Directive on Collecting Societies
The European Union's legislative process is not a simple one: in a series of small steps, the Commission, Member States and EU Parliament are working to reach a final compromise. A text for a Directive on Collecting Societies has now been agreed and in place since the beginning of November and will become effective in the spring of 2014. Germany will then have another two years to transpose it into national law. VG Bild-Kunst will – wherever possible – start straight away with its implementation, because this process can be expected to take some time.
New Provisions at a Glance
Copyright licences cross borders. For this reason, the European Commission had already for some years been planning to issue a directive covering the work of collective management organisations, in order to create a consistent basis for their activities in the Single Market. Rather than providing for extensive regulation, the draft presented in the summer of 2012 put the focus on two aspects: strengthening the rights of members and, regulating a special field – namely cross-border licensing of online music rights in Europe. The most important new features for members are outlined below:
- The Directive makes it clear that rightholders have a free choice as to which of their rights they wish to entrust to which European collecting societies. It is perfectly possible to be a member of several collecting societies, for example for different categories of rights or different countries.
- The Directive stipulates that rightholders should still be able to themselves grant licences for the non-commercial use of their works, even if they are a member of a collective management organisation.
- Each rightholder may terminate the contractual relationship with a collecting society by giving no more than six months’ notice (to the end of a year).
- Every collecting society shall allow its members to communicate with it by electronic means, even when the exercising of membership rights is involved.
- The rights of the General Meeting are enhanced.
- Each member may be represented by anyone at the General Meeting – unless this could lead to a conflict of interests, e.g. because the member and his/her representative belong to different professional groups. However, Member States can restrict these extensive powers when transposing the Directive into national law. VG Bild-Kunst now already permits the transfer of votes, but only to other members and to specific professional organisations, in order to make sure that association matters are deliberated by the members themselves.
- In future, members of the executive and administrative boards of a collecting society must provide an annual declaration regarding any potential conflicts of interests.
- In future, only administrative expenses incurred within a scope specified by the General Meeting may be deducted from royalties. It will still be possible to deduct expenses for social, cultural or education purposes, but they must be allocated on the basis of fair criteria as a general rule.
- Collecting societies must in future (once implementation of the Directive into German law becomes effective) distribute the royalties received in one year by 30 September of the following year. Up to now, VG Bild-Kunst has distributed the revenue from statutory royalty claims within 12 months of the end of a year.
- The Directive contains differentiated rules for dealing with royalties, for which no rightholders could be identified.
- The Directive also contains rules to improve cooperation among collecting societies in Europe.
- The Directive imposes extensive transparency obligations on collecting societies: They are required to provide their members, their sister societies, the rights users and the general public - in descending order – with access to detailed information.
Bonn, July 2015