ACCC Putting Foot Down, Demanding Transparency and Accountability from APRA
There are many copyright users who wish to make use of copyright works under a statutory licence or a voluntary licence scheme. These types of licence are administered by collecting societies who collect licence fees from copyright users.
Collecting societies act as “one stop shops” for the licensing of various types of copyright works and their administration including the remittance of royalties to their members.
The Australasian Performing Right Association (APRA) was granted authority in 1999 by the Australian Competition Tribunal as a collecting body on behalf of its members. APRA currently has more than 100,000 members and licenses more than 147,000 venues.
APRA’s large membership include music publishers, songwriters and artists. The works covered are musical, literary and dramatic works and the rights administered are public performance rights, communication to the public and mechanical rights. For example:
- playing music in live venues
- sound recordings played in public e.g. in shops
- use of musical works in advertisements or movies
- communication to the public online
- music on hold for telephones
- use in sheet music
- use of musical works in sound recordings.
APRA collects licence fees from businesses who want to communicate or perform copyright works of their members. These businesses include retailers, pubs, broadcasting entities and so on. Correspondingly, businesses must pay licence fees or “royalties” to APRA to use the copyright works.
ACCC Deputy Chair Mick Keogh said:
“Collective management of copyright is generally more efficient than songwriters having to independently negotiate and collect royalties directly from each business that plays their songs.
However, APRA’s exclusivity provisions can mean higher fees for some businesses that want to play music.”
The key issues raised in submissions to the ACCC’s consultations were concerns about the licence fees that APRA charges. There were also concerns about APRA’s lack of transparency and accountability to both the businesses from which it collects royalties and also to songwriter members.
The ACCC will grant re-authorization to APRA on the condition that the collecting society improves the transparency of its licensing fees and royalties. This means that APRA must publish its methodologies for calculating rates, provide an explanation when it increases licence rates by more than CPI and release more detailed information about royalty distribution to members and provide an annual transparency report.
These need to be in clear terms that APRA’s members (composers, songwriters and publishers) and businesses (cafes, bars, retailers and broadcasters) can understand. In sum, “plain English” must be used to explain how APRA calculates its licence fees and a guide published as to its distribution policies.
Among the most notable conditions that APRA must comply with, include:
1. Publication of its dispute resolution mechanics
2. Publication of how fees are calculated
3. Published explanation for fees that increase over inflation rates
4. Publication of the accounting method of payment collections as well as the distribution of revenue (including details of proportions of revenue distribution)
5. Reports to show how APRA monitors the use of music by licensees as this is a basis for calculating licence fees.
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Disclaimer. The material in this post represents general information only and should not be taken to be legal advice.