The European Commission announced last Wendesday that it has decided to open formal proceedings against CISAC (the “International Confederation of Societies of Authors and Composers”) and the individual national collecting societies that are members of CISAC and has sent them a Statement of Objections (SO).
The Commission doesn't question the practice of collective administration of performing rights. The SO concerns only certain relatively new forms of copyright exploitation: internet, satellite transmission and cable retransmission of music.
With regard to these new forms of copyright exploitation, what the Commission probably envisages is competition between the national collecting societies, each of which would be allowed to recruit members and customers on a EU-wide basis.
The merit of the Commission's views requires a separate discussion. Yesterday, however, CISAC issued a press release reacting to the SO, and containing the following hilarious statement:
"CISAC regrets that the ... Commission has chosen to adopt a narrow and formalistic approach to the complex issue of the collective management of copyrights in Europe which could be detrimental to cultural diversity. Cultural creations are not comparable to ordinary goods and services, ... and the relationship between authors' societies cannot be compared to one of "inter-brand competition", as the Statement of Objections does. Competition between Societies, which benefits large users at the expense of the interests of rights holders, will inevitably lead to a decline in creators' remuneration which in turn will have a detrimental effect on Europe's cultural industries and on the vibrancy and diversity of European culture to which the Commission has publicly committed itself...".
Usually, collecting societies explain that competition in the market for performing rights is impracticable, and that collective administration is the most efficient way to administer performing rights, ultimately benefitting users. I have long been skeptical about this story and thought that the anti-competitive aspects of collective administration outweigh the benefits (you can read about it in more detail here). Yesteday's press release is a refreshing affirmation of my view. Competition isn't dismissed because the pecularities of the market render it highly inefficient. Competition between copyright holders is bad because it will lead to a decline in right-holders' income, and (God forbid) benefit consumers.
Horrendous indeed.