In a judgment published on 15 February 2023, the Italian Council of State (“CdS”) definitely upheld the 2018 Italian Competition Authority (“ICA”) decision which found that the management of copyright and of plagiarism protection services offered by the Italian copyright collecting society (“SIAE”) to be in breach of Article 102 TFEU.
According to the ICA, the SIAE put in place a unitary and complex exclusionary strategy in the market of collective copyright management by way of imposing constraints in the offer of different services for copyright management services and plagiarism protection services, constraints in the management of rights of authors not registered with the SIAE as well as of obstacles to competitors in the management of repertoires of foreign rights holders.
The abusive conduct therefore concerned three aspects of SIAE's overall activities: the foreign repertoire of protected rights, the protected works communicated online, and the plagiarism protection services.
The alleged unlawful practices put in place by the SIAE relate to the period ranging from 2012 to 2017 (the date of entry into force of the Italian legislative act implementing the so-called “Barnier Directive” on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online use in the internal market).
The contested practice therefore relates to the period prior to the liberalisation of the Italian market of collecting copyright management, in which the SIAE held the legal exclusivity for intermediary activities, however implemented, of protected works. In particular, Article 180 of the Italian copyright law attributed to the SIAE:
The SIAE thus contested the ICA allegations affirming that the alleged abusive conducts fell within the scope of application of Article 180 of the Italian copyright law and were therefore lawful.
However, both the Lazio Regional Administrative Court (“TAR Lazio”) in first instance and the CdS in last instance, confirmed the ICA decision. The CdS stated that some of the alleged abusive conducts put in place by the SIAE fell outside the objective and subjective scope of application of the statutory exclusive rights recognised to the SIAE by Article 180 of the Italian copyright law until 2017.
In its decision, the CdS agreed with the ICA on the following aspects:
On the contrary, the CdS upheld SIAE’s claims concerning:
In conclusion, even though part of the SIAE claims against the ICA decision have been upheld, the CdS considered that the SIAE had violated Article 102 TFEU:
The described abusive conducts of the SIAE did not foster competition on the merits and ended up making it more difficult for SIAE's competitors to enter the Italian market in certain areas of the collective rights management sector that were left open to full competition (even prior to the Barnier Directive reform).
In this respect, the CdS rejected SIAE’s request for a stay of the proceeding at stake in order to await the decision of the EU Court of Justice (“ECJ”) on the question referred for a preliminary ruling by the Rome Tribunal on the compatibility of the new Article 180 of the Italian copyright law with the Barnier Directive. Indeed, the CdS underlined that the ICA decision appealed by SIAE refers to SIAE's extension of its dominant position outside the areas covered by the legal monopoly established under Article 180 of the Italian copyright law (in its pre-reform wording) and not to the compatibility of such legal monopoly with EU law.
The answer of the ECJ will in any case shed light on the remaining open questions of SIAE’s future role in the new Italian legislative landscape of collective right management.
For more information, please contact Federico Marini Balestra, Lucia Antonazzi and Chiara Horgan.