ACCC proposes new conditions for performing rights agreement

Wednesday 16 October 2013 @ 1.17 p.m. | IP & Media | Trade & Commerce

In Australia, the Australasian Performing Right Association (APRA) holds the rights for the performance of almost all music. A substantial number of businesses, including retail businesses, hospitality venues and broadcasters, have to buy a licence from APRA to broadcast music. 

APRA allocates the royalties to its member composers, songwriters and music publishers who rely on APRA to collect their royalties. APRA’s exclusive role means it operates as an effective monopoly and, since 1999 has been given authorisation by the ACCC.

Authorisation affords statutory protection from court action for conduct that might otherwise raise alarms under the competition provisions of the Competition and Consumer Act 2010 (Cth). In general, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

ACCC Commissioner Dr Jill Walker recently explained:

“the ACCC accepts that APRA’s arrangements provide users with transaction cost savings by providing instantaneous access to APRA’s entire repertoire. The exclusivity of APRA’s arrangements also results in enforcement and monitoring efficiencies...On the other hand, as a virtual monopoly, APRA has significant market power in relation to its dealings with users and its arrangements can also create inefficiencies for its members.”

APRA’s existing authorisation expires on 31 October 2013 and the ACCC has released a draft decision regarding authorisation to continue the current arrangements for a further three years. The ACCC released the draft decision after considering a number of submissions, deciding to grant authorisation to APRA subject to a range of new conditions. The proposed conditions have been developed in consultation with APRA and seek to address concerns raised by APRA users, particularly small business users. These concerns included difficulty understanding APRA’s licensing system and a limited ability to dispute APRA’s decisions. 

 The ACCC is proposing a number of conditions which, in particular, will benefit small businesses in their dealings with APRA:

  • Require APRA to make a plain English guide to its licensing schemes improve its dispute resolution process;
  • Create a guide and education campaign for its ‘licence back’ and ‘opt out’ programs, which allow APRA members to enter into direct licensing arrangements with users for their works. The licence back option was introduced as a condition of authorisation by the Australian Competition Tribunal in 1999 to encourage competition where possible.

The ACCC is now inviting submissions on the conditions in the draft decision before making its final decision.  In the meantime the ACCC is considering granting interim authorisation to allow APRA to continue its arrangements for the acquisition and licensing of performing rights in music, while the ACCC considers the substantive application. Submissions in relation to interim authorisation are also being sought.  

TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.

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