“What should this mean? … Or is it some abuse?”*: ECJ on Kanal 5

Posted on December 11, 2008 | Filed Under digital content, copyright 

Sometimes, ECJ decisions can remind you of the old lawyer jokes (see for instance, here), where someone is identified as a lawyer because he gives an answer that is “100% accurate, yet completely useless.” Today’s answer given by the European Court of Justice to a request for a preliminary ruling by the Swedish Market Court in the Case C-52/07 Kanal 5 and TV 4 may well fall into that category. 

The commercial broadcasters Kanal 5 and TV 4 had complained to the Swedish competition authority about a suspected abuse of a dominant market position by STIM, “an association which enjoys a de facto monopoly in Sweden over the market for making available copyright-protected music for television broadcast”. Kanal 5 and TV 4 pay remuneration to STIM corresponding to a percentage of their revenue deriving from television broadcasts directed at the general public and/or subscription sales; the percentages vary according to the amount of music broadcast. The public service channel SVT, however, pays STIM a lump sum, the amount of which is agreed in advance. When the competition authority dismissed the somplaint, Kanal 5 and TV 4 brought action before the Market Court which then requested a preliminary ruling regarding the interpretation of Article 82 EC.

The court held that the remuneration model, which is not based only on the revenue of the broadcasting companies, but takes account of the number of the copyrighted works actually broadcast, does not in itself constitute an abuse within the meaning of Article 82 EC and must, in principle, be regarded as a normal exploitation of copyright. However, it is conceivable that, in certain circumstances, the application of such a remuneration model may amount to an abuse, in particular when another method exists which enables the use of those works and the audience to be identified and quantified more precisely and that method is capable of achieving the same legitimate aim.

The interesting question, whether the application of a different remuneration model to a public service broadcaster could be an abuse, is also answered in a very general way:

First, the referring court will have to take account of the fact that, unlike Kanal 5 and TV 4, SVT does not have either advertising revenue or revenue relating to subscription contracts and of the fact that the royalties paid by SVT are collected without taking account of the quantity of musical works protected by copyright actually broadcast. Furthermore, the national court must also ascertain whether Kanal 5 and TV 4, or either of those two companies, is a competitor of SVT on the same market. And finally, the referring court must consider whether such a practice may be objectively justified. Such justification may arise, in particular, from the task and method of financing of public service undertakings.

So it’s back to the Market Court for an interesting assessment of whether commercial and public-service broadcasters (without advertising funding) are acting on the same market.

*) Shakespeare, Hamlet, Prince of Denmark, Act IV Scene 7

About this Post
author: hans peter | Permalink | | Print This Article |


Comments

One Response to ““What should this mean? … Or is it some abuse?”*: ECJ on Kanal 5”

  1. Updated: pending telecoms/broadcasting-cases before ECJ and CFI : contentandcarrier on December 11th, 2008 11:00 pm

    […] “What should this mean? … Or is it some abuse?”*: ECJ on Kanal 5 […]

Leave a Reply