EU Steps Towards Single Market for Digital Music Licensing, Copyright Royalty Overhaul

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By Joe Kirwin

BRUSSELS--On July 9, the European Union took an important step toward establishing a single market for online music distribution and a more efficient system for managing and distributing copyright royalties when the European Parliament's Committee for Legal Affairs approved changes to the current fragmented system in the 28 member states.

Designed to ease the country-by-country licensing process that online music services such as Spotify and iTunes have to abide by, the pending proposal would allow for a single agreement with a collective rights management agency covering the entire EU single market. At the same time the legislation would expedite the time in which copyright holders get paid via the collective management agencies.

“This proposal is a key to create a digital single market,” MEP Marielle Gallo (EPP-France), a member of the conservative European People’s Party and the individual steering the legislation through the EU law-making body, said. “Simple and transparent licensing of copyright means more legal offers and easier access to online content for consumers. … This reform also ensures remuneration for artists and will develop new business opportunities.”

Currently, online music providers have to sign agreements with collective management groups in each of the 28 EU member states, which the European Commission insists has severely retarded digital music commerce in the EU, especially compared to the United States.

The European Parliament committee amendments received a rare unanimous vote in the committee as it passed 21 in favor with no vetoes and no abstentions. Previously, the issue of digital copyright has caused intense divisions in the EU and that was never more apparent then when the European Parliament vetoed the Anti Counterfeiting Trade Agreement.

“It is the first time in the European Parliament we have managed to have a consensus on the usually extremely sensitive topic of copyright,” Gallo said. “We have proven that when we put aside ideology it is possible to find solutions to clearly defined concerns over copyright and clinch a deal that everybody from conservatives to the Pirate Party can support.”

Assembly Approval Expected After Negotiation
With the unanimous vote the proposal is all but assured to be approved by the European Parliament's General Assembly. However before there will be a vote, the European Parliament must negotiate with the EU member states in the Council of Ministers to find a compromise agreement.

Besides making it easier for online music providers to distribute music across the 28 EU member states, the European Parliament-backed proposal also is designed to improve the governance and transparency of collecting management societies that act as agents for copyright holders. A key change approved by the European Parliament Committee for Legal Affairs would require the collective societies to reimburse copyright holders within three months. The European Commission proposal called for a 12-month limit.

The European Parliament also approved amendments that would open up the boards of collective management societies to lawyers and agents, a move opposed by the European Grouping of Societies of Authors and Composers, which represents the national royalty management groups in the different EU member states.

“By opening the door to external lawyers and agents into the general meetings of authors societies the European Parliament distorts the specifities of those societies that are formed, controlled and managed by the authors themselves,” GESAC said in a statement. “We urge EU institutions to restore and guarantee the control of creators in decision making of their societies.”

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