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Wednesday, 4 March 2009

Japan's fair trade enforcers put the boot into JASRAC

The IPKat's Japanese friend and colleague Kaori Minami has just sent him this little piece of fascinating news from Japan. Writes Kaori:

"The Japan Fair Trade Commission (JFTC) issued a Cease and Desist Order against the Japanese Society for Rights of Authors, Composers and Publishers (JASRAC) on 27 February 2009, having found that JASRAC's method of comprehensive collection of royalties from broadcasters was a form of private monopolisation prohibited by the Antimonopoly Act (a brief English translation of the Order is obtainable from the JFTC’s website here)

JASRAC, a Japanese collecting society dealing with musical works, has almost a 100% market share.  It was the only collecting society for musical works until 2001, when a new law was enacted to reduce the requirements for operating a copyright management business in order to enable other collecting societies to enter the market. e-license Inc was the only company to go into this line of business with regard to broadcasting, but it has almost no such business at present.

According to the Order, all broadcasters are under an agreement with JASRAC, which is employing a method of comprehensive collection. By this method, a royalty is calculated by multiplying broadcasting business income by a fixed rate (1.5%). The actual number of musical works used by each broadcaster is not reported or reflected in the calculation. Broadcasters can pay the royalty on an individual use basis, but no broadcaster does so in that it is far more expensive than the comprehensive method. As a result, the total amount of royalty charged to the broadcaster will increase if it uses the musical works managed by other collecting societies and has to pay additional royalties to them. Although e-license managed musical works which were supposed to be popular, broadcasters rarely used them to avoid paying additional royalties.

JASRAC said in a press statement that they could hardly accept the Order. They are going to file an opposition and take every possible measure to against it. They basically say that the Order is wrong as it does not suggest any alternative collecting method, and amendment of the current method is not feasible by itself unless all the broadcasters agree to it. JASRAC also reportedly says that the current comprehensive method is convenient for broadcasters because they can avoid the time and cost of counting the number of broadcast musical works.

It is understandable to some extent that the current method is beneficial to users. JASRAC’s dominance was accepted for over 60 years, so it may not be easy for a competitor to enter into the market. Nevertheless, it would not be healthy to have no competitor in the market, and the Order may contribute to the transparency of the licensing business in Japan".
The IPKat says, we've been so preoccupied with the battle between collecting societies and competition authorities in Europe for so long that we might easily think this is a purely European problem. Manifestly it is not.  Merpel asks, how seriously can arguments based on convenience be raised in an age of white-hot technology in which it should be the simplest thing to have all relevant broadcast material logged, timed and weighed out in order to provide precise user data?

Teach yourself Japanese here
Broadcast yourself here


Majo said...

Tricky subject ... it is the difference between morals and the difficult parallel drawn between the giverning rules - that twangs on the heart strings

C.E. Petit said...

And, just to make things even more interesting, the Google Book Search proposed settlement would set up another "collecting society" that would have precisely these problems. Gee, do you think that might be something the court should consider in approving/disapproving the settlement? How about Google's stated aim to go global with the settlement?

Dennis Collopy said...

I would have thought following the EC's action against the EU Collection societies in 2008 that it must be obvious that the rights holders (both national and international ) and members' wishes must be taken into account not just the wishes of the users. How can an alternative to JASRAC work without any repertoire. Another example of how unfettered application of competition law just increases the complexity of licensing at a time when it needs to be simplified.

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