Mandatory remuneration payable via collective rights management: when did this measure become consensual?


Comments on some of the copyright objectives of the Coalition Agreement 

At Digital Republic, we are following with interest the work of the coalition partners in the areas of digitisation and access to education and culture. In recent days, we have come across a few things in the Coalition Agreement that have caused some questions within our team.

Today we would like to share our puzzlement over the underlying objectives in the copyright area according to para 5 of Annex 9 (page 57). According to it, the coalition partners had reached a consensus on “amending the Copyright and Related Rights Act in relation to Directives 2019/789 and 2019/790 and other matters”. As a reminder, a proposal for the transposition of these two European Directives has gone through all phases of expert and public consultations and is ready to be submitted in Parliament. Surprisingly, the objectives set out in para 5 of the Coalition Agreement go beyond this proposal and beyond the transposition of the two directives. The proposals are entirely in favour of collective management societies (CMOs).

Particularly worrying is sub-clause 1a of para 5, according to which the parties have agreed to introduce a mandatory, irrevocable and non-transferable right of remuneration for authors payable by users and collected by the CMOs – for the broadcast, transmission, retransmission, and online use of works.

It is difficult to decipher the intentions of the coalition partners, especially since we haven’t noticed an agreement on such a policy to have been formulated in the negotiations held within the Culture portfolio at the end of November. After re-watching the conversation, we found out that Mr. Plamen Nikolov spoke about specific amendments to the Copyright Act at 55:00 min. of the recording (we find Mr. Nikolov’s ideas rather chaotic), and after him, Mr. Karimanski spoke about mandatory remuneration, but only for the retransmission of audiovisual works. Regardless, we are now apparently faced with a “consensus” over sub-clause 1a, which is different from point 1b (compulsory collective management of retransmission rights). Maybe we are missing part of the discussion, or maybe there was a mistake in the coverage of the decisions taken? Hopefully, this is not a newly formulated policy.

What we can see, however, is that the exact same measure was proposed within the public consultation on the Ministry of Culture’s proposal for the implementation of Directives 2019/789 and 2019/790 earlier this year (and rejected by the Copyright Directorate’s legal team) by several Bulgarian CMOs (see Filmauthor’s suggestions here). 

The way it is formulated in the Coalition Agreement, the commitment in item 1a implies putting collecting societies in a position to collect payments for every use of every work on the internet. Such a measure benefits CMOs in a highly disproportionate way, with no regard for the autonomy of the will of the authors themselves and the public interest. It would deprive authors of the right to negotiate directly with exploiters and users, let alone to communicate their work free of charge, under an open license. The objective thus completely ignores the existence of an open licensing culture (incl. regarding open source software) or EU open access policies.

To illustrate our concerns with a specific case, we’ll mention a landmark French case from a few years ago – MusicMatic, in which the French Supreme Court of Cassation ordered users to pay CMOs for playing Creative Commons music in their outlets. The court referred to a specific provision in the French Intellectual Property Code, according to which users can use music in commercial spaces without the express consent of the author, but subject to payment of a mandatory royalty levied by the CMO. The Supreme Court held that rightsholders in this case were not contractually entitled to override the CMO’s mandate to collect remuneration for them (Cass., 11 déc. 2019, n° 18-21.211, ECLI:FR:CCASS:2019:C101021).

The concept of CMOs controlling and collecting mandatory remuneration for every use on the internet is not very feasible from a practical point of view either. CMOs do not always have the mandate to manage every type of online use. Also, protected content is not limited to music and audiovisual works, which seem to usually be prioritised when adopting such measures. Last but not least, such a policy is contrary to freedom of contract as a fundamental principle of law, and fails to take into account the need for a fair balance of rights and interests.

The controversial clause 1a refers to Article 18(2) of Directive 2019/790. We find it necessary to highlight exactly what this provision states. It refers to the principle of appropriate and proportionate remuneration of authors and performing artists, normally in their relations with producers and publishers, and states that:

  1. Member States shall ensure that where authors and performers license or transfer their exclusive rights for the exploitation of their works or other subject matter, they are entitled to receive appropriate and proportionate remuneration.
  2. In the implementation in national law of the principle set out in paragraph 1, Member States shall be free to use different mechanisms and take into account the principle of contractual freedom and a fair balance of rights and interests.

The mechanism aims to empower creators to seek adequate remuneration for their rights, rather than having the management of those rights taken away from them entirely. Hopefully in this case it is a misunderstanding that will be corrected, not an ambition for the CMOs to control all online licensing (and more). Otherwise, we do hope that the proposal goes through all stages of public consultation as required by legislative best practices.

Follow us for more copyright policy comments. In a future blog post, we’ll try to figure out together what a Law on the Digital Content of the Copyrighted Product is. 

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