Cross-border collective copyright management (debate) 
President
The next item is the report by Katalin Lévai, on behalf of the Committee on Legal Affairs, on the Commission recommendation of 18 October 2005 on collective cross-border management of copyright and related rights for legitimate online music services (2005/737/EC).
Katalin Lévai 
rapporteur. - Madam President, I wish to begin by thanking the shadow rapporteurs and other colleagues in the Committee on Legal Affairs for the overwhelming support they have given me. The unanimous support of the Committee on Legal Affairs was a great honour and privilege for me.
Let me start by underlining the importance of the copyright sector, which represents 5-7 % of the EU's GDP. It is therefore important to ensure that copyright and neighbouring rights in this increasingly growing digital domain are managed properly to the benefit of all involved.
For this reason, I have to say that I am not at all happy with the 'soft law' approach taken by the Commission, since it failed to involve the European Parliament and the Member States in regulating this area, which is of growing economic importance and therefore absolutely relevant to the proper functioning of the internal market.
The Commission has set a precedent in a very important and sensitive domain: by failing to consult Parliament or the Council, it has bypassed the democratic process. I believe we all agree that the legislative triangle cannot be ignored.
I am fully committed to the preservation of European cultural diversity. I believe that this issue should be placed in the front line of the debate. Any potential negative effects on cultural diversity in Europe must be avoided.
The Committee on Culture and Education has done an excellent job in highlighting the undesirable implications - one could even say negative effects - for cultural diversity of the Commission's recommendation. As you may have noticed, the Culture Committee's major concerns and demands, as well as compromise suggestions from all parties, are reflected in my report before you.
Summarising my report, I would like to say that my proposal preserves the reciprocal system of collecting societies in Europe, but makes sure that they all respect the principle of good governance. We will encourage and support the introduction of competition among collecting societies in a controlled manner and not the 'big bang' approach. We would like to guarantee that individual rights holders can continue to join the collecting society of their choice. We will promote the availability of the world repertoire for all collecting societies - large and small. We will argue for solidarity and equal treatment between authors and publishers affiliated to collecting societies. We will ensure that a few large rights holders cannot place the repertoire they control exclusively in the hands of a few large collecting societies, thereby creating an oligopoly situation in Europe. We would like to ensure that users of music from online and mobile services can obtain a one-stop shop when seeking a licence for the whole of Europe, but prevent them from forcing down the level of remuneration for authors. We would like to ensure that collecting societies can continue to play an indispensable role in promoting new and minority repertoire locally.
Finally, I would like to emphasise again that, by calling for a directive that reflects these objectives, we will demonstrate our overall support for strong cultural diversity in Europe.
During the improvement of the report, I tried to cooperate as closely as possible with all the interested parties - above all, the excellent shadow rapporteurs - to find the best and most balanced solution on this culturally and economically important area. I am very grateful for their precious advice and suggestions.
My objective has been to find a good balance of interests, a balance between the necessary introduction of competition and cultural diversity, a balance between rights holders and users of music, a balance between big and small collecting societies, a balance between the big rights holders and niche authors and composers. I have tried to propose a European solution in a very difficult and sensitive domain and I hope that it has been successful for the European Union and that we all shall benefit from it.
Vladimír Špidla
Mr President, honourable Members, I should like, if I may, to thank Mrs Lévai for her report on the Commission recommendation of 18 October 2005 on collective cross-border management of copyright and related rights for legitimate online music services. I should like to point out that the catalyst for the Commission recommendation was originally authors' fears: authors, composers and music publishers warned the Commission that they are not earning royalties from the use of their works on line.
From our analysis it is clear, however, that it is too complicated for individual countries to manage the use of copyright works on line, particularly in a digital environment. As a result of the complex relationships between the collective management organisations (CRMs) policing these rights in each individual country, it seems that royalties do not reach authors and other right-holders. The purpose of the Commission recommendation is therefore to ensure that authors, composers and music publishers do receive their fair share of online royalties.
Similarly, I believe that it is possible to improve the system of issuing licences in such a way that it facilitates the development of new online services while also protecting and providing genuine support for the interests of copyright-holders. To put it clearly, the recommendation does not propose a concrete model for issuing licences, but puts forward the principle that when it comes to managing their online rights, right-holders should be free to choose the most advantageous and efficient form of management or licensing. The aim therefore is to ensure that right-holders earn royalties from the online use of their music works. This will in turn enable us to ensure complete protection for the value of the right-holders' works. This is in no way a race to the bottom. This objective serves the interests of rights-holders and is reflected in the recommendation's regulations relating to administering transparency, resolving disputes, the responsibilities of copyright managers and the balanced representation of all categories of copyright-holders on the boards of CRMs.
The Commission welcomes Parliament's overwhelming support for this report. Even though we are still monitoring the impact of the recommendation and gathering the opinions of the interested parties, a number of initiatives have already been put in place with a view to strengthening management. In 2006, for example, the world trade association of music publishers and the umbrella organisation of European associations for the collective rights of authors adopted a joint statement establishing a set of rules for online copyright management.
Various right-holders including smaller CRMs and publishers have expressed enthusiasm for the business opportunities opened up by the recommendation of online music services. In the issuing of online service licences, the Commission sees an opportunity for the entire EU to acknowledge the value of music and to support different cultures and their musical works throughout the EU. The creation of new markets with specific music genres and the discovery of a genuine Internet public will unquestionably help support cultural diversity.
The report calls for the Commission to propose a directive on this issue. The Commission would note that the online market is developing and we must be extremely careful not to restrict its potential with an overly rigid approach. What is more, as I have said before, it is only now that we are looking into what the situation will be like after the recommendation has been adopted. I can assure everyone here that our goal is to guarantee right-holders royalties from their works and the users of rights the necessary licences in the simplest and most straightforward way. I believe it is vital to support and preserve Europe's cultural diversity. The Commission will naturally keep Parliament informed.
 Manolis Mavrommatis 
draftsman of the opinion of the Committee on Culture and Education. - (EL) Mr President, I should like first of all to congratulate and thank the rapporteur, Mrs Lévai, on her excellent cooperation and the outcome of her important work in the report on collective copyright management.
It is a fact that the composition of the committee is an important step towards the future convergence of the various practices in the 27 Member States. I consider that close cooperation between right managers must be maintained for the benefit of all sides. In the digital age in which we live, the effective safeguarding of copyright and related rights is exceptionally important in order to limit piracy and ensure that royalties are paid to right-holders.
In its opinion, the Committee on Culture and Education approaches the protection and collective management of copyright from the side both of musical authors or lyricists and composers and interpreters.
The present regime, as regards on-line services, is considered not to be adequately effective either for right users or for right-holders. Television and radio stations frequently fail to pay the royalties owed for the repertoire they use in their various broadcasts.
All right-holders, be they authors or composers, publishers, disc producers or performers need to be treated equally. However, the biggest problem of the music industry today is still piracy. The present system of mutual collective copyright management must, in my opinion, be maintained, so that competition can be established on the basis of the services which can be produced and the commission charged by collective right managers.
Finally, as we know, music is not a commodity. That is why we all have a duty to protect and reinforce creativity in Europe.
Hans-Peter Mayer
on behalf of the PPE-DE Group. - (DE) Mr President, I am now speaking in my capacity as shadow rapporteur for the Group of the European People's Party (Christian Democrats) and European Democrats on the Committee on Legal Affairs. The Commission's recommendation for the collective cross-border management of copyright and related rights throws up a multitude of problems, for it secures neither the rights of the artists nor the diversity of the music on offer in Europe, and there are gaps in the assessment of its potential impact. The chosen legal remedy is unacceptable; recommending three options at the same time does not really do anything to solve the problem that Mrs Lévai has set out so clearly in her report, and which the compromise before you aims to address. What that means in detail is a 'no' to territorial restrictions on use, a 'yes' to fair and controlled competition in the collective management of rights, 'yes' to the modernisation of the online music market, but not at the expense of cultural diversity and the protection of the artists, and 'yes' too to transparent rights management companies.
What is worthy of criticism about all this is that the Commission is trying, by means of a recommendation, to circumvent the rights of this House, and so we call upon it to present, through the codecision procedure, a proposal for a suitable legal instrument, founded, of course, on extensive consultation with all the interested parties.
Thinking forward to the forthcoming ruling on the CISAC case, I would like to appeal to the Commission not to use 'soft law' or agreements as means of voiding Parliament's rights of codecision, and I ask the Members of this House to give their assent to Mrs Lévai's report.
Manuel Medina Ortega
on behalf of the PSE Group. - (ES) Mr President, both the main report by the rapporteur for the Committee on Legal Affairs, Mrs Lévai, and the opinion of the Committee on Culture and Education, by Mr Mavrommatis, as well as the various speeches we have heard so far, demonstrate that there is considerable consensus amongst the Members of this Parliament with regard to the Commission's recommendation.
Firstly, we object to the method being used. The use of a recommendation, of the instrument known as 'soft law' at European Union level, is always very dangerous, bearing in mind that the European Union has its own legislative instruments, such as the framework directive proposed by Mrs Lévai.
Secondly, there is an objection in terms of content. The Commission's recommendation may already be producing undesirable effects on the shape of the intellectual property market subject to certain oligopolies, that is to say, the so-called 'majors', the main organisations that control radio broadcasting.
The Commission's recommendation may encourage these 'majors' to withdraw their repertoires from the current system of collective rights management societies, which makes it possible to safeguard rights. If that happened, the result would be that the 'minors', that is to say, the small organisations protecting intellectual property, would not be able to protect intellectual rights.
When it comes to culture, to music, the market is not the most important thing. The most important thing is musical production. The culture of each of the peoples of Europe.
It is not a question of creating a great market, because in a great market the Gresham law would end up being applied, according to which bad money takes the place of good money. In other words, we are on the point of reaching a situation of an entirely unified market, in which a few 'majors' or very important organisations will end up monopolising the market, imposing their conditions on authors and ultimately preventing intellectual creativity in the European Union.
We therefore support the report by Mrs Lévai and the opinion of Mr Mavrommatis, and we do not believe that this is a time to approve any amendment to these reports.
Toine Manders
on behalf of the ALDE Group. - (NL) Mr President, I am speaking here as shadow rapporteur in the Committee on Legal Affairs on behalf of the Group of the Alliance of Liberals and Democrats for Europe. Whilst we support the gist of the Lévai report as it was approved, we would like to add something, because the objective of the recommendation is to break the monopolies of management societies and make them more transparent thanks to the control measures that are to be put in place.
The compromise amendments are imperfect in places, lack either clarity or consistency and even restrict the scope. Our amendments on which we will be voting tomorrow complement the approved report and aim to make it easier to break the monopolies, make the market more transparent whilst ensuring that it becomes workable and that the authors and right-holders are proven right and can collect their compensation.
In Amendment 5, we ask the Member States to put the licences out to public tender every couple of years, just to keep the monopolistic management societies under pressure. Their monopolies are not a problem per se, but there is no form of control at the moment. A study by the Dutch competition authority has shown that every country uses different guiding principles. Since they are monopolies, it is impossible to inspect them, as a result of which it cannot be verified whether the compensation requested is exorbitant or whether the government costs are exorbitant. This should nevertheless be possible. I hope that this will come off thanks to the amendments we tabled.
Moreover, we are seeking, by means of our amendments, to broaden the scope, since, for example, broadcasting - when we talk about transmission via the Internet, i-pods and suchlike - falls within the scope of copy broadcasting, which is now being restricted. We should like to reintroduce this in order to come as close to the original Commission proposal as possible. As matters stand, there has been too much in the way of listening to management societies and not enough listening to right-holders and authors.
Marek Aleksander Czarnecki
on behalf of the UEN Group. - (PL) Mr President, we are today debating a difficult and controversial issue.
As regards dealing with the common problem of cross-border management of copyright and related rights regulating legitimate services in the field of online music, I note the lack of Parliament's formal involvement. I believe this is most inappropriate particularly as the issue was already raised in the resolution of 15 January 2004. I also note a lack of consultation regarding future regulatory work in this area. It is difficult to regulate the legal situation of a particular sector without becoming familiar with the stance of those concerned.
The Commission's recommendation seeks merely to regulate the online sale of music recordings. Owing to its imprecise wording, however, it could also be applied to other online services such as broadcasting services. The aforementioned lack of precision could lead to uncertainty as to the applicability of various systems of issuing reviews. All this could result in a lack of legal certainty and detrimental effects, especially for online broadcasting services.
There is also a risk that rightholders complying with the aforementioned recommendation in respect of their interactive online rights would deprive local collective management of copyright entities of other rights such as those relating to broadcasting, thus preventing users from acquiring user rights for a broader and more diversified repertoire from the same collective management of copyright entity.
Rightholders should have the possibility of benefiting from protection of copyright and related rights wherever those rights are established for the whole period of their validity, regardless of national boundaries or of the way they are used. A multi-territorial licence system should therefore be established. This would ensure greater legal protection for commercial users in relation to their activity and support the development of legitimate online services, at the same time increasing the flow of income for copyright holders.
The freedom to provide cross-border collective management services means that rightholders have a Community-wide free choice of collective management of copyright body, which is essential for the provision of legitimate online music services. This right includes the possibility of entrusting rights to another collective management of rights body or transferring all or some of the online rights, regardless of the European Union country concerned.
I believe that increased but also controlled competition in the area of collective management of copyright and related rights in the music sector on the Internet may prove beneficial to all. Pursuant to the Committee on Culture and Education's stance, it may also serve to support cultural diversity but only on condition that fair principles and transparency are guaranteed.
Eva Lichtenberger
on behalf of the Verts/ALE Group. - (DE) Mr President, ladies and gentlemen, this is not just about lofty conceptions of competition or the free choice of artists, or about the inadequacies of the rights management company system; this is quite clearly about diversity, about the reduction of the market to mass production, or about the upholding of the European quality of diversity.
Yes, there are inadequacies, and they do have to be done away with, but I do not believe it is at all possible to do that in the way the Commission has tried to. This report has occasioned a great deal of activity on the part of the lobbyists. We got loads of letters; I am sure you got some too, perhaps from 'Writers and Composers for Choice', but, if you read that letter and look at the signatures, you cannot be sure that all the artists actually know what they are supposed to have signed. I know people whose names appear on this list, but had not the least idea that their names were being used by an organisation in a letter of this sort. That shows the efforts of a number of rights management companies that want to create a monopoly for themselves in a poor light.
Daniel Strož
on behalf of the GUE/NGL Group. - (CS) Mr President, ladies and gentlemen, the Commission's approach, the result of which is the recommendation on collective cross-border management of copyright and related rights for legitimate online music services, is unfortunately further evidence of the unacceptable, and indeed completely needless, circumvention of the democratic decision-making process as regards the role of the European Parliament. I should like to highlight a number of points in the report before us, which broadly speaking I welcome and on which I congratulate the rapporteur and those who worked with her. In particular, I wish to highlight the need for the equitable treatment of all rights-holders and the protection of the system of agreements and the free choice of licences as well as higher levels of protection for right-holders.
As regards the issue of future competition, attention should be paid to the possible misuse of monopolies when it comes to the collective management of authors' rights. The more we speak about economic competition across the whole spectrum of intellectual property rights, the more it is vital for that competition to be regulated, controlled and fair. I am highlighting this because provisions aimed at protecting economic competition in the area of intellectual property rights have been extensively applied, and in a number of cases competition is given precedence over the exercise of those rights.
Jens-Peter Bonde
on behalf of the IND/DEM Group. - (DA) Mr President, I should like to thank Mrs Lévai for her constructive cooperation on the report and the EU observer for its useful conference on creative rights. I should also like to thank Pia Raug who, instead of just giving up, convinced the majority of us.
A year ago, the arts were in danger of losing out to the market. People in the Commission were used by multinational companies to implement what is known as a soft-law instrument, which would never have got by elected representatives. Tomorrow, we shall have a large majority in favour of the arts in all their diversity, and the Commission will then withdraw its threats of legal action against copyright managers and shelve its communication on the music market. Writers, composers and users are to be listened to, then. A fresh start should be made with a proposal for a directive that we in the European Parliament too are involved in negotiating.
The vast majority of Members of the European Parliament want to ensure an all-round supply of music. We shall never allow the supply to be determined by a handful of multinational companies. We also want to ensure that less visible artists can find their public. As consumers, we will not be satisfied with popular music from only the biggest countries. Nor will we let the multinationals' friends in the Commission expropriate KODA and other copyright law companies that, every day, make great efforts to ensure the accessibility and equal treatment of music intended for both a broad and a more restricted audience.
All users can now be satisfied with one contract with one agency, which then settles up with the others. The system is basically sound but requires more administrative transparency in places. As music users we are happy to pay a fair price to writers and composers, but we want to pay as little as possible to bureaucrats and multinational giants. The Lévai report is a balanced one and does Parliament credit.
Vasco Graça Moura
(PT) I shall begin by saying that I am an associate member of the Sociedade Portuguesa de Autores (Portuguese Authors' Society), the Portuguese collective rights management society (CRM) in this area.
The report by Mrs Levai and Mr Mavrommatis deserves to be adopted. The freedom for authors and composers to be represented by the CRM of their choice is as fundamental a principle as the ban on major publishers entering into exclusive agreements with CRMs.
The mandate granted by a major publisher to a given CRM should also be able to be granted to any other CRM. That mandate should, moreover, only be able to include the centralisation of licensing for multinational companies, with the licences for national companies remaining the responsibility of local CRMs.
The availability of the global repertoire should be preserved for all collective management societies through licences issued to users. For this reason, as the report says, it is vital to prohibit any form of exclusive mandate between the major right-holders and the collective management societies for the direct collection of royalties in all Member States, given that this would lead to the rapid extinction of national societies.
The network of national societies should be preserved so that they all have access to the global repertoire and everything possible must be done to safeguard cultural diversity, in view of the indispensable contribution made by these national societies via what they do in their respective countries.
That being said, it is at least bizarre that a recommendation by the Commission has been deemed to be the right way to address the issue of CRMs, not least because, according to the Commissioner, the Commission is not yet au fait with the current state of affairs.
The Commission will hopefully welcome the call, in one of the recitals in the report, for it to draw up a proposal for a directive. After all, it is clear that given what is at stake this proposal must be implemented as quickly as possible.
Diana Wallis
Mr President, Commissioner, I would like to thank Mrs Lévai for her report and for the hard work that she has done, but what a shame that Parliament had to grab at this report, otherwise it would have passed us by. I want to add my voice to the choir of those who have already complained about the process, about the choice of method. The Commission has the right to choose a recommendation, but it is a political choice and it has two effects.
First of all, in an area like this a soft law instrument may unfortunately give rise to uncertainty, to a lack of legal clarity, but more importantly it avoids this House. It avoids democracy. That cannot be acceptable and I think this is our biggest complaint, not so much about the content, but the way in which this has been done in an attempt avoid the legislator. It seems to me even more startling, having participated in the last mandate of this Parliament, when we had a colleague, Mercedes Echerer, who spent months, even years, working on an own-initiative report in this area. Parliament's interest in and commitment to this issue were well known, so to find ourselves coming back and being faced with a mere recommendation, with all its difficulties, faults and inconsistencies, is just not good enough. I apologise for not having addressed the substance, but it is the process which concerns me most.
Jacques Toubon
(FR) Mr President, I should like to thank Mrs Lévai and Mr Mavrommatis for their excellent proposals.
This report is timely because intellectual and artistic property is now being called into question in the European Union. On the undoubtedly legitimate grounds of the technology revolution, which is profoundly changing the way in which we access artistic creations and cultural assets, the Commission has been proposing for some months to reduce the pay of authors, composers, performers and all rightholders in general. It fully supports the view shared by manufacturers and consumers that online distribution can be free of charge.
I condemn this deadlock, this illusion of free online services. If creators and performers are no longer paid by copyright and related rights, one day there will no longer be any creation, any new music, or any new films. What will we put on the network then?
We were able to stop the draft Commission recommendation, which attacked the system of compensation for private copying, but it is still on the table.
In each of our countries, we have transposed the 2001 Directive and safeguarded the status of rightholders. The Commissioner for Competition has decided to put a stop to the territorial scope of national collective rights management societies. The recommendation on the collective cross-border management of copyright and related rights for online music comes under the same dangerous concept. It has also had a harmful impact, since the German and British societies have created one joint society to which a very important record producer has entrusted the exclusive rights to its international catalogue.
Mrs Levai is therefore right to challenge the Commission option, which relies more on an inadequate consultation process. Her proposal, which safeguards local repertoires, does seem to us, however, to be a little too favourable to distributors and thus carries the risk of dumping, to the detriment of rightholders. However, I hope that this report, in its current form, is adopted so that the Commission knows that, where very sensitive areas are concerned, the European Parliament refuses to see European law escape the legislator and wants all points of view to be taken into consideration without bias. This is also what is meant by cultural diversity.
Klaus-Heiner Lehne
- (DE) Mr President, ladies and gentlemen, I, too - just like Mrs Wallis - remember the last mandate of this Parliament, for this House has always had its problems with the rights management companies; I would refer the House back to the Echerer report, in which we demanded of the Commission a specific piece of legislation on their transparency and the regulation of them, to the Zimmerling report, in which this featured, and to the deliberations on the directive on copyright and related rights in the information society.
For those reasons alone it is perfectly right and proper that the Commission should be giving thought to how this problem should be handled, for it is not tolerable, in the long run, that there should be twenty-seven monopolies in this field and no internal market, but nor do we want these twenty-seven monopolies to be replaced by a few oligopolies, and that much became abundantly clear from the deliberations we had in committee.
I want, though, to take this opportunity to make it clear that rights management companies do not exist for their own sake alone; they are a sort of necessary evil, existing where they are needed, as mediators between those who create the product and those who use it. Where that is not required - and such a situation is indeed conceivable - no rights management company is needed.
What I have learned, though, from many discussions and hearings - and not least from these companies lobbying activities - is that this business is much more complicated than we had originally thought. In the course of the process, a lot of stakeholders changed their minds; the big management companies suddenly decided that they were all for liberalisation, because they worked out that the market would give them the chance to form an oligopoly, while many users suddenly changed their minds and decided against all-out liberalisation, in which they saw more drawbacks than benefits for themselves.
What is needed here, quite simply, is the very careful drafting of any proposal for legislation; it is self-evident that we have to do something about this, and that things cannot carry on the way they are, but our expectation is that the Commission should actually produce that proposal, and that we should then be able to get to grips with it with all the ways and means afforded by parliamentary debate. That is the crucial message that this report carries, and that is also what we expect of the Commission.
My thanks go to the rapporteur and to the shadow rapporteurs.
President
The debate is closed.
The vote will take place tomorrow at 12.00 noon.
Written statements (Rule 142 of the Rules of Procedure)
Bruno Gollnisch 
in writing. - (FR) As far as boosting the growth of online music services within Europe is concerned, we agree with the Commission on the fact that the development of these services hinges on a change in the systems of collective management and of the granting of copyright licences at Community level. Indeed, these improvements have become necessary as a result of the emergence of new services such as Internet radio, streaming and downloading services for which a fee must be paid. The absence of a copyright licence in the EU has been one of the obstacles preventing new Web-based music services from reaching their full potential.
However, the European institutions must legislate with caution on collective management systems, which are highly complex. In particular, they should keep a very close eye on the excesses of a system in which the freedom of rightholders to freely choose a management society within the EU would result in a concentration of rights and would undermine cultural diversity.
In this regard, we endorse the majority of the rapporteur's comments, together with the idea that a rights manager must be authorised to supply commercial users with a pan-European, multi-repertoire licence for the online use of musical repertoires, throughout the EU.
Andrzej Jan Szejna
in writing. - (PL) Mr President, I should like to begin by thanking the rapporteur, Mrs Lévai, and congratulating her on her work on the European Parliament resolution before us today. Technical progress and the development of our civilisation have resulted in the emergence of a new generation of cross-border commercial copyright users. They are the suppliers of Internet music services. This shows how the market in copyright and related rights is evolving and developing, which further confirms the need for the initiatives taken in this area.
The proper development of the European music market calls for a study to be undertaken on the impact of multi-territorial and multi-range licences for online music services and of the effects related to the socio-economic situation of the rightholders. It is also important to ensure that the European market in online music services is able to develop freely without detriment to European cultural diversity.
The European Parliament resolution before us today deserves our support. Nonetheless, it is essential for the Commission to undertake an in depth study of this problem. The results of the study should be submitted to the European Parliament.
In addition, I should like to point out that as we engage in this debate we should also bear in mind how we might respond to future needs resulting from the nature of collective cross-border management of copyright and related rights.
