Proposal for more transparency on music performing rights licensing

5 June 2019

The ACCC is calling for feedback on a proposal to reauthorise the Australasian Performing Right Association’s (APRA) musical works licensing arrangements for a further five years with additional conditions.

APRA and its members, including composers, songwriters and publishers, hold performing rights for virtually all music played or performed in Australia, and earn royalties from those rights. In most cases, members assign these rights on an exclusive basis to APRA, which collects royalties by imposing licence fees on users of that music.

Many businesses that play music, such as retailers, cafes, bars and broadcasters, need to obtain and pay for a licence from APRA. The fees from these licences are distributed by APRA to its members.

APRA is seeking reauthorisation from the ACCC for its licensing arrangements, to remove any risk that they may breach competition provisions of the Competition and Consumer Act.

The ACCC is proposing to grant APRA reauthorisation for five years, but with strengthened conditions to increase transparency and help protect songwriters and small businesses when dealing with APRA. 

“It’s more efficient for APRA members to collect royalties jointly, rather than every artist having to collect their own royalties and monitor compliance,” ACCC Deputy Chair Mick Keogh said.

“However, APRA already has a near-monopoly, and the exclusivity provisions it has with artists makes its position even stronger. This raises a risk of higher prices for businesses that play music, and other inefficiencies or restrictions for APRA members.”

Respondents to the ACCC’s recent consultation process frequently expressed concerns about the lack of transparency and accountability of APRA, both to its members and also to those businesses from which it collects licence fees.

“We are therefore proposing to grant authorisation for a further five years with conditions that require APRA to be more transparent about licence fees and the way it pays royalties to members, in order to mitigate APRA’s market power and its impact on songwriters and businesses,” Mr Keogh said.

Under the ACCC’s proposal, APRA would also be required to publish information about how it calculates licence fees; to produce a plain English guide to its distribution policies; to publish an annual transparency report with information on rights revenue, operating costs and payments to members; and to continue the “Resolution Pathways” alternative dispute resolution scheme set up in response to a previous ACCC condition. 

The ACCC is seeking submissions on its draft decision, including on the proposed conditions, by 5 July 2019.

Further information, including details about how to make a submission, and a copy of APRA’s application for reauthorisation, are available on the ACCC’s Public Register at Australasian Performing Right Association Limited.

Notes to editors

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.

Because APRA’s existing authorisation expires on 28 June 2019, APRA has also requested interim authorisation to enable APRA to continue its arrangements while the ACCC finalises its consideration of the substantive application. The ACCC is also seeking submissions about the request for interim authorisation.

Background

APRA is a collecting society established in Australia in 1926. At 31 December 2018, it had approximately 100,000 members (composers, songwriters and music publishers who assign their copyrights to APRA), and 147,416 licensees (businesses who pay APRA a licence fee to perform in public or communicate musical works).

APRA’s arrangements were first authorised with conditions by the Australian Competition Tribunal in 1999. They were reauthorised by the ACCC in 2006, and in 2010 and 2014 subject to additional conditions.

Public performance of a musical work includes broadcast of the work via radio or television, as well as causing works to be heard in public, for example in pubs, clubs, cafes, gymnasiums and workplaces.

The ACCC has a limited role in relation to collecting societies. Because APRA acts on behalf of songwriters who may be considered to be each other’s competitors, its arrangements may risk breaching competition laws unless an authorisation is in place.

Many of the concerns raised about APRA’s arrangements are about the licence fees it charges. The ACCC will consider these concerns as part of its wider assessment about whether APRA’s collective licensing arrangements are likely to result in overall public benefit.

Like other businesses, creators of music are entitled to set fees for use of the music they create. This application for reauthorisation, and the ACCC’s assessment of it, focuses on APRA’s arrangements through which those fees are set, rather than the level of any particular fee (which will vary according to the type of use and other factors). 

Release number: 
89/19
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