Music

Spanish Society of Authors & Publishers Fined Nearly $7M for Anti-Competitive Behavior

The Spanish Society of Authors and Publishers (abbreviated SGAE in Spanish) has been fined 6.38 million euros (more than $6.9 million, using the average 2023 conversion rate) by the Comisión Nacional de los Mercados y la Competencia (CNMC) for anti-competitive practices related to its licensing deals with radio and TV stations.

SGAE has been fined for “two infractions of abuse of dominant position” by designing and applying its licensing rates in a manner that forces radio and TV operators to accept an “averaged availability rate” (comparable to a flat rate) to be able to use its repertoire, according to a CNMC press release on Wednesday (June 26).

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The widespread application of the flat rate by the Spanish collecting society “has had a double anti-competitive effect,” the CNMC says. The first effect, which the CNMC refers to as “exploitative abuse,” results from SGAE’s practice of forcing licensees to pay the flat rate “unrelated to the actual use they make of their repertoire, both in terms of the number of works and the intensity of their use,” according to the release, which states this practice has been ongoing since “at least” Jan. 1, 2016.

Because licensees are forced to pay the flat rate regardless of the extent of their use of SGAE’s repertoire, the CNMC adds, licensees’ incentives to contract with SGAE competitors with less substantial repertoires are limited — a second anti-competitive effect that hinders “the entry and expansion” of those competitors in the marketplace.

According to the CNMC, SGAE “enhanced” the latter effect — which it says SGAE instituted from “at least” Jan. 1, 2016, through Dec. 31, 2017 — by “presenting its musical repertoire to users as universal and offering guarantees of indemnity against possible claims by third parties for the use of rights that do not belong to its repertoire.” The CNMC argues this further limited incentives for licensees to contract with SGAE competitors.

In addition to fines, SGAE has been ordered to cease these behaviors.

Investigations into SGAE began after complaints were made by audiovisual media copyright entities Management Entity (Dama) and Unison Rights, S.L. (Unison), the release states.

Billboard reached out to SGAE but had not heard back by press time.

Earlier this year, Billboard reported SGAE’s intentions to improve its reputation under new CEO Cristina Perpiñá-Robert, who was appointed a little more than a year ago.

“SGAE is one of the world’s leading CMOs, with a crucial role to play for its members,” Perpiñá-Robert previously said. “This year is our 125th anniversary, which is a chance to celebrate what we’ve achieved but also highlight where we need to reform. I’m determined that SGAE should achieve a greater presence internationally.”

Last year, SGAE took in 349.1 million euros ($377.8 million, based on the 2023 average conversion rate) and distributed 354.1 million euros ($383.2 million), according to its 2023 financial results, while the number of members with authors rights grew from 36,956 to 83,148.

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