The management of copyright and related rights: a difficult route to a complete liberalisation

Recently, the management of copyright and related rights has been a topical subject in Italy: from a public enforcement point of view, the Italian Antitrust Authority (IAA) has been focusing its enforcement activities in this field with two abuse of dominance proceedings. In terms of legislative developments, the government has finally implemented Directive 2014/26/EU “on the collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market”.  In doing so, however, it did not take the opportunity to revisit the status of SIAE (the Italian society of authors and publishers), which still enjoys a legal monopoly in the management of copyright.

The IAA’s investigations

On 22 March 2017, the IAA closed an investigation (launched in 2016) against Nuovo IMAIE, the institution managing the rights of artists, interpreters and performers (successor of the former legal monopolist).The investigation concerned an alleged abuse of dominance in the sector for the collective management of rights related to copyright.

The purpose of the investigation was to ascertain whether Nuovo IMAIE had carried out a complex strategy to foreclose competitors that were entering into the newly liberalised markets.

The allegedly abusive conduct concerned:

• the discrimination of right-holders, who were members of competing collecting societies;
• the refusal to allow competitors to access a database of works and artists; and
• the conclusion of several reciprocal agreements of long duration with foreign collecting societies.

During the investigation, Nuovo IMAIE – assisted by Osborne Clarke – submitted a set of commitments aimed at addressing the competition concerns originally raised by the IAA, such as granting access to Nuovo IMAIE’s database on a “FRAND” (fair, reasonable and non-discriminatory) basis.

In March 2017, the IAA finally closed the proceedings, accepting the commitments and without any finding of infringement.

A few weeks after the end of those proceedings, though, on 12 April 2017, the IAA commenced a new investigation against another organisation involved in collective copyright management, SIAE.  The IAA suspected SIAE of having abused its dominant position by going beyond its monopoly rights and thereby hindering the activities of other operators concerning services ancillary to copyright management.

The IAA has stated that the investigation also intends to establish whether SIAE’s alleged conducts are ascribable, in all or in part, to the national copyright law providing for SIAE’s monopoly and, if so, whether such national legislation should be disapplied as incompatible with the EU legal framework. This investigation remains on-going at the time of writing.

The implementation of Directive 2014/26/EU

On 15 March 2017, the Council of Ministers approved the legislative decree implementing Directive 2014/26/EU, which aims to coordinate the national rules concerning access to the management of copyright and related rights by collective organizations, their governance, and the supervisory framework.

In line with the Directive, the legislative decree specifies:

• the requirements applicable to collective management organisations concerning governance, financial management, transparency and reporting;
• the criteria for the multi-territorial licensing of rights in musical works for online use in the Member States; and
• the powers of control of the Italian Communications Authority.

In this respect, it is worth noting that, back in 2016, the IAA had submitted an opinion to the Italian Parliament and government on the draft bill, remarking, among other things, that SIAE’s current monopoly in the management of copyright restricted the freedom of other market operators to do business, as well as the freedom of choice of users.

However, the government decided not to take the opportunity offered by the implementation of the Directive and did not make any changes to SIAE’s functions and role.

It will be interesting to see how the IAA’s investigation against SIAE will end, and whether this will prompt any further action by the Italian legislator on SIAE’s legal monopoly.