BUMA and SABAM Renounce Economic Residency Requirement

The European Commission has opened a public consultation on commitments from BUMA and SABAM (the Dutch and Belgian collecting societies that manage music copyrights for authors) not to be party to any cross-licening agreement with other collecting societies that contains a “economic residency clause” for the licensors of online music.

In May 2004, the European Commission warned the sixteen organisations that collect royalties on behalf of music authors that their so-called "Santiago Agreement" is potentially in breach of European Union competition rules. The purpose of the agreement was to allow each of the participating societies to grant to online commercial users "one-stop shop" copyright licenses which include the music repertoires of all societies and which are valid in all their territories. The structure put in place by the parties to the Agreement results in commercial users being limited in their choice to the monopolistic collecting society established in their own Member State.

In its latest statement, the Commission announed that it is "continuing the formal proceedings as regards the other collecting societies that received the statement of objections with a view to adopt a formal negative decision. However, it will examine carefully any proposal on commitments that other collecting societies may submit to lift the restrictions, so that the procedure in respect of them could likewise be terminated with a commitments decision."