APRA to retain monopoly on music licencing

ACCC says APRA monopoly is of ‘public benefit.’

The Australian Competition and Consumer Commission proposes to allow the Australasian Performing Right Association (APRA) to continue its arrangements for the acquisition and licensing of performing rights in music subject to a range of conditions for the next three years.

“The ACCC accepts that APRA’s arrangements provide users with transaction cost savings by providing instantaneous access to APRA’s entire repertoire. The exclusivity of APRA’s arrangements also results in enforcement and monitoring efficiencies,” said ACCC Commissioner Jill Walker. “On the other hand, as a virtual monopoly, APRA has significant market power in relation to its dealings with users and its arrangements can also create inefficiencies for its members.”

APRA holds the rights for the performance of almost all music in Australia.  A large number of businesses, including retail businesses, hospitality venues and broadcasters, must purchase a licence from APRA to broadcast music.  APRA distributes the royalties to its member composers, songwriters and music publishers who also need APRA to collect their royalties.

APRA’s arrangements were first authorised by the Australian Competition Tribunal in 1999, subject to conditions. The ACCC reauthorised the arrangements in 2006 and conditionally reauthorised them in 2010.

The ACCC received a large number of submissions prior to issuing this draft decision.  The proposed conditions have been developed in consultation with APRA and seek to address concerns raised by APRA users, particularly small business users. These concerns included difficulty understanding APRA’s licensing system and a limited ability to dispute APRA’s decisions. 

The ACCC is proposing to require APRA to create a plain English guide to its licensing schemes and to make improvements to its dispute resolution process. These conditions should particularly benefit small businesses in their dealings with APRA.

The proposed conditions also require APRA to create a guide and education campaign for its ‘licence back’ and ‘opt out’ facilities, which allow APRA members to enter into direct licensing arrangements with users for their works. The licence back facility was introduced as a condition of authorisation by the Australian Competition Tribunal in 1999 to inject competition where possible. Licence back has since been gradually modified during subsequent authorisation processes.

Subject to the proposed conditions, the ACCC considers that the public benefit test has been met. The ACCC is now seeking submissions on this draft decision, including on the conditions, before making its final decision.

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.

The proposal to continue the copyright collecting agency’s monopoly comes at a significant time in the radio industry’s ongoing dispute about copyright issues.