Last week, the General Court (“GC”) adopted its judgment in the CISAC case whereby it partially annulled the 2008 Commission’s decision. CISAC is an international organisation which represents collecting societies. Collecting societies manage copyright acquired either directly from the authors (e.g., of musical works) or indirectly from other societies and grant exploitation licenses of such rights to commercial users. CISAC drew up a model contract for Reciprocal Representation Agreements (“RRAs”) between societies. The Commission did not question the necessity for collecting societies to cooperate through RRAs but it did found that there was a breach of Article 101(1) TFEU as regards (i) the membership clause of the model contract, which restricted the authors’ ability to affiliate freely to the collecting society of their choice; (ii) the exclusivity clause of the model contract, whereby collecting societies were given absolute territorial protection to grant copyright licences in their territory; and (iii) the existence of national territorial limitations in all RRAs, which the Commission considered as being the result of a concerted practice. No fine was imposed on CISAC nor on the collecting societies.
CISAC appealed against the Commission’s decision in relation to the concerted practice allegations. As it had already amended the model contract before 2008, it did not contest the Commission’s findings on membership and exclusivity clauses. In its appeal, CISAC alleged that the Commission had not proved the existence of a concerted practice and that, in any event, such a practice would not be restrictive of competition. The GC applied the standard in PVC II and looked at (i) whether the Commission had documentary evidence supporting its findings and if not, (ii) whether it had rendered implausible all other explanations of the societies’ parallel conduct before concluding that it involved a concerted practice.
-- The Commission itself accepted that there was no documentary evidence (para. 103). Interestingly, the GC criticised such an absence of documents given that the Commission was supported in its investigation by certain collecting societies which wished to abandon the RRAs and which could easily provide documentary evidence (para. 104).
-- The GC then turned to examine whether the Commission had collected sufficient evidence to render implausible all other explanations of the parallel conduct before concluding on the existence of a concerted practice. The GC considered that the need to monitor and fight against unauthorised use of musical works in each territory was a plausible explanation for the existence of national territorial limitations (para. 181). This is well in line with the principles established by the CJEU in Tournier and Lucazeau (para 137). The GC found that the Commission had not convincingly justified why the monitoring explanation was implausible (paras. 134-180).
Another interesting point in this case is that in its decision the Commission only challenged the territorial restrictions with respect to three forms of commercial exploitation – via internet, satellite and cable. However, the GC pointed out that the model contract and the RRAs had been in place years before these technologies developed (para. 129). The arrival of new technologies cannot automatically turn existing structures for collective management into anti-competitive behaviour (para. 130).
The GC judgment offered welcome clarifications on the notion of concerted practice for collecting societies but also has ramifications beyond the field of Competition Law. For example, it will likely influence the discussions regarding the Directive Proposal on collective management of copyright and related rights for online uses of musical works in the internal market.