Apr 8, 2024 3 min read

Music groups demand European Commission provide a “clear proposal” for addressing impact of RAAP ruling on performance royalties in Europe

In 2020, the EU courts made a ruling that changed the way some European countries deal with international performance royalties. The music community has now renewed its call for the European Commission to produce a plan to address the problems that change caused

Music groups demand European Commission provide a “clear proposal” for addressing impact of RAAP ruling on performance royalties in Europe

Music organisations across Europe have again called on the European Commission to “come forward with a clear proposal to address the consequences of the EU RAAP case”. 

This relates to the rules that regulate how performance royalties paid to artists and labels flow around the world, and especially to countries where there are no equivalent royalties to flow back. A recent change to the rules - if not reversed - could result in €1 billion of royalties generated in Europe being handed over to the US, with no revenues coming back in return. 

The UK government has also been reviewing those rules in recent months, separate to the ongoing controversy in the European Union, which was caused by a 2020 judgement in a legal dispute involving Irish performer collecting society RAAP.

In terms of that controversy, a statement issued this morning notes that the EC “has said that it recognises the problem”, while “the music sector, EU governments and members of the European Parliament have on many occasions flagged the need to address this urgently”. 

And yet nothing has happened. With EU elections looming, “a clear sign is needed”, insists today’s statement, which is backed by various European collecting societies and musicians’ unions, as well as pan-European indie label trade group IMPALA

When recordings are broadcast or played in public, royalties are collected in each country by the relevant collecting societies. They then pass the money onto artists and labels. If those artists and labels are based in other countries, the money will usually flow to them via their local collecting societies - so one society pays another society which pays the artist or label. 

However, in a small number of countries, most notably the US, there are no royalties due when recordings are broadcast or performed because of the way local copyright law works. As a result, there is a question over whether or not European societies should send money over to the US when American releases are played in their home countries, even though there are no equivalent royalties flowing back.

Different countries have different rules on this. Some apply the reciprocity approach, so that royalties are only paid out to countries where there are equivalent payments flowing back. This means that American artists and labels don’t get paid, even if their recordings are played.

The UK in theory applies a reciprocity approach, although the specific rules mean that US labels usually do get paid, but American performers do not. 

That disparity between labels and artists was the subject of a recent consultation by the UK Intellectual Property Office. On the back of that consultation, the IPO could look to change the rules so that royalties flow to performers as well as labels. 

In the European Union, rules previously differed from country to country until the judgement in the Irish legal case involving RAAP. In that case, the EU courts ruled that the reciprocity approach is not allowed, even though EU law is actually silent on this point. Ever since, industry groups in affected countries have called on the European Commission to clarify the law in this domain, so that EU countries can employ the reciprocity approach if they so wish. 

Stressing the urgency for getting this sorted, IMPALA Executive Chair Helen Smith says, “A proposal is needed now to restore legal certainty and prevent European artists and producers losing more than €1 billion over the next decade to the USA, which has chosen not to protect these rights”.

“There is a growing body of legal opinions coming from different parts of Europe confirming that the legislation can be clarified in a proportionate way that would promote harmonisation while taking into account the diversity of national approaches, as with other points of copyright”, she continues. “European artists and producers are asking for this, European governments are asking for this, the European Parliament is asking for this, now it is time for the European Commission to come forward with a balanced solution”.

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