Despite its small size, Belgium is a real hotspot for music lovers. It has some world-class concert venues and is the home of countless – some of which are award winning – festivals that cover the entire music spectrum and attract hundreds of thousands of national and international visitors each year.
Organising a concert or festival requires hard work and comes with responsibilities. One of the tasks for an organiser is clearing the copyrights for the music played at the event. In most cases, such clearance is sought via copyright collecting societies, such as SABAM in Belgium.
In 2017, SABAM – which has a monopoly for music author rights – unilaterally decided to increase its tariffs for festivals and concerts. Over thirty organisers joined forces and brought proceedings against SABAM for unfair market practices and abuse of dominant position.
The dispute has been taken to the European level, following two recent judgments. Both the European Commission and the Court of Justice of the EU (‘CJEU’) have been asked to ‘shine a light’ on SABAM’s tariffs.
1. First instance: SABAM’s tariffs are unlawful
On 12 April 2018, the Dutch-speaking Commercial Court of Brussels ruled in favour of the organisers. The Court found that SABAM was indeed guilty of unfair market practices and had abused its dominant position, by, among other things, “(i) increasing the tariffs for festivals to a considerable level (by up to 37%), (ii) refusing to deduct costs other than reservation costs, VAT, municipal taxes, public transport costs from the basis for calculating the fees, (iii) failing to take sufficient account of the number of works from Sabam’s repertoire that are performed and (iv) applying very high minimum tariffs that are disproportionate to the works that were performed.”
2. Appeal: ‘amicus curiae’ requested from the Commission
SABAM appealed the Commercial Court’s judgment. In its judgment of 10 April 2019, the Court of Appeal of Brussels decided to stay the proceedings to request an ‘amicus curiae’ (i.e. a non-binding opinion) from the European Commission. More specifically, the Court has requested the Commission to:
– give its opinion on SABAM’s tariffs and tariff structure in light of the prohibition set out in Article 102 TFEU, in particular to compare the tariffs and tariff structure of SABAM with those of other collective societies with a similar objective to that of SABAM and which have a monopoly in the EU, together with a substantive opinion on whether there is an infringement of competition law (Article 102 TFEU); and
– provide for information of a procedural nature, more specifically whether the Commission is aware of similar cases or of any litigation or measure that might be pending at the European Union level.
3. Parallel proceedings: referral to the CJEU for a preliminary ruling
In another case between SABAM and two other festivals, the Commercial Court of Antwerp decided to stay the proceedings as well and to refer the case to the CJEU for a preliminary ruling. The two questions that have been referred are:
“Should Article 102 TFEU, whether or not read in conjunction with Article 16 of Directive 2014/26/EU
on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market, be interpreted as meaning that there is an abuse of a dominant position when a collecting society which has a factual monopoly in a Member State applies a remuneration model based, inter alia, on the turnover of organisers of musical events in respect of the right to communicate musical works to the public,
1. using a fixed ‘disc’ rate instead of a rate which takes account of the precise share (using ever evolving technical means) of the repertoire protected by the collecting society in the music played during the event?
2. that licence fees also depend on external elements, such as the income price, the prices of consumptions, the artistic budget for the performers and the budget for other elements, such as décor?”
4. Up next: the waiting game
It will be interesting to see how the European Commission fulfills its role as ‘amicus curiae’ of the Brussels Court of Appeal and what the CJEU’s answer will be to the request for a preliminary ruling from the Antwerp Commercial Court, as they might no doubt also have an impact on the practices of and complaints and proceedings launched against other collecting societies in the EU.
Carmen Verdonck – Partner
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