The Economic Defense Administrative Council (Conselho Administrativo de Defesa Econômica), or CADE, held the Central Office for Collection and Distribution (Escritório Central de Arrecadação e Distribuição), or ECAD, and six other associations related to the music industry liable for acting as a cartel in the copyright market in relation to the public performance of music, literary-musical works and recordings. It entered this decision at an administrative hearing on March 26, 2013.

The administrative proceeding began in 2010 to investigate whether competitors were engaged in price-fixing for copyright and creating barriers to the establishment of new associations.

ECAD and the other associations under investigation defended themselves against the charges, claiming, among other things, that consolidated management of the collection and distribution of copyright results from the law and that there is therefore no economic basis for forming a cartel. They also claimed that negotiating the amounts paid with the copyright holders or associations and the payment of different amounts for copyrights to each association would not be practicable.

CADE’s decision accepted the argument presented in the opinion of the Specialized Federal Attorney General’s Office for CADE, holding that Brazilian Copyright Law gives ECAD a legal monopoly exclusively over collecting and distributing copyright amounts owed for the public performance of music, literary-musical works and recordings, but not the right to establish the amount to be charged for those rights jointly with the associations.

CADE imposed a fine on ECAD and each of the associations that was party to the administrative proceeding for having formed a cartel and other conduct described in article 21 of Law 8,884/94. It also forbade them from creating and imposing unilateral pricing. This opens up the possibility of bilaterally negotiating agreements with users or associations of users. CADE also required the parties to the proceeding to abstain from imposing fixed contractual terms under a blanket license and instead allow the negotiation of partial licenses whenever this is in a user’s interest.