US talent unions back UMG on EMI takeover, and Sony/ATV deal for EMI Music publishing gets the EC’s green light
EU
New Zealand
UK
USA

COMPETITION Record labels, music publishing In a surprise move, two of the US’s biggest talent unions have come out in support of Universal’s takeover of EMI’s recorded music division on the ground that UMG would, unlike previous owners Terra Firma, actually invest in music and musicians. In a letter to the U.S. Federal Trade Commission Chairman Jon Leibowitz The American Federation of Musicians said that UMG had shown “compliance with and respect for its collective bargaining agreements has been positive when compared to its peer companies” and that “Sustaining the EMI legacy” under Universal’s ownership “would appear to benefit AMF recording musicians.” The recently merged The Screen Actors Guild and the American Federation of Television and Radio Artists said Universal has shown commitment to the music industry, investing in new artists and innovative musical genres in a separate letter saying “For EMI to be left to further drift into oblivion, or for EMI to be acquired and sold off in pieces by capital investment speculators with no appreciation for, or commitment to, artists who fuel the recording industry, would ill serve the industry,” SAG-AFTRA said. Universal is “committed to reinvesting in EMI to create even more opportunities for new and…

Chugg calls for anti-touting laws in Australia
Competition , Live Events / April 2012
Australia

COMPETITION Live events industry Australian promoter Michael Chugg has called from new ‘anti-scalping’ laws after tickets for Radiohead’s latest tour sold out in minutes and fans fumed over tickets at inflated prices posted on eBay. As fans took to social media to vent their frustrations, prompting Chugg Entertainment to release a statement advising against buying from unauthorised sources. Chugg says action needs to be taken on a national level, including co-operation between promoters, federal and state government and websites, to curb the ongoing issue of ticket on-selling saying “The federal government should be bringing in a blanket policy but the state governments also need to act,” Chugg told AAP. But Live Performance Australia, which sets policy for the music industry, continues to oppose any moves to make scalping illegal with Suzanne Daley, Director of Policy and Programs for LPA saying “Scalping is a very difficult practice to monitor and stamp out” adding “We believe resources would be better focused on educating consumers around the risks rather than trying to prevent it via legal means.” Scalping comes under commercial law which is decided at a state level. The practice is illegal only in Queensland and only after a scalper makes a…

Will MAMA sale herald a new competition query?
Competition , Live Events / April 2012
UK
USA

COMPETITION Live events industry HMV’s plan to sell its live music division, the MAMA Group, has now entered its second stage, after passing the deadline for first round bids. It seems interested bidders include both AEG Live and Live Nation’s Academy Group, both of whom already own UK venues. Live Nation’s acquisition of the Academy Music Group itself in 2007 prompted a Competition Commission enquiry which passed the sale, subject to the sale of two of AMG’s London venues and it will be interesting to see what competition regulators make of a combined Live Nation-MAMA or AEG-MAMA. The jewel in the MAMA crown is the Hammersmith Apollo, which CMU Daily reported “would be a perfect addition to AEG’s UK venue portfolio, especially in the burgeoning live comedy market, the West London Apollo venue being the stepping stone a-list stand ups take before reaching the ultimate goal of selling out AEG’s The O2 Arena on the east side of the capital”. Whether AEG would be interested in MAMA’s other businesses, in the festivals, artist management and marketing partnership domains, isn’t clear, and it seems possible that MAMA co-founder Dean James could head a partial management buy-out. In a statement HMV said…

Google COULD face legal action from record labels
USA

COPYRIGHT / COMPETITION Internet, record labels TorrentFreak reports that the recording industry is considering filing a lawsuit against Google for allegedly abusing its dominant market position to distort the market for online music saying “Industry groups including IFPI and the RIAA want Google to degrade links to ‘pirate’ websites in its search results” and that “IFPI has obtained a ‘highly confidential and preliminary legal opinion’ to see if they can force Google to step up its anti-piracy efforts though a lawsuit” – with the IFPI saying  “Google continues to fail to prioritize legal music sites over illegal sites in search results, claiming that its algorithm for search results is based on the relevance of sites to consumers” explaining “With a view to addressing this failure, IFPI obtained a highly confidential and preliminary legal opinion in July 2011 on the possibility of bringing a competition law [antitrust] complaint against Google for abuse of its dominant position, given the distortion of the market for legitimate online music that is likely to result from Google’s prioritizing of illegal sites.” So it seems whether the legal action will actually be launched is a matter of whether or not Google will come to the table…

Warners to fight EMI sale to Universal
Competition , Record Labels / March 2012
EU
UK
USA

COMPETITION Record labels On his final day as Chairman of the Warner Music Group, Edgar Bronfman Jr has confirmed the World’s  third biggest music rights company would join with the independent sector fight ‘tooth and nail’ against the proposed merger of the EMI record companies with the market leader Universal Music Group. Saying that allowing Universal to take ownership of the EMI record companies “would create what I call a super-major that would control not only the future of recorded music but the future of all digital media”. According to the Wall Street Journal, he continued: “I think it’s dangerous, I think it’s problematic and I think it’s got to be stopped. It does strike me as hubris, particularly for Universal to think it’s going to be easy to buy EMI, and frankly to think they can buy EMI at all”. The position was subsequently confirmed by Warner Music’s CEO Stephen Cooper. Competition regulators in the EU. USA and elsewhere will be noting this with interest! And indie labels trade body IMPALA has repeated its opposition to the planned merger after Universal formally submitted its bid proposals to the European competition regulators. IMPALA’s Executive Chair Helen Smith said: “The clock…

EU and US approve Google’s Motorola acquisition
Competition , Internet / March 2012
EU
USA

COMPETITION Internet, Technology The European Commission has approved Google’s $12.5 billion acquisition of Illinois-based handset-maker Motorola Mobility. The deal, first announced in August, will give Google the hardware to go along with its popular Android smartphone operating system. In its ruling, the competition (antitrust) regulator said the acquisition “would not significantly modify the market situation in respect of operating systems and patents for these devices.” The U.S. Department of Justice simultaneously announced it has closed its investigation of this acquisition in the USA. http://www.bbc.co.uk/news/technology-17021933

Indies look at EMI sale implications
EU

COMPETITION Recorded music Pan-European indie label trade body IMPALA has announced it will formally oppose any attempt by Sony to buy the EMI music publishing company and/or Universal to buy the EMI record labels . Vivendi-owned Universal and the Sony Corp’s combined music assets – including wholly owned Sony Music and publishing JV Sony/ATV – are the two biggest music companies in the world, and IMPALA argues that the move would be detrimental to the music industry as a whole. Interestingly IMPALA seems less resistant to a Warners takeover, saying here that ‘remedies’ could solve any competition issues. The trade body has confirmed that it has asked the European Commission to investigate “all possible options to intervene” should Sony or Universal be successful in bidding for a sizable slice of the EMI business. IMPALA’s Executive Chair Helen Smith said “We have always said our position is no mergers without remedies and we know from 2007 that it is possible to find a solution which is far-reaching enough. Our problem with Universal, however, is that we believe it is simply too big already to be allowed to gain more power and we have the same concerns over Sony buying EMI publishing….

Murphy wins in battle to screen Greek TV, as EU competition law “trumps” copyright law
Competition , Copyright , Licensing / November 2011
EU

COPYRIGHT / COMPETITION Broadcasting, licensing Pub landlady Karen Murphy has succeeded in her European court battle against the Premier League over the use of a Greek TV decoder to screen Live Premiership football matches in the UK.  This update is taken from information contained in a press release from the Court of Justice of the European Union (No 102/11, Luxembourg, 4th October 2011). The Court of Justice held in a preliminary ruling that national legislation which prohibits the import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend (live football matches) football stadiums. So far as concerns the possibility of justifying that restriction in light of the objective of protecting intellectual property rights, the Court observes that the Football Association Premier League (FAPL) cannot claim copyright in the Premier League matches themselves, as those sporting events cannot be considered to be an author’s own intellectual  creation and, therefore, to be  ‘works’ for the  purposes of copyright in the European Union. The Court also held that even if national law…

US Judge rejects Ticketmaster settlement on delivery fees
Competition , Live Events / August 2011
USA

COMPETITION Live events industry A Californian judge last week rejected an out of court settlement regarding a class action lawsuit against Live Nation’s Ticketmaster originally brought in 2003 two Americans, Curt Schlesinger and Peter Lo Re, who sued Ticketmaster claiming the ticketing giant had misled customers by implying in its marketing materials that “delivery fees” added to ticket purchases were simply a cost of sale, whilst in reality they were a profit margin. The case, which became a class action last year, was due to go to court in January, but an out of court settlement was reached, in which anyone who believed (and could prove) they had been misled could claim a small refund or discount on future purchases. Live Nation set aside $22.3 million to cover any claims.  LA Superior Court Judge Kenneth R Freeman has now turned down the settlement, saying it wasn’t sufficient and that the proposed deal “offered virtually no benefit to the class member” (ie anyone who made a claim). The whole thing is now likely to go to court in October. In related news, Live Nation is still suing its insurers Illinois Union Insurance Co in relation to this case after the insurers…

Cohl’s lawsuit against Live Nation allowed to proceed
USA

CONTRACT / COMPETITION Live events industry A US judge has denied Live Nation’s request that a lawsuit filed against them by the live music conglom’s former Chairman, Michael Cohl be dismissed. Live Nation and Cohl are in a legal dispute over the agreement the two parties reached when they parted company back in 2008. That agreement allowed Cohl to continue to work as a promoter with certain big name artists – most notably the Rolling Stones – in return for the former Chairman paying the live music firm nearly $10 million over a number of years. Live Nation sued Cohl last year claiming that he had defaulted on those multi-million dollar payments. Cohl then counter-sued claiming Live Nation were already in breach of contract for interfering in his efforts to secure the rights to promote a mooted Rolling Stones fiftieth anniversary tour. Live Nation requested Cohl’s countersuit be dismissed, partly on the grounds that the Stones tour at the heart of the specific dispute hadn’t, in the end, happened, and was only being vaguely considered by the band at the time the two parties squabbled about it. But, according to Billboard, US District Court Judge Cecilia Altonaga this week said…

Steve Jobs faces anti-trust questions about iTunes
Competition , Internet / April 2011
USA

COMPETITION Internet, recorded music Judge Howard R. Lloyd has authorized limited questioning of Apple CEO Steve Jobs  in San Jose, California  by lawyers representing consumers in a complaint against Apple that its iPlayer/iTunes model breached federal antitrust laws and California’s unfair competition law by requiring that customers use an iPod to listen to music purchased from the iTunes Music Store. Lawyers will be allowed two hours for questions limited to the sole topic of changes Apple made to iPod software in October 2004 that disrupted RealNetworks’ Harmony software, which enabled songs purchased from the company’s music store to be transferred onto the iPod. When RealNetworks released Harmony in 2004 Apple released a statement accusing the company of adopting “the tactics and ethics of a hacker to break into the iPod” and warning customers that it was “highly likely” that Real’s Harmony technology would not work with future versions of the iPod software. As self-predicted, Apple disabled Harmony in a subsequent update to its iPod software later that year. Since the lawsuit was originally filed in 2005 Apple has negotiated with music labels for a more open iTunes Music Store. A footnote in a court document notes that, by March 2009,…

Murphy v MPS
Competition , Copyright / March 2011
EU
UK

COPYRIGHT / COMPETITION Broadcasting, content owners Murphy v MPS – The Advocate General’s opinion might have serious ramifications for the pan-European TV market and territorial licensing deals within the European Community One of the most interesting copyright vs competition law cases has finally reached the European Court. Its one we have been watching and waiting for!  In Murphy v MPS, a pub landlady, Karen Murphy was convicted of copyright infringement for using a Greek ‘Nova TV’ decoder to play English Premier League football matches live in her pub. Sky owns the right to screen EPL matches in the UK but the Premier League sell the rights to other broadcasters in Europe such as Nova in Greece. Unsurprisingly it was a lot cheaper to subscribe to the Greek service and unsurprisingly Sky decided to take action against her and she was convicted in the Magistrates Court and this was upheld in the Crown Court. This was then appealed to the High Court who referred it to the ECJ. The Advocate General has now decided that (and in a ‘nutshell’) copyright is trumped by completion law ….. so it was LEGAL for Ms Murphy to purchase her football from Greece … well it is a…

Apple apps deal sparks prompts thoughts of anti-trust lawsuits
Competition / March 2011
EU
USA

COMPETITION Online Apple’s announcement that it would take a 30% commission for all sales of content made through its apps subscription system has prompted talk of anti-trust law suits from online operators such as Rhapsody. Any subscription-based app made available via Apple’s store will have to offer customers the option to pay for their subscriptions via the Apple platform at the same price as if they chose to have a direct billing relationship with the service provider.  It would be a brave content owner who walked away from Apple’s iPad and  iPhone customers ….. although if enough did it might be the start of something very interesting if Google’s Android system and the new Microsoft/Nokia conglomerate started to pick up annoyed content owners – and it seems a few might – Google has announced a payment system that allows newspaper publishers t charge readers ti access online content –and Google will take just 10% of these micropayments. In the UK Associated newspapers have signed up as have Spain’s El Pais and in Germany Tomorrow Focus and Stern.de are both on board. According to various reports, officials at the US Department Of Justice have approached both affected content providers and Apple to discuss…

Major labels must face internet price fixing case
Competition , Record Labels / February 2011
USA

COMPETITION Record labels This is a case that has been bubbling under for a while now and one I have kept my eye on. Did the record labels set up MusicNet and PressPlay (remember them?) to try and enforce their control over the distribution of music on the internet and fix prices  ….. well, the US Supreme Court has rejected an move by the major record labels’ to block a lawsuit lodged by consumers who claim the majors colluded to fix prices on music sold on the Internet. Universal Music Group, Sony Music, Warner Music and EMI had asked the Supreme Court to block the lawsuit, after a federal appellate court in New York agreed with a lower court’s ruling that sufficient evidence existed for the lawsuit to proceed. The now five year old lawsuit (Starr v Sony) alleges the labels charged unreasonable rates for songs, and unreasonably imposed restrictions on consumers transferring songs to portable players. It also alleges the labels colluded to set a base price of 70 cents per song for selling their songs. In 2008, a federal judge dismissed the original lawsuit, ruling the plaintiffs had not presented enough evidence for a anti-trust hearing  but on…

Australia decides on light touch regulation for secondary ticketing
Competition , Live Events / January 2011
Australia

COMPETITION Live events industry Government officials in Australia have decided to take a “hands-off approach” to the secondary ticket market, a move that can be seen as a victory for the country’s small resale industry according to Tciketnews.com.  In a report released by the Commonwealth Consumer Affairs Advisory Council (CCAAC)  the Council concluded that consumer claims that an abundance of ticket scalpers were unfairly buying up loads of live entertainment tickets and reselling them at high prices were largely unfounded. While the council did not dismiss the fact that some brokers and fans buy tickets with the purpose of flipping them for a profit, it said that the “onselling” market — the name for the resale market in Australia represented well under 10 percent of all ticket sales in the country, and that existing consumer protection laws are adequate to keep the industry in check. “CCAAC recognises that consumer dissatisfaction can be widespread. However, this is often a result of market forces when high demand exceeds limited supply, particularly for popular events, rather than as a direct result of ticket onselling,” the report stated. “CCAAC found that technology is a major contributor to tickets being sold out quickly. The internet…

Univision settles payola charges with $1 million payment
Competition , Record Labels / August 2010
USA

COMPETITION Radio, record labels The three-year criminal investigation into a pay-for-play scandal at Univison Communications in which Latin-music executives were said to have bribed radio station managers with briefcases stuffed with cash has ended after Univision agreed to pay $1 million in penalties to federal authorities. Somewhat bizarrely, in many cases the bribes were from Univision’s labels to executives at Univision’s radio stations. As part of an agreement with the US Justice Department the Spanish-language media giant Univision pleaded guilty to one count of conspiracy to commit mail fraud. During the four-year scheme, executives and music promoters at the now-defunct Univision Music Group paid thousands of dollars to radio station programmers in exchange for increased radio air time for Univision’s songs. The LA Times report that in one instance, a Los Angeles-based Univision executive in February 2006 sent a Federal Express package that contained $157,800 to a New York radio station programmer, according. Program managers in California and Texas also received bribes. Univision executives and the record promoters then concocted phony contract invoices and payments to hide the true purpose of the payments, documents filed by the U.S. Justice Department said, The cash payments violate federal laws because they were…

Festival exclusivity clauses attracts the attention of the Illinois Attorney General
Artists , Competition , Live Events / July 2010
USA

COMPETITION Artists, live events industry According to a Chicago-based blogger called Jim Derogatis, US promoters C3 Presents are being investigated by the Illinois Attorney General Lisa Madigan who is looking at the limitations C3 puts on artists when they are booked to play the Lollapalooza festival in Chicago – the so called ‘radius clauses’ – preventing bands playing in the locality for a period of time before and after the event. With the potential of an anti-trust action looming, a VP of the William Morris booking agency has been subpoenaed to provide information to the investigation, while Billboard says C3 themselves have also received a subpoena. Derogatis says that promoters in the Chicago area have long complained about the radius clauses C3 put into Lollapalooza artist contracts, although Billboard adds that many artists break those clauses and that the festival promoter seemingly has never been known to enforce them. CMU 25 June 2010  www.thecmuwebsite.com  

UK’s Competition Commission gives final clearance to Live Nation/Ticketmaster merger
Competition , Live Events / June 2010
UK

COMPETITON Live events industry The UK’s Competition Commission (CC) has cleared the Live Nation/Ticketmaster merger, removing the last obstacle in the creation of the world’s largest live entertainment company.  After reversing its initial approval in December, the Commission’s findings follow a fresh round of submissions, after which it concluded that “the merger would not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market in the UK, including live music promotion and live music venues.” The merger of Ticketmaster and Live Nation was completed (subject to conditions) in the USA on 25 January, following approval from the Department of Justice. In the UK, a key sticking point in the CC’s original decision was the effect it would have on Germa ticketer CTS Eventim, which is contracted to provide ticketing services to Live Nation as part of a ten-year international deal. Eventim challenged the first approval of the deal, arguing that the merger would hinder their entry into the UK market. In summary, however, the CC said: “The CC has found that the merger will make little difference to the prospects of Eventim’s success in the UK. On the basis of…

Live Nation and Ticketmaster merger given green light by US and Canadian regulators
Competition , Live Events / February 2010
Canada
USA

COMPETITION Live events industry Live Nation and Ticketmaster Entertainment have announced that they have reached agreements with the U.S. Department of Justice (DOJ) and with the Canadian Commissioner of Competition, clearing the way for the merger of the companies.  The company will be renamed Live Nation Entertainment, Inc. and will combine Live Nation’s concert promotions expertise with Ticketmaster’s ticketing and artist management businesses. Under the terms of the proposed final judgment filed today in U.S. District Court for the District of Columbia, the companies have agreed to divest Ticketmaster’s self-ticketing subsidiary, Paciolan, to Comcast-Spectacor and to license the Ticketmaster Host technology to Anschutz Entertainment Group, Inc. (“AEG”), as well as to other terms that protect competitive conditions in ticketing and promotions. Seventeen State Attorney Generals also participated in the matter and have joined in the U.S. consent decree. The parties’ consent agreement with the Canadian Commissioner of Competition is on substantially equivalent terms. Michael Rapino, CEO of Live Nation, said, “This is a good and exciting day for the music business, and we are close to finalizing the creation of a new company that will seek to transform the way artists distribute their content and fans can access that content.  The Department of…

Venues and promoters voice concerns over Ticketmaster and Live Nation merger
Competition , Live Events / February 2010
USA

COMPETITION Live events Industry Prior to the US DOJ approval of the Live Nation – Ticketmaster merger, but after the rather unusual U-turn by the UK’s Competition Commission which also allowed the Live Nation-Ticketmaster merger, a number of consumer protection groups and the National Association of Ticket Brokers expressed concern about the merger and these concerns were repeated by several of the US’s prominent independent venue operators and concert promoters who banded together to oppose the planned merger. In an email being circulated to fans and industry organisations, titled “Concert Fans Beware!”, the group of venue operators and promoters urged people and fellow industry members to oppose the proposed deal because it could severely affect the concert landscape.; The venues and promotion companies that signed the email are Minnesota’s First Avenue, Washington DC area stalwarts The 9:30 Club, Merriweather Post Pavilion and The Black Cat; Jam Productions, Metropolitan Talent; Another Planet; Frank Productions; Stone City Attractions and Rams Head Live. It has been interesting that the main focus of regulators looking at the merger seems to have been on the ticketing market – whereas many commentators say that the ‘bigger picture’ is the effect a merged company might have on…

Court Reinstates Music Antitrust Suit
Competition , Internet , Record Labels / February 2010
USA

COMPETETITON Record labels, internet An appeals court has reinstated a lawsuit that accused major record labels of price fixing and trying to cut competitors out of the digital market – a ploy that spectacularly backfired and allowed internet piracy to run rampant over other fledgling business models.  The suit had been previously dismissed by a federal judge. The US Second Circuit Court of Appeals decision to reinstate the antitrust case could affect millions who download music over the Internet. Filed on behalf of internet user who (legally) download music over the Internet, the plaintiffs accused the record labels of violating the Sherman Antitrust Act. The defendants include Bertelsmann AG (owners of BMG), EMI Group, Sony, Vivendi SA (owners of Universal), and Warner Music Group, as well as some of their affiliated units.In October 2008 the lawsuit –Starr et al v SonyBMG et al – was dismissed by a lower court who said the plaintiffs didn’t have a case against the major music companies for the litigation to go to a full court hearing. The lawsuit centred on the music industry’s first forays into the digital market – Pressplay and MusicNet, the first backed by Sony and Universal, the latter by EMI,…

UK Competition Commission clears Tickemaster/Live Nation merger
Competition , Live Events / January 2010
UK

COMPETITION Live events industry The Competition Commission (CC) has decided to clear the proposed merger of ticketing giant Ticketmaster and promoter and venue operator Live Nation in the UK. As both Ticketmaster and Live Nation are headquartered in the USA, the CC’s final report notes that the merger is also being investigated by the US competition authorities. The CC has concluded that the merger will not result in a substantial lessening of competition in the market for live music ticket retailing or in any other market in the UK, including live music promotion and live music venues. Prior to the proposed merger, Live Nation signed an agreement with Ticketmaster’s largest global competitor, CTS Eventim (Eventim), headquartered in Germany, consequent to which Eventim is planning to enter the UK for the first time. Under the agreement, Eventim will provide Live Nation with ticketing software and services, enabling Live Nation to sell its own tickets. Eventim will also be allocated a proportion of Live Nation’s tickets to sell to consumers. The CC has found that the merger will make little difference to the prospects of Eventim’s success in the UK. Although Live Nation’s incentives will change as a result of the merger,…

UK Competition Commission rejects Live Nation – Ticketmaster tie up
Competition , Live Events / November 2009
UK
USA

COMPETITION  Live events, ticketing In provisional findings, the UK’s Competition Commission (CC) has ruled against the proposed merger between Live Nation and Ticketmaster Entertainment, predominantly because it would hinder German ticketing company CTS Eventim’s entry into the UK market. The opposition is the first against a US merger since the CC was given the power to oppose mergers in 2003. The merger, which was announced in February and would create one of the world’s largest entertainment companies with annual sales of about $6 billion and interests in concerts and tours, venues, ticketing, artist services and merchandise, is also the focus of investigation in the US. Live Nation also has a number of so called 360 degree deals with artists including U2, Madonna, Shakira, Jay-Z and Nickleback. Since it’s 2008 merger with Irving Azoff’s Frontline Management which saw Azoff installed as CEO at TM, the combined TM portfolio now includes the management of the Eagles, Christina Aguilera, Jimmy Buffet and Neil Diamond amongst another two hundred acts and alongside the world’s biggest ticketing operation. In a separate move TM also recently acquired a majority stake in Nashville based DS management whose roster includes Alison Krauss and Union Station amongst others CC…

EU welcomes SACEM’s pan-European ambition
EU

COMPETITION Music publishing The European Union Competition Commissioner Neelie Kroes has welcomed progress in the music collection society sector on the provision of pan-European licences for digital music after French collecting society SACEM said they are ready to entrust other collecting societies with their repertoire for pan-European licensing, while offering to represent other societies’ repertoire on a non-exclusive basis. European officials have been in conflict with the collecting society community because of the lack of pan-European licences. Officials say that a system whereby providers of digital music services must get a separate licence from each national collecting society is anti-competitive, because the collecting society in each territory effectively has a monopoly, that pan-European licences would make it easier to launch a pan-European digital music service and that such licences would force the societies Europe to compete with each other, thus ending the monopoly concerns.  Commenting on those and other developments, Kroes said “There is a clear willingness expressed by major players in the online distribution of music in Europe to tackle the many barriers which prevent consumers from fully benefiting from the opportunities that the internet provides. I therefore encourage the major players, in particular publishers and collecting societies, to…

MCPS-PRS to challenge EC competition ruling
Competition , Copyright , Music Publishing / November 2008
EU
UK

COMPETITION / COPYRIGHT Music publishing UK music royalty collection society the MCPS-PRS Alliance is challenging a European Commission (EC) competition law decision limiting the control such organisations have over copyright use agreements. In July, the EC ruled that the current exclusivity deals the single-country societies had were effectively domestic monopolies in violation of Article 81 of the European Commission Treaty and Article 53 of the EEA Agreement saying The European Commission has adopted an antitrust decision prohibiting 24 European collecting societies from restricting competition by limiting their ability to offer their services to authors and commercial users outside their domestic territory. However, the decision allows collecting societies to maintain their current system of bi-lateral agreements and to keep their right to set levels of royalty payments due within their domestic territory. The prohibited practices consist of clauses in the reciprocal representation agreements concluded by members of CISAC (the “International Confederation of Societies of Authors and Composers”) as well as other concerted practices between those collecting societies. The practices infringe rules on restrictive business practices (Article 81 of the EC Treaty and Article 53 of the EEA Agreement). The Commission decision requires the collecting societies to end these infringements by modifying their…

Satellite TV case to go to ECJ
Competition , Copyright / August 2008
EU
UK

COPYRIGHT / COMPETITION Television, sport By David Pearce writing for the IP Kat In a judgment of over 45,000 words and 98 pages, handed down this morning in the case of the Football Association Premier League & others v QC Leisure & others [2008] EWHC 1411 (Ch), the Honourable Mr Justice Kitchin has delivered a tentative blow against the rights of satellite broadcasters such as BSkyB to protect their exclusive rights to broadcast football games to subscribers in individual EU countries. The three combined actions involved in this case concerned the use of foreign decoder cards in the UK to access foreign transmissions of live Premier League football matches. The claimants complained that the dealing in and use of such cards in the UK involved an infringement of their rights under s.298 of the CDPA 1988, as amended, and of the copyrights in various artistic and musical works, films and sound recordings embodied in the Premier League match coverage. The defendants argued that the use of copyright law to effectively prevent them from using decoder cards in the UK which had been legitimately bought in other EU states was contrary to EC law. Several Directives were cited, the key one being 98/84/EC, also known…

Competition inquiry delays UK broadcasters’ online platform
Competition / August 2008
UK

COMPETITION Television The combination of BBC, ITV and Channel 4 in the proposed new ‘Kangaroo’ online service which will have more than 10,000 hours of classic TV has led to a referral to the Competition Commission. Rival broadcasters including BSkyB have complained that the launch of Kangaroo would risk ‘skewing the market and the Office of Fair Trading made the referral after not being able to make a judgment on whether or not the new venture would limit consumer alternatives. When the venture was launched last year the head of BBC Worldwide said the development was partially motivated by the need to avoid the mistakes made by the record labels when they allowed Apple to corner the market in online download sales and ITV Chief Sir Michael Grade warns that the delay caused by the referral will allow global rivals to steal a march on domestic broadcasters and that the regulatory framework seems “unable to take the most important interest into account – that of the British viewer” The Guardian July 1 st 2008

European Commissioners look at business practices and consumer rights
EU

COMPETITION / COPYRIGHT Music publishing, record labels The Guardian has reported on a draft decision from the European Commission which, if adopted, would lead to major reforms of Europe’s music collecting societies. According to the report, the draft, which has not yet been signed by EU Competition Commissioner Neelie Kroes, berates the fact that the collecting societies operate as monopolies within their national borders, partitioning the EU market on national lines. It gives the collecting societies 90 days to terminate their agreements and calls on them to cross-license. The draft has been criticised for not going far enough to break down national monopolies. The IPKat notes that, from what little information is available, it seems that the Commission isn’t too worried about the notion of collecting societies, but rather about the way in which they operate territorially. This territoriality is understandable, since copyright has grown up as a system of national rights with a slightly different focus in the different Member States. http://ipkitten.blogspot.com/2008_06_01_archive.html http://www.ip-watch.org/weblog/index.php?p=1156 http://www.mcps-prs-alliance.co.uk/monline/news/Pages/EuropeanCommission.aspx Here are edited highlights of what NeelieKroes said at the OpenForum European Breakfast seminar,‘Being Open About standards’ : “It is simplistic to assume that because some intellectual property protection is good, that such protection should therefore be…

European Court overrules Court of First instance on annulment of Sony-BMG merger
Competition , Record Labels / August 2008
EU

COMPETITION Record labels Bertelsmann and Sony Corporation of America v Impala C-413/06 P The European Union’s highest court has set aside the Court of First Instances ruling that annulled the European Commission’s approval of a merger between the Sony Music and BMG record labels. The European Court of Justice also ordered that the lower court to reconsider its decision in order to review three of five pleas it had not dealt with. The court said that “since the Court of First Instance examined only two of the five pleas relied on by Impala, the Court of Justice considers that it is not in a position to give a ruling itself on the dispute. It is accordingly referring the case back to the Court of First Instance”. In July 2006, the lower Court of First Instance threw out the Commission decision at the request of Impala, an independent group of music producers. The lower court said the Commission had taken insufficient care in giving its approval. It should have looked more carefully at whether collective market dominance existed in the music industry and could grow after the merger, the court said. There has been no practical effect of a flurry of…

Big Life Music sale cleared
Competition , Music Publishing / August 2008
UK

COMPETITION Music publishing The UK’s Competition Commission has now formally approved Universal Music Publishing Group’s purchase of Big Life Music bringing the publishing of artists such as Snow Patrol, Futureheads and Badly Drawn Boy into the Universal stable. http://www.billboard.biz/bbbiz/content_display/industry/e3i3a02b4b8960ca28a756947e739f852b2

Visions of an online cartel
USA

COMPETITION Record labels, internet ARTICLE LINK  An interesting blog by Greg Sandoval linking US anti-trust law to the possibility of the major labels jointly participating in an online music subscription service http://www.news.com/8301-10784_3-9867814-7.html?tag=newsmap

It’s not all good news for the labels as Limewire’s defence is thrown out
Competition , Internet , Record Labels / January 2008
USA

COMPETITION Record labels, internet A US federal judge has thrown out Limewire’s defences to the action brought against it by the Recording Industry Association of American on behalf of its label members with Judge Lynch dismissing all claims yesterday by the P2P file-sharing network. LimeWire had claimed that the record industry illegally blocked its attempts to build a legitimate digital music service. The 13 RIAA labels named in the complaint, including the four majors, were accused of price-fixing, hacking LimeWire users, falsely claiming that Lime Wire promotes child pornography, and pressuring artists not to deal with P2P networks – but the judge agreed with the record industry that Limewire had no case saying “the allegations made over child pornography are not a matter for the federal antitrust court”. More worryingly for the labels, Judge Lynch did make some comments on price fixing and was of the opinion that cartel-like behaviour “may have harmed competition generally” although held that Limewire failed to show it specifically had suffered, as allegations under the Sherman Act required (the Sherman Act is the cornerstone of US antitrust laws). The Judge also found that the labels licensing schemes had harmed Limewire saying “[The] mandatory [hash] licensing regime…

Live industry promotes self regulation for ticketing
Competition , Live Events / January 2008
UK

COMPETITION Live events industry The artist management community have launched a new initiative on secondary ticketing by proposing the launch of a Resale Rights Society to regulate concert ticket market. Whilst the UK government has shown an interest in touting and secondary ticket sales, they have put pressure on the live industry to do something about it itself – but the live industry has generally said that is powerless to do anything, and that the government should look to regulate ticket touting in music and entertainment (in a similar way to the regulations that exist in the football industry). Four ‘government summits’ have addressed the issue so far, and a select committee of the Department Of Culture, Media & Sport is currently investigating it further with the results apparently leaked in the Observer newspaper urging a crackdown on touting. The Music Managers’ Forum, with support from the songwriters and music publishers collection societies the MCPS-PRS Alliance, has now decided to make its own proposals and have announced that a coalition of artist managers, who manage over 400 artists between them, including The Verve, Robbie Williams, Arctic Monkeys, KT Tunstall and Radiohead, are launching a new body called the Resale Rights Society which will aim to (i) provide music fans…

EC says collection society guidelines will remain voluntary
Competition , Music Publishing / January 2008
EU

COMPETITION Music publishing The European Commission has said that it currently has no plans to introduce new legislation that would force an overhaul of the publishing royalty collecting societies across Europe but will continue to evaluate the effect of voluntary guidelines already in place that encourage the royalties sector to offer artists, labels and digital music firms more choice in terms of which societies they work with and in offering pan-European licences. The EC has been encouraging the collecting societies to reform the way they operate, partly because of concerns the way each society traditionally dominates in its home country is anti-competitive on a European level, and also because many argue digital music services can only prosper if there is a one stop shop to licence music across Europe. The logic behind the EC’s recommendations is that collecting societies give up certain monopolies they have essentially enjoyed in their home territories and instead take advantage of the opportunities that come from the pan-European royalty market.

EU not planning to regulate online music markets
Competition , Internet / January 2008
EU

COMPETITION Internet The European Commission is currently not drawing up any binding rules to regulate the online music market, despite repeated calls by the European Parliament. At a meeting with MEPs in the legal affairs committee last month (14 November), the commission said: “The submissions analysed so far show that most stakeholders do not see the need for a framework directive, and prefer market-based solutions to regulatory intervention. Commissioner Joe Borg, standing in for his internal market colleague Charlie McCreevy, said “Our recommendation is not detrimental to cultural diversity” referring to Brussels’ suggestion that the copyright market be left to market forces. The full ARTICLE can be seen at http://euobserver.com/9/25235 On digital consumer rights in Europe see http://www.rte.ie/news/2007/1203/murrayj.html

Sky TV case reaches half time in High Court
Competition , Copyright , Internet / January 2008
UK

COPYRIGHT / COMPETITION Television, internet Murphy v Media Protection Services Ltd [ 2007] EWHC 3091 (Admin) The High Court have now made an ‘interim judgment’ in the dispute between UK broadcaster BSkyB and publican Karen Murphy over the latter’s right to show live UK football matches to her customers in the Red, White and Blue pub ( right), Southsea, via Greek station Nova for just £800 a year, instead of paying substantially more for a licence from BSkyB. Lord Justice Pumfrey and Mr Justice Stanley Burnton) dismissed her appeal based on domestic law. Giving judgment, Pumfrey LJ is quoted as saying that BSkyB had the exclusive right to screen or broadcast the matches in question in the UK and it was “apparent” Ms Murphy knew that was the case. However, the court had not heard arguments about whether European competition and free movement legislation might affect the case: “So far as the competition law case is concerned, we do not at present follow how it is to be developed, and this appeal must therefore be restored for these points to be argued if that is what the appellant wants”. The court granted Ms Murphy permission to reopen the appeal at…

Clear Channel to face anti-trust action
Competition , Live Events / December 2007
USA

COMPETITION Live event industry, radio United States District Court Judge Stephen V Wilson has given the green light to a class-action lawsuit that claims that Clear Channel Communications Inc., the USA’s largest media and entertainment company, used its market dominance to illegally inflate ticket prices to live rock concerts across the country. Judge Wilson has granted class-action status to five lawsuits on behalf of concert-goers in regions across the United States which are being lead by the Seattle-based law firm Hagens Berman Sobol Shapiro. The suits claim that Clear Channel used its market dominance in anticompetitive activities that unfairly increased ticket prices for consumers and coerced artists to use Clear Channel for concert promotion. The plaintiffs will claim that Clear Channel uses predatory practices to keep potential competitors from entering regional markets. In some cases, the complaints state, Clear Channel bids up the fees paid to artists so it becomes impossible for other promoters to compete. The complaints also state that Clear Channel’s dominance in FM leads to uncompetitive behaviour. The complaints will also cite a study which indicates that the rate of inflation and Clear Channel’s rise in ticket prices is disproportionate. During the time when Clear Channel’s consolidation…

Just when you thought the Sony-BMG merger debate was all over …
Competition , Record Labels / December 2007
EU

COMPETITION Record labels Having gained approval from the European Commission for the second time, Sony and Bertelsmann AG must be fairly confident that their merger is finally beyond question. But the European independent labels trade body IMPALA is going back to the European Court of Justice and again calling for court’s original Sony BMG merger annulment to be upheld. This annulment of course led to the second EC review. Following a hearing concluded on November 7 th the Advocate General is expected to deliver a non-binding opinion on the appeal on Dec 13th. The case itself will then follow. http://money.cnn.com/news/newsfeeds/articles/newstex/AFX-0013-20805864.htm

OFT explain V2 approval
Competition , Record Labels / December 2007
UK

COMPETITION Record labels The Office Of Fair Trading chaps have published details on their approval of Universal Music’s acquisition of V2 in light of comments from the Association Of Independent Music who have said that the acquisition would stifle competition and narrow consumer choice. OFT says that while it accepts that Universal and V2 were in the same business – that of releasing and marketed recorded music – it does not feel the merger of the two companies’ recorded music operations would have any effect on the wider record industry because the increase in market share of Universal post-V2 purchase was too low to matter – 0.2%-1.4%. saying ” Post-merger, other majors and independents continue to operate as a strong competitive constraint to the merged entity. With the exception of a few third party concerns, which do not lead to any credible theory of harm, third parties generally agree that the increment to Universal’s share of supply is very low and that it will have a negligible (if any) effect on competition. Finally, on the basis of the available evidence, the OFT does not believe that the transaction will give rise to any portfolio effects. Consequently, the OFT does not…

iPhone lock-ins challenged – Vodafone wins round agains iPhine in Germany
Competition / December 2007
Germany

COMPETITION Telecomms ARTICLE LINKS  Last month, Apple was forced by French law to promise that consumers could buy a version of its much-hyped iPhone here without having to be locked into a long-term contract with Orange, the only mobile phone operator offering the new device. Now, the same issue is tripping up Apple’s plans to sell the music-playing cellphone in Germany, the largest European telephone market as Vodafone won a partial victory in the German courts when a temporary injunction granted against T-Mobile under local competition laws. T-mobile had been granted the exclusive right to sell ‘locked’ iPhones in Germany which can only be used on the T-mobile network. In the UK customersw must take out a contract with O2. http://www.iht.com/articles/2007/11/20/business/iphone.php

Japanese trio fined E70 million for tape price fixing cartel
Competition / December 2007
EU
Japan

COMPETITION TV and video Sony, Fuji and Maxell have been fined a combined total of E70 million by European competition regulators for artificially controlling the European videotape market between 1999 and 2002. The three companies control 85% of the professional tape market and in dawn raids in May 2002 the EC discovered evidence of meetings where prices were set and sensitive information swapped as well as three covertly organised price increases during the period. Sony paid a higher fine than the other two companies after employees refused to provide information and one was discovered to have shredded documents during te investigation. The Times 21 November 2007

BMG-Sony merger re-approved as AIM questions Universal’s label acquisitions
Competition , Record Labels / November 2007
UK

COMPETITION Record labels The European Commission have now formally re-approved their July 2004 merger approval of Sony and BMG’s record labels which was annulled in 2006 by the European Court of First Instance. The EC Competition Commissioner Neelie Kroess said that the “investigation represents one of the most thorough analyses of complex information ever undertaken by the Commission” adding that “It clearly shows that the merger would not raise competition concerns in any of the affected markets.” But in the same week UK independent labels trade body the Association of Independent Music, which is part of IMPALA, the European trade body which first complained about the Sony-BMG merger, responded to a request for information from the Office of Fair Trading (OFT) regarding Universal’s “creeping dominance” of the UK recorded music market. Having already complained about the Sony-BMG merger which put 80% of the recorded music market into the hands of just four companies (Universal, Sony-BMG, Warners and EMI), AIM are now citing Universal’s recent acquisition of two of the UK’s largest independents, V2 and Sanctuary Records as evidence of Universal’s “progressive expansion” which will “further marginalise the independent sector, serving to stifle competition and narrow consumer choice”.  Market consolidation means…

Ticketmaster seek to block automated access by secondary retailer
Competition , Live Events / November 2007
EU
UK
USA

COMPETITION Live event industry The furor over the state of the secondary ticket marketing in the is moving to the courts. Ticketmaster is seeking a preliminary injunction to stop RMG Technologies from accessing the Ticketmaster system through automated programmes (a tactic which provides resellers with repeated access to Ticketmaster.com via a proxy server). www.billboard.biz

Judgment of the Court of First Instance in Case T-201/04
Competition / November 2007
EU
USA

COMPETITION Technology, software Microsoft Corp. v Commission of the European Communities Microsoft have announced that they will not be appealing against the recent CFI decision and European Competition Commissioner Neelie Kroes said in a speech on the 22 nd October “I want to report to you today that Microsoft has finally agreed to comply with its obligations under the 2004 Commission decision, which was upheld last month by the Court of First Instance. The Commissioner went on to confirm that Microsoft would now provide information allowing third party developers of work group server operating systems to develop products that interoperate with the Windows desktop operating system on terms acceptable to the Commission and that Microsoft had slashed patent royalty rates for interoperability information from 5.95% to 0.4% – less than 7% of the royalty originally claimed. The Commissioner also confirmed that there would now be a one of payment for access to secret interoperability information on software developed using licensed information and that Microsoft would make interoperability information available to open source developers and that Microsoft would give legal security to programmers who help to develop open source software and confine its patent disputes to commercial software distributors and end…

Judgment of the Court of First Instance in Case T-201/04
Competition / October 2007
EU
USA

COMPETITION Technology, software Microsoft Corp. v Commission of the European Communities The Court of First Instance has essentially upheld the European Commission’s decision finding that Microsoft had abused its dominant market position although the Court has annulled certain parts of the decision relating to the proposed appointment of a monitoring trustee holding that this has no basis in community law. On 23 March 2004 the European Commission adopted a decision finding that Microsoft had infringed Article 82 of the EC Treaty by abusing its dominant position by engaging in two separate types of conduct. The Commission also imposed a fine of more than EUR 497 million on Microsoft. The first type of conduct found to constitute an abuse consisted in Microsoft’s refusal to supply its competitors with ‘interoperability information’ and to authorise them to use that information to develop and distribute products competing with its own products on the work group server operating system market, between October 1998 and the date of adoption of the decision. By way of remedy, the Commission required Microsoft to disclose the ‘specifications’ of its client/server and server/server communication protocols to any undertaking wishing to develop and distribute work group server operating systems. The second type of…

RIAA spend $658,000 on lobbying but should Sound Exchange be ‘lobbying’ at all?
Competition / September 2007
USA

COMPETITION All areas The Recording Industry Association of America spent more than $658,000 in the first half of 2007 to lobby the federal government, according to a disclosure form. The trade group lobbied on intellectual property and copyright issues, including more funding for enforcement, according to the form posted online Friday by the Senate’s public records office. Under 1995 federal law, lobbyists are required to disclose activities that could influence members of the executive and legislative branches. But in other news, it appears collection society Sound Exchange who collect for the erformaqnce of recorded music by way of interenet and satellite media has also spent money lobbying and PR as part of its musicFIRST campaign – and US commentators are now claiming that such activities are not permitted under the US Copyright Act. One lawyer added “t he lobbying efforts do exceed the legislative and regulatory authority given to SoundExchange. I also believe that the lobbying activity on a matter outside the scope of SoundExchange’s original charter constitutes a violation of the 501 (c) (6) tax-exemption held by SoundExchange“ saying that Sound Exchange should only be spending money on collecting, administering and distributing royalties from the use of recorded music….

Does China discriminate against foreign copyrights?
Competition , Record Labels / August 2007
China
USA

COMPETITION Record labels, film & TV The United States is seeking urgent consultations with China over China’s rules on music downloading and cinema rights that The US say discriminate against foreign sound recordings and films. Hollywood studios and U.S. Internet music providers such as Apple Inc.’s iTunes store could be among the groups that suffer from “less favorable distribution opportunities” for imported films and foreign suppliers of music recordings in China, which the U.S. cited in a World Trade Organization request in July. The main issue is that music from foreign sources needs to undergo content review before being distributed in China. Chinese music doesn’t have to face that process and it is suggested that these reviews delay Chinese Internet providers and Chinese consumers from accessing foreign music. The same discrimination exists when Chinese consumers seek to download music onto mobile phones the US allege. The problem for American music providers is compounded by rules that prevent foreign companies from owning or investing in businesses that distribute music over the Internet. We are not quite sure about this one at Music Law Updates – whilst seen in the strict headlights of competition law that screening of foreign music may seem…

European Commission finally reopens Sony BMG review
Competition , Record Labels / July 2007
EU

COMPETITION LAW Record labels The European Commission has reopened its antitrust probe into the merger of Sony’s recorded music division and Bertelsmann’s recorded music divisions which created Sony BMG – the second largest music company in the world. The commission halted its review of the merger in March after both companies failed to produce crucial documentation on their activity in the European market. “The file is finally complete and the probe has been re-launched,” said a Commission spokesman. A new deadline has been set, with a ruling expected by 10th October. The delay has had significant impact on the industry – whilst the music publishing arms of Universal and BMG have been allowed to merge (after a significant shedding of certain catalogues by BMG including Zomba) the delay is not helpful for Warner Music Group which still looks like it would like to buy EMI – and clearly EMI is up for sale and on the verge of signing itself away to private equity firm Terra Firma. The resurfacing of merger issues could hinder any last-minute bids by Warner for the major. www.forbes.com blogs.reuters.com

Universal / BMG Music tie up approved by European Regulators as Warners look at EMI
EU

COMPETITION Music publishing, Record labels Vivendi/Universal and BMG Music Publishing have finally had their merger given the green light by the European Commission. The E1.63B merger was approved on the grounds that Rondor UK, Zomba UK, BBC Music and 19 Music were excluded from the merger. Immediately after the announcement, independent labels association Impala was quick to point out that it reserves the right to seek a reversal of the decision, and said it will follow the merger with great interest – no doubt Warners, who are hovering over EMI, will do the same! The ECsaid in a statement “The proposed merger, as initially notified, raised serious doubts as regards adverse effects on competition in the market for music publishing rights for online applications. However, the Commission’s investigation found that these concerns would be removed by the remedies package proposed by the parties concerning the divestiture of a number of publishing catalogues”. In fact EMI Group has agreed to an offer by private equity firm Terra Firma for £2.4B, subject to approval by the firm’s shareholders. The board of directors at EMI intend to recommend unanimously that EMI shareholders should accept the offer. EMI’s shares jumped 10% on the news – the offer vaues…