Spanish collecting society SGAE fined $7M for anti-competitive practices

Spain’s competition authority CNMC has fined collecting society SGAE €6.4 million (USD $6.9 million at current exchange rates) for anti-competitive practices in its licensing deals with radio and TV stations.

The problem lies in SGAE’s use of low-rate license fees for the use of its music and audio-visual repertoire. I CNMC in a press release last week (June 26) that SGAE designed its rates in a way that forced most radio and television operators to accept the “average rate of availability.”

The use of lower rates, according to the CNMC, prevents operators from obtaining a rating based on their actual music consumption and limits their incentive to consider SGAE competitors. If a broadcaster signs an agreement with a competing licensing body, and uses that competing team’s music, they will still have to pay the same amount to SGAE.

The CNMC also approved SGAE for presenting its music catalog to users as “universal” and “providing indemnification guarantees against potential claims of third parties for the use of rights that do not belong to their collection.”

The investigation into SGAE began following complaints from companies Audiovisual Media Copyright, Management Organization (Dama), again Onenesssaid the CNMC.

“The CNMC also concluded that the SGAE distorted competition, prevented or restricted the entry of new players into the market by granting licenses to broadcasting companies, thereby committing two serious violations of the law by abuse of a dominant position.”

Oneness

Unison said it lodged a complaint against SGAE in 2016 for what it described as an “abuse of its dominant position” in collecting public use of “flat” fees or access to the low-end TV and radio broadcasting market, as well as licensing its series. “at a rate that is thought to exist throughout the world.”

“The CNMC also concluded that SGAE distorted competition, hindered or hindered the entry of new players into the licensing market for broadcasting companies, thereby committing two serious violations by abuse of a dominant position,” Unison said in a separate statement.

In addition to the fine, SGAE was also ordered to stop its offending behavior. The CNMC also agreed to apply to the SGAE for a ban on the contract with the Public Administration, the duration and place of which will be determined by the Spanish Public Access Advisory Board.

This is the second time SGAE has been fined by the CNMC for preventing competition. In 2019, Unison was instrumental in lobbying the CNMC to fine SGAE €2.95 million by abusing its dominant position in the Spanish music copyright market. In the same year, SGAE was released CISACthe International Confederation of Societies of Authors and Composers, following complaints from publishers of ‘discriminatory treatment of rights holders and unfair practices relating to the distribution of royalties’.

Meanwhile, the latest development comes as Spanish The Supreme The court he is currently reviewing another case against SGAE. Unison claims to have sought damages as a result of this complaint, and as of February 16, 2024, SGAE was ordered to compensate Unison for the damages caused.

“With this new decision, the CNMC confirms that SGAE has been abusing its dominant position since 2016, placing and maintaining significant barriers to the entry of new users. Specifically, the CNMC confirmed SGAE’s anti-competitive actions in the upstream market during the period 2016-2018 and in the downstream market from at least 2019 until now,” said Unison.

Unison, an independent music rights management company based in Barcelona, ​​operates as an independent entity managing under the Spanish Intellectual Property Law. As the first independent manager of music rights in Spain, Unison said it aims to bring transparency and fairness to the management of authors’ rights.

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