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Policy Recommendations on Regulating Exclusivity in the Field of OMD

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Book cover Online Music Distribution - How Much Exclusivity Is Needed?

Part of the book series: Munich Studies on Innovation and Competition ((MSIC,volume 12))

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Abstract

This chapter will discuss the policy recommendations that can be made on the basis of our preceding analysis. First, the generally preferable regime of exclusivity will be discussed, which is a market-based statutory license that is improved in a number of aspects in order to better accommodate the needs of musicians and other rightholders (A.). Then, specific recommendations on how existing laws could be feasibly adapted to functionally correspond to the desirable regime will be made (B.). Finally, the admissibility of the proposed legislative improvements will be discussed (C.).

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Notes

  1. 1.

    See Fisher, Promises to Keep, pp. 199–258 (proposing an “alternative compensation system” for rightholders in form of a “tax” on digital recording devices, digital storage media and Internet access services); Lessig, Free Culture, pp. 296–304 (adhering to the proposal of Fisher, but seeing it as an temporary solution aimed at facilitating a technological transition, predicting that file sharing will increasingly disappear as Internet access technologies proliferate and allow for services that give consumers access to content on the fly, such as on-demand streaming and internet radio—this prediction indeed seems to have come true ten years later); Netanel, 17 Harv. J.L. & Tech. 1, 35–59 (2003) (proposing a “noncommercial use levy” for P2P file sharing “upon commercial providers of all consumer products and services whose value is substantially enhanced (as determined by the Copyright Office) by P2P file sharing”, including ISPs, computer hardware manufacturers and manufacturers of other electronic devices and storage media); Litman, 27 Hastings Comm. & Ent. L.J. 1, 39–50 (2004) (elaborating on the mentioned proposals to suggest a blanket license for P2P file sharing that would be both statutory and voluntary, prescribing the terms and conditions of the license but allowing rightholders to opt out of the system); Lunney, 87 Va. L. Rev. 813, 911–918 (2001) (suggesting a file sharing levy on copying technology and storage media); Ku, 69 U. Chi. L. Rev. 263, 312–315 (2002) (proposing a free-of-charge exemption of file sharing from copyright, but suggesting a levy on Internet subscriptions and copying equipment, if alternative revenue sources prove insufficient); for a further overview see Yu, 76 U. Colo. L. Rev. 653, 655–656 (2005); Quintais, On Peers and Copyright, pp. 55–56; for the German discussion of a similar statutory licensing system for P2P file sharing under the heading of Kulturflatrate see Grassmuck, ZUM 2005, 104 (endorsing such system); Roßnagel/Jandt/Schnabel, MMR 2010, 8 (confirming its constitutionality); Spindler, Rechtsprobleme und wirtschaftliche Vertretbarkeit einer Kulturflatrate; Peifer, ZUM 2014, 86, 88–89.

  2. 2.

    See Richardson, 31(2) Ent. & Sports Law. 9 (2014) (advocating the creation of a compulsory licensing scheme for on-demand digital media platforms); DiCola, 93 B.U. L. Rev. 1837, 1895 (2013) (suggesting that the 114 CA statutory license should be extended to on-demand streaming); Srivastava, 22 Touro L. Rev. 375, 445–459 (2006) (arguing for compulsory licensing in the context of online MP3 sales); see also Patry, How to Fix Copyright pp. 177–188 (suggesting “abandoning exclusivity and getting paid instead” in a more general manner); Hilty, in: Ohly (ed.), FS Schricker, 325 (generally endorsing limitation-based remuneration rights in the light of their ability to account for the tripolar conflict of interests in copyright industries).

  3. 3.

    See e.g. Towse, 3(3) RLE 745, 756 (2007).

  4. 4.

    See above Chap. 10.

  5. 5.

    See also above Chap. 10 footnote 70 (for Wu making a similar argument in the context of net neutrality).

  6. 6.

    See Klebanow, 39 Colum. J.L. & Arts 119, 121–123 (2015).

  7. 7.

    See above Sect. 10 A II.

  8. 8.

    See e.g. DiCola, 93 B.U. L. Rev. 1837, 1898 (2013) (“[i]t is hopeless to seek examples of market outcomes in an industry that features so many compulsory licenses and that has experienced so much government intervention”); Lunney, in: Gervais (ed.), Collective Management of Copyright and Related Rights, 339, 361 (pointing out that a competitive market for blanket licenses of CMOs does not exist).

  9. 9.

    See above Sect. 14 A.

  10. 10.

    See above Sect. 9 B II 2 with further references to Part I of this study.

  11. 11.

    See above Sects. 5 C II 1 c, 5 D II 1 a and 7 B.

  12. 12.

    See above Sect. 8 B I 2 a bb (1).

  13. 13.

    Ibid.

  14. 14.

    See above Sect. 10 A II 4; see also above Sect. 9 B II 2 b dd.

  15. 15.

    Ericsson, 79 Geo. Wash. L. Rev. 1783, 1812 (2011).

  16. 16.

    See Laguana, How To Make Streaming Royalties Fair(er), Medium of November 17, 2014, available at: https://medium.com/cuepoint/how-to-make-streaming-royalties-fair-er-8b38cd862f66#.5th7reve8; Laguana, Streaming Music is Ripping You Off, Medium of August 18, 2015, available at: https://medium.com/cuepoint/streaming-music-is-ripping-you-off-61dc501e7f94#.7bynu1h9e; see also Maasø, User-centric settlement for music streaming, p. 4; Pedersen, Music Streaming in Denmark, p. 4.

  17. 17.

    See Laguana, How To Make Streaming Royalties Fair(er), Medium of November 17, 2014, available at: https://medium.com/cuepoint/how-to-make-streaming-royalties-fair-er-8b38cd862f66#.5th7reve8; Laguana, Streaming Music is Ripping You Off, Medium of August 18, 2015, available at: https://medium.com/cuepoint/streaming-music-is-ripping-you-off-61dc501e7f94#.7bynu1h9e.

  18. 18.

    See Sharky Laguana and “Fair” Spotify Royalties, The Tritonester of November 20, 2014, available at: https://tritonester.wordpress.com/2014/11/20/sharky-laguna-and-fair-spotify-royalties/; A “FAQ” About Sharky Laguana and Silent September, The Tritonester of August 31, 2015, available at: https://tritonester.wordpress.com/2015/08/31/a-faq-about-sharky-laguana-and-silent-september/.

  19. 19.

    See Maasø, User-centric settlement for music streaming, pp. 7–8; Pedersen, Music Streaming in Denmark, p. 8.

  20. 20.

    See above Sects. 5 D II 1 d cc and 5 D II 1 d ff.

  21. 21.

    See Lemley, 100 Cal. L. Rev. 463 (2012).

  22. 22.

    This is what apparently happened in the case of the Sec. 115 CA compulsory license, see above Sect. 9 II 3 b.

  23. 23.

    See e.g. Patry, How to Fix Copyright, p. 182; Einhorn, in: Towse (ed.), Copyright in the Cultural Industries, 165, 175.

  24. 24.

    See also above Sects. 10 B II, 11 B I 2 and 11 B III.

  25. 25.

    See above Sect. 14 A III 1.

  26. 26.

    See above Sect. 9 B II.

  27. 27.

    See above Sects. 6 C I 3 a and 6 E.

  28. 28.

    See above Sect. 6 B I 3.

  29. 29.

    See above Sect. 14 A III 2.

  30. 30.

    Except when GEMA cession exists, see above Sect. 4 B I 2.

  31. 31.

    See above Sects. 6 C I 2 b, 4 B I 2 and 9 B II 2 a.

  32. 32.

    See above Sects. 6 D II 1 b aa and 6 B II 1.

  33. 33.

    See above Sect. 6 D II 1 b cc.

  34. 34.

    Ibid.

  35. 35.

    Similarly Patry, How to Fix Copyright, p. 188.

  36. 36.

    See above Sect. 6 D I 2 b.

  37. 37.

    See above Sect. 6 B I 2.

  38. 38.

    See above Sect. 6 B I 3; for the application to DMEs by virtue of Art. 2(3) CRM Directive see above Sect. 6 C II 1 a b bb.

  39. 39.

    See IFPI, Recording Industry in Numbers 2013, pp. 40–52, 54–58, 61, providing very divergent numbers in connection with recording industry revenue per capita across the EU, i.a. $0.4 in Bulgaria, $2.0 in Poland, $3.5 in Italy and Spain, $13.8 in France, $16.0 in Germany, $18.6 in Sweden and $21.0 in the UK.

  40. 40.

    For example, Spotify Premium is currently priced at PLN 19.99 (around €4.60) in Poland, €4.99 in Bulgaria, €6.99 in Baltic countries and €9.99 across the most of Western Europe; see https://www.spotify.com/us/select-your-country/; see also “Spotify Premium Index”, available at: http://mts.io/projects/spotify-pricing/.

  41. 41.

    See above Sect. 9 B II 2 a.

  42. 42.

    See above Sects. 5 D I 1 e aa and 9 B II 3 b.

  43. 43.

    In particular, ASCAP and BMI have already petitioned the DOJ once to modify their decrees to allow partial withdrawals by major publishers (see Christman, Dept. of Justice Considering Major Overhauls on Consent Decrees, Sources Say, Billboard of April 7, 2015, available at: http://www.billboard.com/articles/business/6524359/dept-of-justice-consent-decrees-overhaul-publishing-ascap-bmi), which the DOJ declined at that time (see DOJ, Statement of the Department of Justice on the Closing of the Antitrust Division’s Review of the ASCAP and BMI Consent Decrees, Washington, D.C., August 4, 2016, available at: https://www.justice.gov/atr/file/882101/download).

  44. 44.

    See above Sect. 9 B II 2 a.

  45. 45.

    See above Sect. 5 D I 1 d.

  46. 46.

    See U.S. Copyright Office, Copyright and the Music Marketplace: A Report of the Register of Copyrights, February 2015, available at: http://copyright.gov/policy/musiclicensingstudy/copyright-and-the-music-marketplace.pdf, pp. 159–160, 161, 190–192.

  47. 47.

    Id., p. 161. These reasonable suggestions were accompanied by a further proposal that major publishers should be able to restore full exclusivity by pulling their (both mechanical and performing) rights for interactive uses from the newly formed MROs, see id., pp. 159, 164. This recommendation cannot be supported here for obvious reasons discussed above.

  48. 48.

    See below Sect. 14 B II 3.

  49. 49.

    See above Sect. 14 A III 2.

  50. 50.

    See above Sects. 3 B I 2, 3 B II and 3 B III.

  51. 51.

    See above Sects. 5 B I 1 a, 5 B I 1 d and 5 B II 2 b. There is however still some uncertainty with regard to the interpretation of the requirement stipulated in Art. 10(2) sentence 2 Directive 2006/115/EC, according to which “compulsory licenses” on the basis of Art. 10(2) sentence 1 Directive 2006/115/EC need to be compatible with the RC (see above Sect. 5 B II 2 b).

  52. 52.

    See above Sects. 5 B I 1 b and 5 B II 1.

  53. 53.

    See above Sects. 3 B I 2, 3 B II and 3 B III.

  54. 54.

    See above Sects. 5 B I 1 c and 5 B II 1.

  55. 55.

    See above Sects. 5 B I 1 b and 5 B II 1.

  56. 56.

    See above Sect. 5 E II and Chap. 5 footnotes 444 and 445.

  57. 57.

    For a detailed analysis, which is mutatis mutandis applicable to the three-step test in the EU law, see below Sect. 14 C I.

  58. 58.

    See above Sect. 5 B II 2 a.

  59. 59.

    See above Sect. 6 A II 2.

  60. 60.

    See above Sects. 5 D II 1 d cc, 5 D II 1 d ff; see also above Sect. 14 A II for suggestion of recommended rates for non-interactive streaming.

  61. 61.

    See above Sect. 9 B II 3.

  62. 62.

    See above Sect. 14 B I 2 c.

  63. 63.

    See above Sects. 11 B II–III; on the need for a unified rate-setting standard in the OMD field see also DiCola, 93 B.U. L. Rev. 1837, 1897 (2013); U.S. Copyright Office, Copyright and the Music Marketplace (supra note 46), pp. 179–180 (endorsing current willing buyer/willing seller standard).

  64. 64.

    See above Sect. 5 D II 1 d ff.

  65. 65.

    See above Sect. 5 D II 1 b.

  66. 66.

    See above Sect. 14 A III 2.

  67. 67.

    See above Sect. 14 B I 1 c cc.

  68. 68.

    See above Sect. 6 A I; see also Sect. 14 A III 1.

  69. 69.

    See above Sect. 5 A I 1 a.

  70. 70.

    See above Sect. 5 A I 3 a aa.

  71. 71.

    See above Sect. 5 A II 3.

  72. 72.

    Art. 9(2) BC, Art. 13 TRIPS and Art. 10 WCT (musical works) and Art. 16(2) WPPT (sound recordings).

  73. 73.

    For a detailed analysis and critical evaluation of views pertaining to the interpretation of the three-step test see above Sect. 5 A I 3 b.

  74. 74.

    See above Part II.

  75. 75.

    See above Sects. 3 A II 1 and 3 A II 3 concerning Art. 12 RC and Art. 15 WPPT.

  76. 76.

    See above Sect. 3 E II 4.

  77. 77.

    See above Sects. 14 B I 1 and 14 B II 2.

  78. 78.

    See European Court of Human Rights, Case No. 36769/08, Judgment of January 10, 2013—Ashby Donald and others v. France, para. 40.

  79. 79.

    See Art. 17(2) EU Charter expressly saying that “[i]ntellectual property shall be protected”.

  80. 80.

    See BVerfG GRUR 1972, 481—Kirchen- und Schulgebrauch; BVerfG GRUR 1989, 193—Vollzugsanstalten.

  81. 81.

    See Art. 1 Protocol 1 ECHR, saying that the right to property does not “in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest”; Art. 17(1) sentence 2 EU Charter reading as follows: “The use of property may be regulated by law in so far as is necessary for the general interest”; Art. 14 GG reading as follows: “Property entails obligations. Its use shall also serve the public good”. See also Krauspenhaar, Liability Rules in Patent Law, p. 70, pointing out that the similarities between Art 1 of Protocol 1 ECHR, Art. 17 EU Charter and Art. 14 GG largely justify their uniform interpretation in the context of patents.

  82. 82.

    Stipulated in Art. 27(1) of the Universal Declaration of Human Rights (proclaimed on December 10, 1949) and in Art. 15(1)(a) of the International Covenant on Economic, Social and Cultural Rights of 1966 (adopted on December 16, 1966); see also Hansen, Warum Urheberrecht?, p. 308.

  83. 83.

    For the references to the respective rules of law see above Sect. 10 A II 1 b.

  84. 84.

    See Hilty, in: Ohly (ed.), FS Schricker, 325, 339 with further references; see also BVerfG GRUR 1972, 481, 484—Kirchen- und Schulgebrauch; Melichar, in: Schricker/Loewenheim, Vor §§ 44a ff. note 8.

  85. 85.

    BVerfG GRUR 1972, 481, 483—Kirchen- und Schulgebrauch.

  86. 86.

    BVerfG GRUR 1990, 183, 185—Vermietungsvorbehalt; Grzeszick, ZUM 2007, 344, 350; Hansen, Warum Urheberrecht?, p. 309.

  87. 87.

    See above Part II.

  88. 88.

    See Bach, 14 Hofstra L. Rev. 379, 400 (1986); see also Lee, 5 W. New Eng. L. Rev. 203, 207–209, 222 (1982).

  89. 89.

    Nimmer on Copyright, § 1.07; Cassler, 37 J. Copyright Soc’y U.S.A. 231, 237 (1990); see also Patry on Copyright, § 3:12.

  90. 90.

    See Ginsburg, 54 Me. L. Rev. 195, 214 (2002).

  91. 91.

    See above Sect. 8 A.

  92. 92.

    See above Chap. 13.

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    Nikita Malevanny

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Malevanny, N. (2019). Policy Recommendations on Regulating Exclusivity in the Field of OMD. In: Online Music Distribution - How Much Exclusivity Is Needed?. Munich Studies on Innovation and Competition, vol 12. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-59699-9_14

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