Finnish court of appeals finds collecting society’s royalties unfair

On 30 June 2011 the Helsinki Court of Appeal held that a collecting society of music copyright holders, Teosto, abused its dominant position by introducing a new pricing model.

The suit concerns a new rate structure that eliminated separate tariffs for certain types of live music venues by introducing a single tariff, resulting in an overall increase in prices for music use.

The Helsinki Court of Appeals noted that, fundamentally, Teosto has the right to raise prices for objective reasons. However, the court found that Teosto did not establish that the new pricing model resulted from such objective reasons. In particular, while the reasons set forth by Teosto would, in theory, be valid, the court found that Teosto did not provide sufficient evidence to support these reasons for increasing prices. For instance, Teosto failed to prove either that substantial changes had occurred in the live venue marketplace or that the level of compensation for music use had fallen over time. Accordingly, the court affirmed that Teosto had abused its dominant market position by imposing unfair prices. [Juha Vesala]