ACCC Calls For Feedback On APRA Licensing Arrangements

Friday 14 June 2019 @ 3.06 p.m. | Legal Research

On 5 June 2019, the Australian Competition and Consumer Commission (‘the ACCC’) announced that it was looking into the Australasian Performing Right Association’s (‘APRA’) request to reauthorise its musical works licensing arrangement and released a draft determination.

What is APRA?

APRA is an Australian music rights organisation established in 1926 to manage the performance and communication rights of its members. Today, APRA represents over 100,000 members in the music industry, including songwriters, composers and music publishers. APRA offers licenses to organisations to allow them to play, perform, copy, record or make available their members’ music. The royalties are then distributed to the members.

Currently, APRA and its members hold performing rights for nearly all music played or performed in Australia. The ACCC notes that in most instances, members assign rights exclusively to APRA. Businesses that then play a member’s music, including retailers, cafes, bars and broadcasters, need to obtain and pay for a license from APRA. The fees are then distributed by APRA to its members.

APRA’s current arrangements are due to expire on 28 June 2019.

The Licensing Arrangement

APRA is seeking reauthorisation for its licensing arrangements from the ACCC, in order to ensure that they do not breach any competition provisions of the Competition and Consumer Act 2010 (CTH).

The licensing arrangements will cover input, output and distribution arrangements. Input arrangements are the assignment of performance and communication rights by members to APRA. The terms of this is usually determined by the membership the artist has with APRA. Input arrangements also include APRA’s agreements with similar overseas societies, in which such collecting societies grant each other exclusive rights to license works that they respectively control. Output arrangements are licensing agreements between APRA and users of the musical works. Distribution arrangements are how APRA then pays relevant member artists their fees collected from licensees and users.

Deputy Chair of the ACCC, Mick Keogh comments in the media release:

“It’s more efficient for APRA members to collect royalties jointly, rather than every artist having to collect their own royalties and monitor compliance… However, APRA already has a near-monopoly, and the exclusivity provisions it has with artists makes its position even stronger. This raises a risk of higher prices for businesses that play music, and other inefficiencies or restrictions for APRA members.”

The ACCC is proposing to grant reauthorisation for a period of five years, however, with additional conditions to strengthen transparency and protection for songwriters and small businesses when dealing with APRA. This is in light of the submissions received by the ACCC of stakeholders concerned with the lack of transparency in the current system and APRA's growing market power in the industry.

Under the draft decision, the ACCC proposes that APRA would be further required to:

  • Publish information about the calculation of license fees
  • Produce a plain English guide in regards to its distribution policies
  • Publish an annual transparency report containing information on its rights revenue, operation costs and payments to members
  • Continue the ‘Resolution Pathways’ alternative resolution scheme (‘Resolution Pathways’)

Resolution Pathways is an alternative dispute resolution scheme established following the ACCC’s reauthorisation of APRA’s licensing agreements in June 2014. It is designed to provide an independent and trained facilitator, give access to resolvers and allow music creators in dispute access to peers for an exchange of experiences.

Consultation on the ACCC’s draft decision is currently open. The final determination is set to be released in August 2019. Further details on the consultation and progress of the determination can be found on the ACCC website.

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