The Italian Competition Authority closes an antitrust investigation against a collecting society with a commitment decision

In Nuovo Imaie the Italian Competition Authority (ICA) considered whether the business practices of Nuovo Imaie (NI), an Italian collecting society (CS), breached Article 102 TFEU. Eventually, the ICA closed the Article 102 TFEU investigation against NI with a commitment decision after accepting the set of commitments offered by the CS under investigation[1].

The facts of the case
NI is the successor to the former legal monopolist, IMAIE, whose activities were transferred to NI with the Law no. 100/2010. In such a capacity, NI provides management services for performer’s neighbouring rights and also distribute fair compensation due to performers. This sector of collective management of artists’ rights has been opened to competition since January 2012. Following the receipt of several complaints filed by two NI’s competitor reporting allegedly abusive practices of NI, in April 2016 the ICA opened an antitrust investigation against NI.

The decision of the ICA
The relevant product markets affected by NI’s practices were identified in the markets for the provision of management and intermediation services for performer’s neighbouring rights concerning audiovisual and musical works; and in the markets for the provision of the same services on behalf of other CS. NI was held to have a dominant position in those markets due to its very market shares.
The ICA believed that NI implemented a single complex foreclosing strategy in several ways to the detriment of new entrants in the recently liberalised market. First, NI discriminated against performers registered with other CS by, among other things, conditioning the payments of the sums of money due to those performers upon them registering with NI itself.
Second, NI denied competitors access, without any objective justification, to the IMAIE’s historical data base of artists and protected works. The data base was an essential facility for competitors whose activities would have been frustrated by lack of access to this indispensable input.
Third, NI concluded several pluriannual agreements with foreign CS for mutual assistance for the collection of royalties and concluded with the main Italian users of protected works, TV broadcasters, agreements to quantify the fair compensation due by them to performers. Such network of agreements was feared to lead to foreclosing NI’s rivals because they were unable to replicate similar agreements.
As a whole, in the ICA’s view, the business practices of NI lessened competition and also harmed performers by impeding them from freely choosing the CS with which to register.
To alleviate the ICA’s competition concerns, NI offered a set of 12 behavioural commitments pursuant to Article 14-ter of the Law no. 287/90, which were then approved and made binding by the ICA with a commitment decision.
The first, second and third commitments focus on the discriminatory practices against the performers registered with rival CS. NI has to publicize the activities it has to perform pursuant to the 2014 agreement with IMAIE and not renew that agreement at its expiry. NI is also committed to indicate to performers the costs incurred in providing its services so that performers can compare the NI’s costs with those of competitors. IMAIE. The fourth and fifth commitments contained two different regimes for access to NI data base. NI offered to give competitors a free access restrained to the database as updated to the date of 11 March 2014as well as a FRAND full access licence to the database against the payment of a fee.
By the sixth, seventh and eighth commitments NI undertook to conclude only one-year future cooperation agreements with foreign CS. Concerning cooperation agreements being currently in force, NI would award its counterpart the right to withdraw from the agreement with a 30-day notice. The ninth, tenth, eleventh and twelfth commitments address the agreements between NI and the major Italian users of protected works. To overcome the deadlock in the negations between users and CS as to how allocate the monies collected by users, NI proposed to refer the matter to an arbitral tribunal. As for the future agreements with users, NI proposed the creation of a working group, open to all concerned parties, where to discuss the transparency of assignments given by performers to CS, common reporting standards and the criteria for the allocation of the collected royalties.
The ICA took the view that the set of commitments offered by NI were suitable to address the competition concerns it identified in the preliminary investigations for the following reasons: first, they would erase or reduce the NI’s competitive advantage stemming from the 2014 agreement with IMAIE; they would restore a level playing field amongst NI and competitors; third, they would make the relevant markets more easily contestable by new entrants; fourth, they would resolve all the pending issues dividing NI and competitors concerning the allocation of monies collected by users.     

Conclusion
Over the past months, the ICA considered the antitrust liability of CS for allegedly abusive conducts not only in Nuovo Imaie, but also in SIAE[2]. The main take-home lessons that may be drawn from Nuovo Imaie, with the caveat that this a commitment decision without an infringement finding, is that the length of mutual cooperation agreements with foreign CS should not exceed one year. Moreover, when competitors ask for access to an intangible essential input, such as a data base, CS should offer them FRIAND-compliant access licences. Alike importantly, CS should refrain from imposing on artists the requirement of exclusive membership.


[1] Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato), decision of 22 March 2017, Case A489 Nuovo Imaie- Condotte anticoncorrenziali (Nuovo Imaie), Bollettino 13/2017, http://www.agcm.it/component/joomdoc/bollettini/13-17.pdf/download.html.

[2] Italian Competition Authority (Autorità Garante della Concorrenza e del Mercato), decision of 5 April 2017, Case A508 SIAE/Servizi intermediazione diritti d’autore), Bollettino 14/2017, http://www.agcm.it/component/joomdoc/allegati-news/A508.pdf/download.html. 

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