ACCC requires improved dispute resolution in performing rights arrangements

The Australian Competition and Consumer Commission has reauthorised the Australasian Performing Right Association’s (APRA) arrangements for the acquisition and licensing of performing rights in music, subject to certain conditions.

APRA holds the rights for the performance of almost all music in Australia. A large number of businesses, including retail businesses, hospitality venues and broadcasters, must purchase a licence from APRA to broadcast music. APRA collects and distributes the royalties to its member composers, songwriters and music publishers.

Under the conditions of authorisation, APRA is required to produce a comprehensive plain English guide to its licences, as well as a guide that increases awareness of the licence back and opt out provisions. The conditions also require APRA to implement a new alternative dispute resolution (ADR) scheme that will be independent, affordable and practical for a range of disputes and applicants.

“While there are clear benefits from APRA’s arrangements, some licensees and members are unhappy about their relationship with APRA,” ACCC Commissioner Dr Jill Walker said.

“APRA is a virtual monopoly and has significant market power in relation to its dealings with users and its arrangements can also create inefficiencies for its members.”

The ACCC recognises that APRA has been taking steps to address the concerns of its stakeholders, and that these steps represent a significant improvement in APRA’s arrangements. The conditions of authorisation formalise many of the changes commenced by APRA.

“Many of the concerns raised have been from small businesses which are confused by APRA’s licensing process. The guide to licensing will help assist licensees with applying for the correct licence,” Dr Walker said.

“If disputes do arise, the new ADR scheme will be easy-to-use, even for small parties. Currently, small licensees have been deterred from using APRA’s expert determination process due to its formality and a perceived lack of independence.”

The authorisation is for five years. Interested parties generally supported a shorter period of authorisation. However in light of the amount of work undertaken to develop a new ADR scheme, the progress already made to address interested party concerns, and to allow time for the ADR scheme to become fully operational, the ACCC considers that it is appropriate to grant authorisation for a longer period than the three years proposed in the ACCC’s draft determination.

The conditions require APRA to arrange an independent review of the ADR scheme after it has been in operation for three years.

APRA’s arrangements were first authorised by the Australian Competition Tribunal in 1999 subject to conditions which required, amongst other things, the introduction of an expert determination process. The ACCC reauthorised the arrangements in 2006 and conditionally reauthorised them in 2010. On 15 October 2013, the ACCC proposed to grant conditional reauthorisation to APRA for three years. On 24 October 2013, the ACCC also granted interim authorisation.

Authorisation provides statutory protection from court action for conduct that might otherwise raise concerns under the competition provisions of the Competition and Consumer Act 2010. Broadly, the ACCC may grant an authorisation when it is satisfied that the public benefit from the conduct outweighs any public detriment.