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Santiago Agreement

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Overview Edit

The Santiago Agreement was signed in October 2000 by five music royalty collecting societies, including BMI and four European organizations. This Agreement sought to deal with the problems that traditional copyright licensing schemes face in light of the Internet and other new technologies. Prior to the agreement, someone wishing to license music for online use was required to negotiate individually with every national collecting society, since those societies controlled the use of music in their respective countries.

The Santiago Agreement sought to adapt the traditional framework for the online world by allowing each participating society to grant a single copyright license that would include the music repertoires of each of the member societies and would be valid in all of their territories. However, only the collecting society of the country where the content provider had its actual and economic location was able to grant such a license.

European Union Edit

The Agreement was notified to the European Commission in April 2001 by collecting societies in the UK (PRS for Music), France (SACEM), Germany (GEMA) and the Netherlands (BUMA). Later, all of the other collecting societies in the European Economic Area joined in the notification (except for Portugual (SPA) and Switzerland (SUISA)).

In May 2004, the European Commission announced[1] that, while it supports the "one-stop shop" principle for online licensing, it also considers that such crucial developments in online-related activities must be accompanied by an increasing freedom of choice for EU consumers and commercial users as regards their service providers.[2]

According to the Commission, the structure put in place by the parties to the Santiago Agreement results in commercial users being able to apply for the licence from only the collecting society established in their own Member State. This, says the Commission, could be in breach of competition rules.

The Commission considers that the territorial exclusivity afforded by the Santiago Agreement is not justified by technical reasons and is irreconcilable with the worldwide reach of the internet.

It considers that the lack of competition between national collecting societies in Europe hampers the achievement of a genuine single market in the field of copyright management services and may result in unjustified inefficiencies as regards the offer of on-line music services, to the ultimate detriment of consumers.[3]

Thereafter the Dutch (BUMA) and Belgian (SABAM) collecting societies notified the European Commission that they had decided to end their participation in the Santiago Agreement.[4]

The European Commission decided in 2008 that the cross-licensing agreements were in violation of competition law.

References Edit

  1. See "Commission opens proceedings into collective licensing of music copyrights for online use," Press Release IP/04/586 (May 3, 2004).[1]
  2. "Music Royalties Deal Breaks Competition Law, says Commission," OUT-LAW News (May 4, 2004).[2]
  3. Id.
  4. "Commission Consults on Music Royalties Deal," OUT-LAW News (Aug. 17, 2005).[3]

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