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UK competition authority proposes freeing PRS of its 1997 ‘undertakings’

By | Published on Thursday 24 March 2016

PRS For Music

Collecting society PRS has welcomed a provisional ruling from the Competition And Markets Authority over the undertakings it made to the UK competition authority, then called the Monopolies And Mergers Commission, way back in 1997.

As previously reported, the CMA has been reviewing formal commitments made by various organisations and sectors over the years to counter competition law concerns, to assess whether those undertakings are still necessary in 2016.

Collective licensing by copyright owners always raises some competition law issues, because collecting societies often enjoy a monopoly in certain domains, which is why PRS had to make its undertakings to the MMC back in the 1990s.

But in a statement yesterday, the CMA said that it thought those undertakings were no longer required, mainly because of the EU Collective Rights Management Directive, which is just kicking in, and which – CMA panel members believe – overcomes the concerns the 1997 undertakings were designed to counter.

The CMA’s statement announced that: “The group of independent CMA panel members carrying out the review considers that the forthcoming implementation of the EU Collective Rights Management Directive will effectively address the areas and concerns covered by the undertakings. The group has therefore provisionally decided that the undertakings are no longer required”.

That viewpoint will now be subject to a public consultation before a final decision is made next month. But PRS boss Robert Ashcroft, for one, is pleased with the development.

He told reporters yesterday: “We are pleased that the CMA has recognised the change of circumstance and shares our view that these undertakings are now no longer required and should be released. We are operating in a much more competitive and complex environment than in the late 1990s largely due to the technological changes in the last 20 years particularly in the online world. This means that we have to work even more effectively to deliver our services and royalties to members as well as compete against new and emerging players”.

It remains to be seen if any key stakeholders object to the CMA’s provisional ruling.