ECJ’s judgment in Kanal 5 Ltd, C-52/07

On 11 December 2008 the ECJ gave a preliminary ruling in Kanal 5 Ltd (C-52/07) requested by the Swedish Market Court on whether certain remuneration models applied by a copyright management organization for the use of copyright-protected music in television broadcasts are compatible with Article 82 EC Treaty.

According to the ruling, a remuneration model in which the royalties for the use of copyright-protected musical works correspond partly to the revenue of the television channels does not amount to an abuse of a dominant position, provided that part is proportionate to the quantity of music actually or likely to be broadcast. However, that conclusion does not apply if another method exists that allows the use of the music and the audience to be identified more precisely without resulting in a disproportionate increase in the costs for the management of contracts and the supervision of the use of those works.

The ECJ reasons that it is appropriate to ascertain whether the royalties imposed are reasonable in relation to the economic value of the service provided by the rights management organization and to seek an appropriate balance between the interests of the composers and of the television broadcast companies.

The ruling also considers whether the application of different remuneration models to commercial companies and public service undertakings amounts to discrimination prohibited under Article 82 (c) EC Treaty.