The Australian Competition and Consumer Commission has issued its draft determination on eight applications for authorisation and one notification, which were lodged by the Australasian Performing Right Association Limited (APRA).
The applications and notification relate to possible breaches of sections 45 and 47 of the Trade Practices Act arising from APRA's standard arrangements for acquisition and licensing of performing rights in its music repertoire.
APRA owns the performing rights in the vast majority of musical works in which copyright exists in Australia (both Australian and overseas works). APRA's arrangements in respect of those works fall into four categories:
Input arrangements - the assignment by composers to APRA of performing rights in their music and the terms upon which membership is granted to the composers by APRA; Output arrangements - the licensing arrangements between APRA and users of musical works (such as television and radio broadcasters and businesses that play music in public); Distribution arrangements - the arrangements pursuant to which APRA distributes money (derived from licence fees) to its members for the use that has been made of their musical works; and Overseas arrangements - the reciprocal, exclusive arrangements between APRA and overseas collecting societies where each grants to the others the right to licence the musical works in their repertoires.
The applications were opposed by the Federation of Australian Commercial Television Stations (FACTS). Many other submissions both in support of and opposing the applications, were also received from other interested parties and industry participants.
The ACCC has issued a lengthy draft determination in which it discusses the industry and the submissions received and assesses the anti-competitive detriments and the public benefits that arise from APRA's arrangements.
In its draft determination the ACCC proposes that:
authorisation be granted for four years for APRA's input and output arrangements in so far as they relate to public performance rights (but not live public performance rights) provided that APRA sets up an independent appeal mechanism for users; authorisation not be granted in relation to APRA's input or output arrangements in so far as they relate to live public performance rights and broadcast rights unless and until the following issues can be resolved to the ACCC's satisfaction: members should not being required to assign to APRA live public performance rights and broadcast rights in all works (present and future) as a requirement of membership; members should be entitled to opt out of the APRA System for some or all live public performance rights and broadcast rights, for some or all works whilst remaining an APRA member; licence fees should take account of members' decisions to opt out for some or all live public performance rights or broadcast rights in some oral works; and notice for withdrawal of membership for all members should be reduced from three years to six months. authorisation not be granted in relation to APRA's distribution arrangements unless and until the issues above are resolved to the satisfaction of the ACCC; authorisation not be granted in relation to APRA's overseas arrangements; and the notification be allowed to stand at this time.
The ACCC considers that overseas experience shows that arrangements different to those of APRA do work and that competition bodies elsewhere have required collecting societies to let members retain the right to licence directly all or some of their performing rights and to open up their restrictive practices to enable alternatives to arise.
The ACCC recognises that if an opt-out option is created for APRA members, the members who choose to exercise their own rights may be at a disadvantage in their bargaining power vis-a-vis large users such as television broadcasters. The ACCC would be prepared to consider alternative mechanisms intended to overcome this imbalance.
APRA and interested parties have until close of business on 18 November 1996 within which to request a conference in relation to the matter. Should a conference be called, it will be held as soon as possible after that date but, in any event, no later than 18 December 1996.
The ACCC welcomes submissions in relation to its draft determination.
