On 16 June 2015, the EU Commission conditionally approved the proposed joint venture between music collective management organisations PRS for Music Limited ("PRSfM") of the UK, Föreningen Svenska Tonsättares Internationella Musikbyrå u.p.a. ("STIM") of Sweden, and Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte ("GEMA") of Germany. The joint venture will provide multi-territorial online music licenses for users and related copyright administration services to rightholders and other collecting societies.

Collective management organisations ("CMOs") represent the combined copyrights of their members, with one society typically managing a given right or set of rights for all artists in a given country, collectively constituting that society's repertoire.  Traditionally, societies allow the licensing of their repertoire on a country-by-country basis through individual agreements with the corresponding CMOs in each country.  The parties' joint venture seeks to offer multi-repertoire multi-territorial licenses for online platforms, that is, licenses covering multiple CMOs' repertoires and applicable for use in multiple countries.

Consequently, in the market for multi-repertoire multi-territorial licensing to users, the Commission found no concerns, as the parties had previously offered distinct repertoires, and the combined repertoire offered by the joint venture was considered to constitute a new product. Furthermore, the Commission determined that it should not be possible to charge higher royalty rates for the combined repertoire than for the parties' individual repertoires.

However, in the market for copyright administration services, such as the collection and processing of royalties from online platforms and the provision of database services, the Commission had several concerns. These concerns related primarily to so-called "Option 3 publishers", which license certain rights directly rather than through CMOs but rely upon CMOs for administration services. 

First, the Commission was concerned that the joint venture could force Option 3 publishers to use the joint venture's services rather than those of other providers.  Second, because PRSfM controls certain types of rights matching those held by Option 3 publishers but allows the publishers to license them together, the Commission was concerned that the joint venture would have an incentive to pressure Option 3 publishers to use its services. Third, the Commission was concerned that the joint venture could make it more difficult for customers to source certain services from competitors, either by prohibiting customers from doing so or by bundling certain kinds of administration services.

The parties therefore agreed to a package of behavioural commitments to address the Commission's concerns regarding copyright administration services:

  • First, PRSfM agreed not to leverage its control over certain rights to force Option 3 publishers to use the joint venture's services.
  • Second, the parties agreed to leave other CMOs and Option 3 publishers free to choose which administration services they want to use. 
  • Third, the joint venture agreed to offer key services to its customers on fair, reasonable, and non-discriminatory terms as compared to the terms offered to the joint venture's parents.
  • Finally, the joint venture agreed to measures to ensure that customers remain effectively free to source only some copyright administration services from the joint venture and to contract with and even to switch to other providers for other services. These measures included a ban on exclusive contracts, the freedom for customers to terminate their contracts at any time, and the interoperability of the joint venture's database with third party processing solutions.

Based on these commitments, the Commission determined that the market remained open for entry by competing providers, such as other CMOs.  It concluded that there were no further concerns and approved the creation of the joint venture, subject to the parties' commitments.

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