Media: EU Copyright Nominee Stirs Debate

Marietje

BRUSSELS—The appointment of a former record industry representative as EU copyright chief has raised questions in Brussels about plans to overhaul the bloc's copyright rules, which musicians, companies, and EU Parliamentarians have all said need fundamentally changing.

By Francis Robinson, 14.4.2011, www.wsj.com Maria Martin-Prat, formerly director of legal affairs and deputy legal counsel of the record company trade association International Federation of the Phonographic Industry, will take over as head of the copyright unit in the European Commission's internal market department on April 16. But two members of the European Parliament have questioned the appointment in a formal request to the commission, the bloc's executive arm. "The appointment of a former record company lobbyist as the head of the European Commission's copyright unit is unfortunate and sends the wrong signal to all stakeholders," said Dutch Liberal MEP Marietje Schaake, who raised the question along with Swedish Pirate Party MEP Christian Engstrom. "The whole EU copyright system needs to be reviewed and reformed, because it has been upset by the characteristics of the internet," she said in an interview. But Chantal Hughes, spokeswoman for EU Internal Market Commissioner Michel Barnier, said that Ms. Martin-Prat "will, of course, respect the highest standards of integrity." "She left the recording industry seven years ago and she has held important jobs dealing with other subject areas since," Ms. Hughes said. "Her expertise in copyright matters—having worked not only in industry, but also as a legal advisor and a civil servant—will be a real plus for the future development of Europe's copyright policy." The EU declined to make Ms. Martin-Prat available for an interview. The appointment, which was made last month, is the precursor to a major overhaul of the rules governing copyright and related areas in the 27-nation bloc. The system, which was largely developed in the era of vinyl and tapes, was upset by the advent of the internet contributing to the music industry's well-documented piracy problem. All parties involved agree the system needs reform, but differ on what needs to happen next. "Current copyright rules reflect the analogue era, and legislators need to change this, as there's little incentive for record companies to do so," said Mark Kelly, keyboard player in Marillion and CEO of the Featured Artists Coalition, which represents musicians' interests. "The commission should use the review process to make things fairer for artists and musicians." The two areas under review that are of key interest to the music industry are the reform of copyright collecting societies, or CCS, which collect and distribute royalty payments, and pan-EU licensing, which some think could combat piracy by making it easier to purchase music legitimately. "Many of these societies operate as virtual monopolies with little regard for the people they were set up to serve," said Mr. Kelly, citing practices such as holding onto royalty payments for several years between collection and distribution and failing to provide a breakdown of where royalties had been earned. There's also criticism of CCS from within the commission. Late last year, EU Commissioner for the Digital Agenda Neelie Kroes said the "fragmented copyright system... has ended up giving a more prominent role to intermediaries than to artists." CCS are keen to point out that they're changing, and forming new cross-border partnerships for copyright databases and new systems to better process the huge amounts of data involved in paying artists. "We're investing heavily to bring a better service to members," said Robert Ashcroft, Chief Executive of PRS For Music. "We're owned by our members and we pay out money as quickly as we can, four times a year." PRS For Music processes over 25 billion uses of music annually and collected £611 million in royalties last year. It has also granted 17 pan-European licenses to music distribution services such as Apple Inc.'s iTunes and Spotify. Proposals expected in coming months include an obligation for copyright holders to grant EU-wide licences, rather than the traditional national ones, which Ms. Kroes and others say will help prevent piracy. Back in 2009, Apple said that if iTunes were readily able to license rights on a multi-territorial basis, it would consider making its content available to all European consumers. Cyprus doesn't have iTunes at all, while some other EU member states don't have access to the full range of content. The company wouldn't comment on the current situation but reiterated that iTunes belongs to the Global Repertoire Database Working Group which addresses multi-territory licensing issues. Nevertheless, some say that the push for more pan-EU licensing will do little to combat piracy, the industry's biggest problem. The potential for the digital music industry is huge, said IFPI CEO Frances Moore, "but because of the massive unfair competition from piracy, the legitimate digital business is not developing at anything like the rate it should be." The solution lies not in obliging the industry to license rights in particular way, but doing more to enforce the current rules, according to the record industry. "What we need, at both an EU and a national level, is graduated response legislation to deal with the peer to peer piracy problem, where users who infringe copyright are warned, before facing sanctions if those warnings are ignored," Universal Music Group International's General Counsel Richard Constant said. He added that effective legislation at EU and national level to combat illegal websites breaking copyright laws will need the cooperation of internet service providers and telecom operators. "Some politicians are now starting to care because they are seeing the effects of piracy leading to the collapse of the content industries," Mr. Constant said, citing Spain as an example—there wasn't a single new domestic Spanish artist in the country's top 50 albums in 2009 or 2010, "a direct consequence of the difficulty of breaking new acts in markets where piracy is out of control."