Comments of the Max Planck Institute for Intellectual Property and Competition Law on the Proposal for a Directive of the European Parliament and of the Council on Collective Management of Copyright and Related Rights and Multi-Territorial Licensing of Rights in Musical Works for Online Uses in the Internal Market COM ( 2012) 372

The Max Planck Institute welcomes the initiative of the European Commission for a binding legal instrument on collective management of copyright and related rights in the EU. Numerous provisions are to be appreciated. Yet the Commission seems to fail to take account of the full legal framework and factual circumstances that have structured the current system of collective rights management. Disposing of natural monopolies in a two-sided market, collecting societies should not refuse to grant access to their services to rightholders and users. Hence, it is strongly recommended that the European legislature follows the experience of numerous Members States and proposes an obligation to contract with rightholders as well as with users. The critique on the Commission's approach to cross- border licences for online rights on musical works as set forth in the Recommendation of 2005 has unfortunately not been duly considered and the Commission's assessment of the practical effects of the Recommendation is mistaken. Differences of substantive copyright law among Member States still constitute an obstacle to the establishment of an internal market for works. This is why the Institute deems the Commission's sectorial approach to the regulation of cross-border licensing to be problematic. Also such regulation would require further harmonisation of substantive copyright law. Moreover, the Proposal fails to take account of statutory remuneration rights and cases of mandatory collective management. Both pursue specific protection of original rightholders. In this regard the Proposal's refusal to distinguish between different categories of rightholders raises concerns. Since collecting societies manage copyrights and related rights arising from national law, and considering the benefits of an authorisation system, which can be found in several Member States, the Institute advises the European legislature to clearly state that the intellectual property exception of Art. 17( 11) of the Service Directive applies to collecting societies. The Proposal endangers the balance both between different categories of rightholders and between rightholders and users that the established system of collective management of copyright in Europe traditionally seeks to achieve. It thereby compromises the laudable goal to foster the establishment of an internal market for online uses of works across Europe.