Spain’s competition authority CNMC has officially levied a fine against SGAE €6.4 million ($6.9 million in USD) for anti-competitive practices within the company’s licensing deals with both radio and television stations.
According to an official press release, the CNMC said that the SGAE designed raters in a manner that forced most radio and TV operators to accept what they called an “averaged availability rate”, and by not using flat rates, the CNMC says that SGAE’s system prevents operators from getting a rate based on their actual use of music and limits their incentive to consider SGAE’s competitors.
Per the release:
- La SGAE diseñó las tarifas de forma que todos los operadores de radio y la gran mayoría de los de televisión han tenido que acogerse a una “tarifa por disponibilidad promediada” (equiparable a una tarifa plana) para poder emplear su repertorio.
- El uso generalizado de tarifas planas ha tenido un doble efecto anticompetitivo: privar a los operadores de una verdadera opción tarifaria, basada en el uso efectivo de los derechos (efecto explotativo), y limitar sus incentivos para contratar con competidores de SGAE (efecto exclusionario).
- En el caso de los derechos musicales, la SGAE ha potenciado el efecto exclusionario al incluir en los contratos con los usuarios declaraciones sobre la universalidad de su repertorio y garantías de indemnidad frente a reclamaciones por el uso de derechos de terceros.
- La investigación se inició tras las denuncias de las entidades Derechos de Autor de Medios Audiovisuales, Entidad de Gestión (Dama) y Unison Rights, S.L. (Unison).
Additionally, SGAE was sanctioned for presenting its musical offerings to users as “universal” and for “offering guarantees of indemnity against possible claims by third parties for the use of rights not belonging to its repertoire.”
The investigation into their action came following complaints from the likes of Audiovisual Media Copyright, Management Entity (Dama), and Unison.
“The CNMC again concludes that SGAE distorted competition, preventing or hindering the entry of new players into the downstream licensing market to broadcasting entities, thus incurring two very serious infringements for abuse of dominant position,” Unison said in an official press release.
SGAE has also been ordered to cease its infringing behaviors and the CNMC has agreed to apply to SGAE the prohibition of contracting with the Public Administration, the duration and scope of which will be determined by Spain’s State Public Procurement Advisory Board.
