{"id":1588,"date":"2024-07-02T22:03:36","date_gmt":"2024-07-02T22:03:36","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/spanish-collecting-society-sgae-fined-7m-for-anti-competitive-conduct\/"},"modified":"2024-07-02T22:03:36","modified_gmt":"2024-07-02T22:03:36","slug":"spanish-collecting-society-sgae-fined-7m-for-anti-competitive-conduct","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/spanish-collecting-society-sgae-fined-7m-for-anti-competitive-conduct\/","title":{"rendered":"Spanish Collecting Society SGAE Fined $7M for Anti-Competitive Conduct"},"content":{"rendered":"\n
\n

\n\tThe Spanish Society of Authors and Publishers (abbreviated SGAE in Spanish) has been fined 6.38 million euros (more than $6.9 million, using the average 2023 conversion rate) by the Comisi\u00f3n Nacional de los Mercados y la Competencia (CNMC) for anti-competitive practices related to its licensing deals with radio and TV stations.<\/p>\n

\n\tSGAE has been fined for \u201ctwo infractions of abuse of dominant position\u201d by designing and applying its licensing rates in a manner that forces radio and TV operators to accept an \u201caveraged availability rate\u201d (comparable to a flat rate) to be able to use its repertoire, according to a CNMC press release<\/a> on Wednesday (June 26).<\/p>\n

\n\tThe widespread application of the flat rate by the Spanish collecting society \u201chas had a double anti-competitive effect,\u201d the CNMC says. The first effect, which the CNMC refers to as \u201cexploitative abuse,\u201d results from SGAE\u2019s practice of forcing licensees to pay the flat rate \u201cunrelated to the actual use they make of their repertoire, both in terms of the number of works and the intensity of their use,\u201d according to the release, which states this practice has been ongoing since \u201cat least\u201d Jan. 1, 2016. <\/p>\n

\n\tBecause licensees are forced to pay the flat rate regardless of the extent of their use of SGAE\u2019s repertoire, the CNMC adds, licensees\u2019 incentives to contract with SGAE competitors with less substantial repertoires are limited \u2014 a second anti-competitive effect that hinders \u201cthe entry and expansion\u201d of those competitors in the marketplace.<\/p>\n

\n\tAccording to the CNMC, SGAE \u201cenhanced\u201d the latter effect \u2014 which it says SGAE instituted from \u201cat least\u201d Jan. 1, 2016, through Dec. 31, 2017 \u2014 by \u201cpresenting its musical repertoire to users as universal and offering guarantees of indemnity against possible claims by third parties for the use of rights that do not belong to its repertoire.\u201d The CNMC argues this further limited incentives for licensees to contract with SGAE competitors.<\/p>\n

\n\tIn addition to fines, SGAE has been ordered to cease these behaviors.<\/p>\n

\n\tInvestigations into SGAE began after complaints were made by audiovisual media copyright entities Management Entity (Dama) and Unison Rights, S.L. (Unison), the release states.<\/p>\n

\n\tIn an extensive statement sent to Billboard<\/em>, SGAE said \u201cboth findings\u201d reached by the CNMC are \u201cclearly flawed.\u201d Among other things, the organization denied it forces licenses to pay the average availability (i.e. flat) rate, writing that the CNMC \u201cdecision ignores or attempts to minimise both the fact that SGAE also offers users an effective use tariff, and, above all, the basic fact that it is the users themselves who opt for one or other type of tariff, based on what they consider to be the most appropriate for their interests.\u201d<\/p>\n

\n\tTo the second claim accusing SGAE of blocking the \u201centry and expansion\u201d of competitors by, in part, misrepresenting the rights it represents, SGAE says it \u201ckeeps a permanently updated database of the works comprising its repertoire, to which all operators have access\u201d and that it only offers licensees \u201cthe rights that it is entrusted with, and therefore, it is not true that it claims to represent the repertoires of third parties.\u201d<\/p>\n

\n\tThe statement concludes, \u201cSGAE thus radically disagrees with the CNMC\u2019s decision and is already preparing its appeal with the Audiencia Nacional (National High Court).\u201d You can read the response in full below.<\/p>\n

\n\tEarlier this year, Billboard<\/em> reported SGAE\u2019s intentions to improve its reputation under new CEO Cristina Perpi\u00f1\u00e1-Robert<\/strong>, who was appointed a little more than a year ago.<\/p>\n

\n\t\u201cSGAE is one of the world\u2019s leading CMOs, with a crucial role to play for its members,\u201d Perpi\u00f1\u00e1-Robert previously said. \u201cThis year is our 125th anniversary, which is a chance to celebrate what we\u2019ve achieved but also highlight where we need to reform. I\u2019m determined that SGAE should achieve a greater presence internationally.\u201d<\/p>\n

\n\tLast year, SGAE took in 349.1 million euros ($377.8 million, based on the 2023 average conversion rate) and distributed 354.1 million euros ($383.2 million), according to its 2023 financial results, while the number of members with authors rights grew from 36,956 to 83,148.<\/p>\n

\n\tFull SGAE response:<\/strong><\/p>\n

\n\tWith respect to the\u00a0recent Decision of the Spanish Competition authority (CNMC) which accuses SGAE of conducts allegedly constituting abuse of a dominant position, based on the structure and design of SGAE\u2019s broadcasting tariffs for musical and audiovisual works, and for presenting SGAE\u2019s repertoire as universal, SGAE would like to make the following observations.<\/em><\/p>\n

\n\tBoth findings are, in SGAE\u2019s view, clearly flawed.<\/em><\/p>\n

\n\tSGAE\u2019s tariffs offer broadcasters a flat rate\/availability tariff and an effective use tariff, as required by the Spanish Copyright Law. This is an obligation applied to all collective management societies and which SGAE scrupulously complies with. Furthermore, the availability tariffs are an absolutely common phenomenon in many sectors (for example, telephone or television flat rates, etc.), which tend to favour, cheapen, and simplify users\u2019 and consumers\u2019 use of products or services. For this reason, establishing and applying an availability-based fee cannot be considered to constitute abusive conduct.<\/em><\/p>\n

\n\tThe CNMC\u2019s decision ignores or attempts to minimise both the fact that SGAE also offers users an effective use tariff, and, above all, the basic fact that it is the users themselves who opt for one or other type of tariff, based on what they consider to be the most appropriate for their interests.<\/em><\/p>\n

\n\tIt is, therefore, radically disingenuous that, as the CNMC states,\u00a0<\/em>\u201call radio operators and the vast majority of television operators have had to use an \u201caveraged availability fee\u201d (comparable to a flat rate) in order to be able to use their repertoire\u201d.\u00a0It is the broadcasters themselves who have mostly opted to use the averaged availability fee. However, some operators have opted to use the effective usage tariff, including in particular the Spanish public broadcaster, RTVE \u2013 a fact that the CNMC endeavours to minimise \u2013 which proves that, contrary to what the CNMC also claims, the effective usage tariff does represent a real alternative to the averaged availability fee. More importantly, both tariffs have been established based on economic studies that have applied consistent criteria, to ensure that both tariffs are consistent and reasonable.<\/em><\/p>\n

\n\tThe CNMC\u2019s first accusation is therefore unfounded.<\/em><\/p>\n

\n\tThe same applies to the second allegedly abusive practice. SGAE keeps a permanently updated database of the works comprising its repertoire, to which all operators have access. Thus, they are always fully aware of which works form part of SGAE\u2019s repertoire, and which do not.<\/em><\/p>\n

\n\tGiven that other collective management societies and other rights management entities have emerged in Spain which can manage the same types and categories of rights, SGAe only offer users the rights that it is entrusted with, and therefore, it is not true that it claims to represent the repertoires of third parties.<\/em><\/p>\n

\n\tIt is also important to recall that in December 2023, the National High Court already annulled a previous ruling issued by the CNMC in 2019 for similar grounds (Judgment dated December 19, 2023). Additionally, the CNMC\u2019s latest decision ignores its own legal precedents as it had already validated SGAE\u2019s Broadcasting tariffs in previous cases without raising any competition concerns.<\/em><\/p>\n

\n\tSGAE thus radically disagrees with the CNMC\u2019s decision and is already preparing its appeal with the Audiencia Nacional (National High Court).<\/em><\/p>\n

\n\tUPDATE:<\/strong> This story was updated on July 2 at 1:27 p.m. ET to add a statement by SGAE.<\/em><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The Spanish Society of Authors and Publishers (abbreviated SGAE in Spanish) has been fined 6.38 million euros (more than $6.9 million, using the average 2023 conversion rate) by […]<\/p>\n","protected":false},"author":1,"featured_media":1589,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[2264,2261,1591,2263,2262,1042,2260],"class_list":["post-1588","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-anticompetitive","tag-collecting","tag-conduct","tag-fined","tag-sgae","tag-society","tag-spanish"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/1588","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=1588"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/1588\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/1589"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=1588"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=1588"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=1588"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}