Collecting societies OSA and INTERGRAM fined for forcing providers of accommodation services to pay copyright levies
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I enjoy working with innovative, creative and technology-rich businesses. Having joined our firm in 2009, I head up our Intellectual Property and Tech & Comms Groups in the Czech Republic and Slovakia.
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The Czech Office for the Protection of Competition ("Office") published a press release (without publishing the full decisions yet) regarding the rejection of the appeal of the collecting society for music authors’ rights OSA - Ochranný svaz autorský pro práva k dílům hudebním, z.s. ("OSA"), and confirmed the first-instance decision, by which a fine of CZK 10,676,000 (approx. EUR 408,000) was imposed on OSA for abuse of dominant position.
According to the appealed decision, OSA violated both the Czech Competition Act and the EU competition rules by imposing inadequate conditions on accommodation facilities for acquiring licenses for usage of copyright by means of audio or audio-visual devices (TV sets) in hotel rooms between 2008 and 2014.
In particular, OSA did not take into account the occupancy of hotel rooms within the abovementioned period. The operators of accommodation facilities were required to pay copyright levies even when the room was not occupied. In view of the Office, the requirement to pay copyright levies even in cases when it can be proved that copyrighted works could not have been used by the licensee, i.e. when the room was empty, cannot be perceived as an adequate condition and it thereby does not meet the requirement of proportionality of mutual performance and consideration of the contract. Given that the full decision is not publicly available yet, it is not known if (and to what extent) the Office based its decision also on the EU Information Society Directive 2001/29/EC, which sets out that the copyright levy should be "fair" and should provide "adequate" compensation to the rightsholders represented in this case by the collecting society.
A similar situation occurred in the case of INTERGRAM, z.s. ("INTERGRAM"), a collecting society of performing artists and producers of audio and audio-visual recordings, where the Office by its first-instance decision of 14 December 2020 imposed a fine of CZK 20,799,000 (approx. EUR 795,000). Between 2009 and 2014, INTERGRAM abused its dominant position by forcing providers of accommodation services in the Czech Republic to pay a copyright levy for the use of audio and audio-visual recordings also without considering the occupancy of hotel rooms. Similarly, it required the operators of accommodation facilities to pay the copyright levies for unoccupied rooms. INTERGRAM was found to have violated both the Czech Competition Act and Article 102 TFEU.
For more information contact Vojtech Chloupek and Jiri Svejda.
