organisations that collect music royalties that they could be breaching EU competition rules.
The commission is concerned specifically about the collection of royalties from music on the internet. The various national collecting societies around the EU agreed between them a deal to govern the collection of internet royalties, the so-called Santiago Agreement. That deal was notified to the commission for approval three years ago.
The commission can see some merit in the agreement, because it offers the prospect of obtaining a single licence to play music across the whole European Economic Area, whereas under the old arrangements for licensing a commercial user would had to obtain a copyright licence from every single relevant national society.
In Ireland, the collecting society for these performing rights is the Irish Music Rights Organisation, IMRO, which is a party to the Santiago agreement.
The Commission has now written to IMRO and the others setting out its objections. The commission is not persuaded that the deal is justified in preserving the territories and monopolies that the societies have enjoyed for offline music.
"What we would like to see is competition between collecting societies. We don't see any reason why national monopolies should be preserved," said Ms Amelia Torres, spokeswoman for the European Commission for Competition.
Commission officials argue that the one-stop shop approach should be accompanied by a greater freedom of choice both for commercial users and consumers.
They suggest that where a company is going to set up a website in, for instance, Denmark, to make music available via the internet (whether to be downloaded or streamed), then the company should be able to choose its collecting society.
"The structure put in place by the parties to the Santiago Agreement results in commercial users being limited in their choice to the monopolistic collecting society established in their own member state," Ms Torres said.
The collecting societies have been given six weeks to reply to the commission's objections. They can also request a hearing at which to present their arguments.
