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SGAE fined €2.95m for anti-competitive practices

In the latest of a series of sanctions against Spanish collection society SGAE, the national competition watchdog imposes a fine for abuse of dominant position

By Anna Grace on 03 Jun 2019

SGAE faces more sanctions

SGAE HQ in Madrid


image © Luis García

The Spanish competition regulator has fined national collection society SGAE €2.95 million for anti-competitive conduct, just days after the society’s expulsion from international authors’ rights association Cisac.

The national commission of markets and competition (Comisión nacional de los mercados y la competencia – CNMC) imposed the fine following the conclusion of a two-year investigation into actions undertaken by SGAE, known as the Sociedad General de Autores y Editores in Spanish.

The fine is the second that SGAE has received in the space of a few weeks. On 7 May, the Supreme Court approved of a €3.1m fine against the collection society, in a move lauded by Spanish promoters’ association the Asociación de Promotores Musicales (APM). The sanction was first proposed by the CNMC in 2014, in relation to SGAE’s “abusive” 10% concert tariffs.

The recent investigation into SGAE conduct finds evidence of “single and continued infringement” of free competition and European Union law.

The CNMC states that SGAE imposes contractual conditions to limit the freedom of its members. The society prevents members from attributing the management of only a part of their intellectual property rights by grouping rights into designated categories which cannot be managed separately. Members are also unable to revoke or partially withdraw the management of rights.

Through this practice, reports the watchdog, the society “has created obstacles to the free management of rights and the development of management entities other than the SGAE, making competition difficult.”

“[SGAE] has created obstacles to the free management of rights and the development of management entities other than the SGAE, making competition difficult.”

The watchdog also reports that the society has abused it position in relation to public broadcast rights, by bundling musical and audiovisual rights together and providing no itemised price breakdown for clients.

The joint sale, or bundling, occurs in the hospitality and catering sectors. As a result of the bundling, users wishing to offer musical content are obliged to acquire the audiovisual rights at the same time. CNMC states this impedes alternative offers from other management entities, given that SGAE is the only operator offering public reproduction and broadcast rights for musical content.

The investigation also finds that the lack of itemised price breakdown prevents users from determining the actual costs incurred by their use and therefore from comparing SGAE charges to offers from possible competitors.

Complaints from audiovisual authors’ rights group Dama (Derechos de Autor de Medios Audiovisuales, Entidad de Gestión) and collection society Unison sparked the investigation.

“At Unison we celebrate the decision of the Spanish regulator, which helps to guarantee free competition in the market of music rights management,” says Unison chief executive Jordi Puy.

The companies involved have two months to appeal the resolution through the national court.

The fine comes at a time of turbulence for the Spanish society. Cisac expelled SGAE as a member on Thursday 30 May for failing to implement reform. SGAE has been embroiled in controversy surrounding a scandal known as ‘the wheel’ (la rueda) since 2017.

 


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