8. A preventive competition policy against distribution monopolies and their abuse == |+|
== . ==
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|−|Digital technology has enabled powerful non-market distribution channels and it has given an easier acces to publishing and distribution to individuals and small-size organizations. Meanwhile, one has witnessed a considerable reinforcement of distribution monopolies or oligopolies that appeared during the cultural industry era. If the fusion between Universal and EMI is authorized, the resulting group will control 60% of licensing for distribution in volume for musical recordings in the large European countries. Apple controls 70% of the digital distribution for musical recordings. Amazon and Apple hold each a monopolistic control on one of the two segments of eBooks distribution. Netflix has a strong dominant position in the digital distribution of movies in those countries where it is active. Often integrated vertically from publishing to final distribution, entering in agreements with telecommunication operators, these groups: |+|
one the , will for in the . of the . a on one the of . has in the of to and the of , the of the .
|−|* impose the economic terms and the conditions of distribution to authors and small publishers, | |
|−|* restrict usage terms for the public often beyond what is desired by authors and artists, | |
|−|* block in part the evolution towards an increased diversity of attention to works which should develop in the digital era. | |
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|−|Monopolies or dominant positions in physical distribution or live performance programming, such as LiveNation's for concert tours or Amazon's for paper book, record and DVD sales restrict the ability of artists and authors to cash on the notoriety they have obtained on the Internet. |+|
, or , and the of artists
to on the have .
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|−|This situation has developed through a major failure of competition policy. Efficient competition policy must be preventive, in particular in the digital world where once installed, dominant positions are incredibly difficult to challenge, due to network effects. In particular, it is important that any distribution platform can distribute contents under terms that are as favourable than those conceded to its largest competitors. Compulsory collective licensing for digital distribution is the natural instrument to obtain this result. However, one can not stop there. In France, a recent law has been adopted to impose a unique price for eBooks, that can be set by the publisher. It is incredible that the government advisers and the MPs did not understand (or feign to not understand) that this would lead to results exactly opposite to those that were claimed to be aimed at . It will permit publishers to agree among themselves on keeping the price of eBooks high and implementing a policy of higher prices for big sellers. This will institutionalize an unfair competition between these large publishers and their smaller competitors. By presenting the eBook as a substitute to the paper book and not a complement, one will undermines their potential synergy, that rests on a low price for eBook and on combined offers. Concerning the positive effects on bookstores that had motivated an earlier law on the unique price of paper books, they are non-existent for eBooks, despite efforts of some alternative publishers to reintroduce bookstores in the value chain of eBooks. |+|
of the to to it at a of the .
9. Reform of collective management
If one follows the approaches tabled in this document, collective management will play an important role for collecting and redistributing sums originating in the commercial exploitation of works by distributors. This can not happen without a radical reform of the governance of collecting societies. The European Commission initiated a reform process recently materialized by a directive proposal with one part on cross-Europe music licensing and one part on the general governance reform of collecting societies. This proposal has some merits, in particular the imposition to allow for a separate management for various types of rights, which will permit authors to regain more power on exploitation rights and the non-market dissemination of their works. However, the governance side of the proposal is very disappointing.
The directive proposal does not solve the structural problems in the collecting societies governance that make them instruments of an unfair distribution of the collected funds:
- The existence of a censal vote system connected to elections by colleges, often separating large benefitters from small. This situation frequently leads to a coalition of publishers (or other assignees of rights), stock owners of rights and heirs of deceased artists holding the majority of votes, with authors or artists contributing to future creation having only a minority of votes. The principle of one person/one vote must apply.
- A total lack of transparency on the statistical distribution of the redistributed sums (ranked sums by decreasing order, distinguishing between sums redistributed to living artists and those distributed to assignees and heirs). This data must be of compulsory publication and auditable by representatives of authors, artists, consumers and users.
- The treatment of the "undistributed" sums due to too small amounts, to a difficulty in localizing the benefitters, or because funds were collected for works on which the society did not hold management rights. These sums are either stored or redistributed to the other members, prorata of their income, which amounts to a significant subsidy of the wealthiest by the poorer or the public. This is not compensated by the measures in favour of small recipients that have been put in place by some societies.
The Members of the European Parliament will have to amend the proposal text to ensure it achieves at least a proper treatment of the issues listed above.