The Santiago Agreement was signed in October 2000 by five
collecting societies, including the Performing Rights Society (PRS)
from the UK and Broadcast Music Inc from the US.
The Agreement is designed to tackle the problems that
traditional copyright licensing schemes face in light of the growth
of new technologies and internet use. The most obvious of these is
territoriality, or lack of it, for once uploaded to the internet,
copyrighted music is accessible from almost anywhere in the
world.
The traditional licensing framework requires a commercial user
wishing to offer such music to obtain a copyright licence from
every single relevant national society. The Santiago Agreement
sought to adapt the traditional framework to the online world by
allowing each of the participating societies to grant "one-stop
shop" copyright licences which included the music repertoires of
all member societies and which were valid in all their
territories.
The Agreement was notified to the Commission in April 2001 by
the collecting societies of the UK, France (SACEM), Germany (GEMA)
and the Netherlands. These were subsequently joined by all
societies in the European Economic Area (except for the Portuguese
society (SPA) and the Swiss society (SUISA)).
The proposed commitments would affect only BUMA and SABAM
the Dutch and Belgian organisations that collect music royalties on
behalf of music authors. In terms of the commitments BUMA and SABAM
would end their involvement in restrictions on the cross-licensing
arrangements for online music that they have with other
societies.
This follows a warning by the Commission that the agreement,
known as the Santiago Agreement, might be in breach of EU
competition rules.
In April the Commission sent a "Statement of Objections" to each
of the EU collecting societies party to the Agreement, explaining
that while it strongly supports the "one-stop shop" principle for
online licensing, it also considers that such crucial developments
in online-related activities must be accompanied by an increasing
freedom of choice for EU consumers and commercial users as regards
their service providers.
According to the Commission, the structure put in place by the
parties to the Santiago Agreement results in commercial users being
able to apply for the licence from only the collecting society
established in their own Member State. This, says the Commission,
could be in breach of competition rules.
In response BUMA and SABAM have now put forward commitments that
will oblige them not to be party to any agreement containing an
“economic residency clause”.
The proposals have been put forward for consultation, prior to
formal approval by the Commission.
The proceedings against the other collecting societies targeted
by the Commission’s statement of objections are continuing,
although the Commission has confirmed that it will look at any
proposal on commitments that other collecting societies may
submit.
“Online distribution brings many benefits to artists and to
consumers,” said Competition Commissioner Neelie Kroes. “I am
committed to ensuring that the licensing system does not hamper the
development of a genuine European single market between collecting
societies to the benefit of these artists and consumers.”
