Is SIAE’s Monopoly Over?

On July 15, the Court of Milan rendered a landmark decision, which probably establishes the end of SIAE’s legal monopoly in copyright collection in the Italian Territory.

The Court rejected the request of an injunctive relief requested by plaintiff Laura Piccinelli, a song writer member of SIAE, the Italian Copyright Collecting Society against Soundreef Ltd.  a British collecting Society  which collects copyright namely in the field of in store music broadcasting.

Soundreef licenses businesses to play on line its catalogue of over 170,000 songs licensed from artists, record labels and publishers throughout the world providing an alternative to traditional music copyright collection societies such as SACEM, BUMA/STEMRA, STIM, SIAE, SGAE and TONO.

 

Soundreef proposes to be an alternative to SIAE and withholds 50% of the royalties received by its clients and reserving the artist the other 50% and provides lower rates by 50% than SIAE.

Plaintiff argued the illegality of Soundreef’s collecting activities with respect to Italian copyright code and legislation (art. 180) which regulates copyright collecting services by granting  SIAE a legal monopoly over such activity.

Furthermore, Plaintiff also claimed potential damages for unfair competition acts in relation to the progressive acquisition by the resistant of many retail customers who have ceased to use the SIAE repertoire, which had an effect on Plaintiff’s loss of Profit.

Lastly Plaintiff requested that Soundreef was refrained from continuing any collecting activity in the Italian territory.

On the other hand, Defendant argued that it was not carrying out any collecting activity in the Italian territory as all activity was rendered in the UK and all contacts were subject to the UK Law and that the Legal Monopoly established under art 180 of the Copyright Act was in any case detrimental to Soundreef’s business activities.

In general, Soundreef argued that: (i) Ms Piccinelli does not carry out a commercial activity and therefore unfair competition rules do not apply to such case; (ii) SIAE’s monopoly would not prevent Soundreef Ltd and other European collecting societies to collect rights in Italy belonging to their members, referring the decision of the EC Commission's CISAC 16.7.2008 which involved SIAE as well; (iii) The principles laid down by the recent Directive 2014/26/UE are a major step towards the creation of the single digital market and aims in creating a single copyright and related rights in musical works accessible online, by putting in touch all of those platforms that offer a music services on the web.

In its decision, the Court of Milan rejected the request of an injunctive relief for the following reasons: (i) An artist is not an entrepreneur and therefore Plaintiff cannot claim unfair competition acts according to the Italian civil code; (ii) The CISAC decision in which SIAE was involved, acknowledged the principles of free competition in rendering services in the European Union States by companies established in the territory; (iii) The recent Directive  2014/26/UE provides for the creation of a multi territorial collecting license which shall in the future allow other collecting societies to start collecting copyright and neighboring rights across the EU and provides that artists should be able to choose the collecting society of their choice. In this sense an undeniable liberalization trend through out Europe has begun also with respect to online copyright collection.

This decision marks a new direction in copyright collection in Italy and SIAE’s exclusive right as a legal monopolist.

Will new societies soon begin collecting copyright in Italy?