Originally created 05/04/04

EU says music licensing groups may be hampering Internet services



BRUSSELS, Belgium -- The European Union launched a probe Monday into 16 national organizations that collect royalties for composers and songwriters, charging that their system for licensing music is hampering the rollout of Internet downloading services across Europe.

Record companies in Europe say they are willing to license downloads on a pan-European basis, but the royalty-collecting societies insist on licensing music authors' work country by country, the way they do for concerts, radio and compact discs.

In its statement of objections, the EU's trustbuster said a preliminary assessment found the royalties societies' cross-licensing arrangements are extending the organizations' monopolies onto the Internet.

Such exclusivity, the European Commission said, "is not justified by technical reasons and is irreconcilable with the worldwide reach of the Internet. The commission added that the situation is "to the ultimate detriment of consumers."

The commission wants collecting societies to compete with one another in offering pan-European licenses, which would let Internet services sell music downloads anywhere in the 25-nation bloc and could lead to big commercial song services like those that have emerged in the United States.

The licensing societies were given 10 weeks to respond and will be allowed to defend themselves at a hearing. There are no deadlines for investigations in such cases, which can take years.

If the EU rejects the groups' licensing system, they would be vulnerable to lawsuits.