Précis The European Commission has adopted a proposal for a directive that will address the current perceived deficiencies relating to the collective management of copyright and related rights, as well as the multi-territorial licensing of rights in musical works for online uses in the internal market.

What? According to the European Commission’s press release, the directive has two complementary objectives:

  1. The Commission is keen for collecting societies to become more transparent in their operation, with emphasis placed on the best interests of the rights holder. The proposed legal framework will specifically require the collecting societies to be more efficient in the management of rights, to facilitate quicker remuneration for the rights holders and to publish an annual transparency report.
  2. The directive will seek to protect musical works online by ensuring that collecting societies monitor online usage more effectively and distribute royalties accordingly. This is of particular importance as the Featured Artists Coalition (“FAC”), which includes high-profile musicians such as Radiohead and Pink Floyd, claims that European collection agencies are sitting on an estimated pot of £3.93 billion in “hard to distribute royalties”. In an attempt to ensure greater transparency is achieved, the directive proposes that collecting societies must implement dispute resolution and complaint procedures to ensure that they are more accountable to the rights holders.

The directive is intended to harmonise the position across member states by stipulating minimum requirements. Member states will have some discretion as to whether they choose to impose more demanding requirements on collection agencies.

So what? The Commission hopes that the directive will encourage more efficient running of multi-territorial licensing. However, it has already been subject to criticism from some of those it seeks to protect. The FAC has suggested that the directive falls short of the mark because the directive only seeks to protect online activity, which accounts for only 5 per cent of royalty revenue. Other streams of revenue, such as music played in bars and other premises, are not considered. Mark Kelly, of British rock band Marillion, has stated that:

“The European Commission has failed to deliver on its promises of protecting the rights and interests of artists ensuring the collective management of our rights would be accompanied by strong guarantees, including regular payments and complete information on the use of our works”.

The FAC has started a public relations campaign to oppose the proposals and is planning an online petition of artists to call on members of the European Parliament MEPs for changes.

Other commentators are suspicious that the Commission is seeking more and more to harmonise copyright law across the EU.