Spanish competition authority to open antitrust case against authors society SGAE

The Spanish Competition Authority (CNMC) plans to initiate antitrust proceedings against Spanish Authors society SGAE, for alleged “abuse of dominant position”.

The investigation is being launched at the request of Unison, a Barcelona-based Independent Management Entity (IME) organization.

According to a press release issued by Unison, the market’s regulatory body is looking into “reasonable evidence that SGAE has committed several infringements of Articles 2 of the Competition Act and 102 of the Functioning Treaty of the European Union”.

Those alleged infringements, according to Unison, are in relation to “the design and application of blanket licenses in the television and radio markets, with market foreclosure effects,” and “the licensing of the repertoire it manages to users on an allegedly universal basis”.

This is the second file opened against SGAE at the request of UNISON. In May 2019, the regulator resolved another disciplinary file for alleged “abuse of a dominant position”.

In that separate case, notes UNISON, the anticompetitive acts took place in relation to SGAE’s “management contract and bylaws, as well as several public performance tariffs”.

The market regulator has a maximum period of 18 months to resolve the new case.

Meanwhile, UNISON has also announced that it has filed a lawsuit against national Spanish against broadcaster, Corporación de Radio y Televisión Española, SA (RTVE) – for the alleged infringement of intellectual property rights over works from UNISON’s managed musical repertoire, in ehat it says are “the aspects of reproduction, mechanicals and public performance”.

According to UNISON, the alleged infringement was caused by the lack of a license by RTVE to “carry out acts of exploitation” on the works managed by UNISON.

“SGAE is convinced that its rates and licences, which have been recently modified, are in accordance with the competition legislation.”

SGAE spokesperson 

In a statement provided to MBW, an SGAE spokesperson said: “SGAE is convinced that its rates and licences, which have been recently modified, are in accordance with the competition legislation, and it will demonstrate this in the newly initiated case.

“In this sense, remember that, as the The Spanish Competition Authority (CNMC) itself says, the initiation of this case does not prejudge the final result of the investigation”.

Today’s news follows SGAE’s re-admittance to CISAC, the International Confederation of Societies of Authors and Composers, back in March 2021, following its expulsion back in May 2019.

SGAE was temporarily kicked out of CISAC in May 2019 as a result of what the latter org calls a “violation of the international confederation’s rules, discriminatory treatment of rights holders and irregularities in its royalties distributions”. 

CISAC stated at the time that its Board of Directors decided to re-admit SGAE after, what it described as, “a thorough review of all changes in the society’s practices that have been implemented with the support of CISAC over the last three years”.

UPDATE: A CISAC spokesperson tells MBW that it “has taken note of the competition enquiry concerning its member music society in Spain, SGAE”.

They added: “This is at a preliminary stage, and we are seeking more details.  We note this action is local in nature and responds to complaints by two competitors in the Spanish market:  Unison, which is a CISAC client, and DAMA, which is a CISAC member for audiovisual repertoire.

“Based on the limited information available, the enquiry involves competition law at a national level.  This appears to be outside CISAC’s remit in upholding international best practices by its member societies.

“SGAE was re-admitted to CISAC membership in March 2021 after making substantial reforms to comply with the Confederation’s international standards.  These reforms included major changes in the society’s governance practices, Board composition, decision-making processes and transparency levels.”

A sanction procedure brought against SGAE by CISAC took place at the end of 2018, following complaints from music publishers of ‘discriminatory treatment of rightsholders and unfair practices relating to the distribution of royalties’.

Those ‘unfair practices’ referred to a so-called ‘scam’ nicknamed ‘The Wheel’, which saw music owned by certain SGAE members suspiciously played throughout the night on some Spanish TV channels, with the relevant rights-holders then able to lay claim to the associated performance royalties.Music Business Worldwide

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