ECJ Advocate General Trstenjak’s Opinion in Kanal 5 Ltd, C-52/07

The ECJ Advocate General Trstenjak’s opinion (currently not available in English) was published on 11 September 2008 in the Kanal 5 Ltd, C-52/07 case. The case concerns a request of the Swedish Market Court for a preliminary ruling on the interpretation of the prohibition of the abuse of a dominant position to pricing models applied by a music copyright holders’ collecting society in licensing music to television broadcasters.

According to the opinion, if in such pricing model the relationship between the economic value of the license and the price paid for it is disproportionate, the use of such a model may constitute an abuse under Article 82 (a) EC Treaty’s prohibition of unfair prices and terms, unless such a pricing model can be justified by efficiencies.

The Advocate General considered that it would not be an abuse to use a pricing model that is based on a variable part of the advertising and subscription income of the television channel if the model takes into how much copyright protected music is used by the television channel.

However, if a more accurate pricing model exists for identifying the income associated with specific television programs or times of broadcast, it may constitute an abuse to use a model that disregards such information and thus distorts the relationship between the income associated with the use of music and the price paid for it. That may be the case if particular programs generate substantial advertising or subscription income but use little music. Nevertheless, a cruder model may be justified by efficiencies (e.g. lower costs of administrating and monitoring the use of music).

No information is currently available on when the actual ECJ judgement is due.

Advertisements