Copyrights and related rights are a branch of intellectual property. Copyright protects authors of literary and artistic works. Related rights protect performances by holders of related rights. These may be performers (singers, musicians, actors, etc.), producers of sound works or first film recordings, radio/television organisations and databank producers.
The most important legislation in this sector is the Law of 30 June 1994 on copyrights and related rights (hereinafter referred to as the "Copyright Law").
This regulation affects us all, even in our daily lives, such as when we listen to the radio, watch television, surf online, read the newspaper, go to the cinema, photocopy an article in a magazine or copy our favourite CD.
We use copyrighted material every day. The copyright law governs the rights of copyright owners and the obligations of those who use protected works, determines how copyright holders may exercise their rights and lays down what users must do to use works legally.
In practice, it is impossible to organise a direct contractual relationship between copyright holders and the user for some types of use. This is generally due to two factors: the large quantity and dispersion of copyright holders and users on the one hand and the very short interval between the decision to use the work and the effective use of the work on the other hand, which does not allow the user to identify the copyright holders and to reach an agreement with them.
The following types of use fall into the aforementioned category: radio broadcasting and public performance of musical works, cable re-broadcasting of performances and works, private copying of audiovisual and sound recordings, reprography and public lending.
In these sectors, copyright holders decided to be collectively managed by copyright management companies. These companies are generally limited liability cooperative companies governed by civil law. On the basis of reciprocal representation agreements signed with foreign companies, Belgian copyright management companies also represent foreign repertoires in Belgium, and conversely, foreign companies represent the repertoire of Belgian companies.
Concentrating copyrights or related rights related to a specific method of use within one company provides advantages to users of protected works and performances. Users have a single contact point which is supposed to represent a large repertoire of protected performances and works. In addition, they may sign a general agreement with the company for the use of the entire repertoire. In exchange for an authorisation to use the protected work, the user generally commits to pay for this use and to provide a list of works and performances used.
The concentration of copyrights within a management company also offers advantages to copyright holders. They have the possibility to properly exercise their exclusive rights and their right to remuneration. Without collective management, most copyright holders would receive no remuneration for the use of their performances and works.
As legislators are aware of these advantages, they have made collective management a requirement for certain types of use. This concerns cable re-broadcasting, private copying of sound and audiovisual recordings, reprography and public lending as well as radio broadcasting and screening of performances in public access buildings. To this end, legislators have established a presumption of copyright management in favour of collective management companies (Art. 53 of the Copyright Law) or accorded a rightful copyright monopoly to a management company for the collection and allocation of compensation rights (Art. 42, 55, 61 and 63 of the Copyright Law).
Still, the concentration of rights within one company gives it a dominant market position. Most of the time, this is a de facto monopoly. For private copying and reprography, two companies have a de facto monopoly. For certain types of use, there is competition between two or three companies. This is particularly the case for resale rights (required in case of resale of original works of art) and “major rights” (for example, rights on plays, operas, audiovisual works and literary works).
Management companies have a monopoly position. They generally practice unilateral pricing as well as unilateral setting of reference amounts, copyright payment collection methods, conditions of authorisation for copyright holders, the status and rights of copyright holders within the company, the method of divvying up rights and the coverage of operating costs.
In order to prevent abuse of position and discriminatory behaviours (or in order to correct them), legislators have:
- Accorded rights to copyright holders and
- Imposed obligations on management companies.
The main rights given to copyright holders are:
- The right to be represented in company bodies (Art. 65bis, paragraph 2, line 3 of the Copyright Law), which gives them the right to serve as business associates and take part in the election of administrators;
- The right to entrust the company of their choice with managing one or more categories of works or performances from their repertoire, or to do so themselves (65bis, paragraph 2, line 1 of the Copyright Law);
- The right to entrust another management company with managing the rights associated with one or more categories of works or performances, or to do so themselves (Art. 66.4, paragraph 1, line 1).
The main obligations of management companies are:
- Only accept copyright holders as associates (Art. 65bis, paragraph 2, line 1);
- Upon request of a copyright holder, manage the latter’s rights, in as much as the request is in line with the company's purpose and status (Art. 65.3, paragraph 1);
- Publish rules on pricing, collection and allocation (Art. 66, paragraph 1);
- Allow any persons with a legitimate interest to access (on-site or in writing) the repertoires which the companies manage and, if necessary, to provide written confirmation that a particular work is part of said repertoire (Art. 66.4, paragraph 2, line 1);
- Allocate between copyright holders of the concerned category any funds which have been definitively unable to be allocated (Art. 69);
- Provide certain documents to any associate who might request them (Art. 70);
- Save data related to pricing, collection and allocation of copyrights for ten years (Art. 76.3);
- Ensure professional secrecy for all information held by the company or which might be encountered during the exercise of their functions (Art. 78).
In order to ensure better transparency regarding their activities, management companies are also subject to certain accounting requirements. The main requirements (which enter into effect once the implementing orders are enacted):
- Separate managed copyright assets from own assets (Art. 65.3, paragraph 3), which requires uniform accounting methods for management companies;
- Pay the amounts collected for copyright holders to a special account (Art. 65.3, paragraph 3);
- Prepare a management report including analytical accounting (Art. 65.4, paragraph 2).
When writing the Copyright Law, legislators clearly expressed their desire to establish effective monitoring of the activities of management companies. On the one hand, management companies play an ever-increasing role in the effective implementation of the privileges afforded to copyright holders. The establishment of compensation for methods of use such as private copying and reprography reinforces their role as imposed partners for both copyright holders as well as users.
On the other hand, management companies collect and allocate large amounts of money and complaints have been made in regard to the lack of transparency for their activities as well as regarding their high operating costs.
Given these facts, legislators decided to:
- Guarantee to copyright holders, users and the general public that management companies actually have the qualities required to carry out their activities;
- Guarantee objective and efficient allocation of funds;
- Guarantee better transparency of management companies’ activities, including accounting, particularly via adopting a normalised minimum accounting plan (Art. 65.4, paragraph 1, line 2, not yet in effect).
The Copyright Law reinforces the internal monitoring of management companies by associates by enlarging the conditions of admission to management companies and increasing representation of copyright holders within company bodies (Art. 65bis, paragraph 2 and Art. 65.3, paragraph 1) as well as laying down certain obligations regarding the purpose of a certain number of rights (Art. 69) and providing a certain number of documents to associates (Art. 70).
Article 68 of the Copyright Law subjects management companies to auditing from an auditor chosen among the members of the Institute of Company Auditors. As defined in Art. 68.4, his mission is to audit the financial situation, annual accounts and the regularity of activities which must be mentioned in said accounts.
Articles 69 and 70 of the Copyright Law make the auditor responsible for certain specific missions.
Management companies must be authorised to engage in their activities in Belgium by the minister responsible for copyright (Art. 67).
Monitoring by the administration
The monitoring department of the Federal Public Service responsible for copyright is in charge of monitoring management companies’ adherence to all laws and their application of statutes, pricing rules and collection/allocation rules (Art. 76 of the Copyright Law).
Article 76 of the Copyright Law lays down a process for external monitoring of the legality of management companies’ statutes, rules and activities.
This is not meant to monitor whether management companies make appropriate decisions. As private companies representing private interests, management companies are themselves responsible for defining policies and making choices which best represent their interests, within legal limits.
In accordance with Article 76 of the Copyright Law, the monitoring department verifies whether the decisions made and steps taken by management companies correspond to their legal, contractual and statutory obligations. It also processes complaints about management companies. Finally, each management company undergoes a thorough bookkeeping analysis every year.
In addition to noting any infractions of legal provisions, orders of implementation and pricing, collection or allocation rules, the monitoring officers are responsible for seeking out any infractions targeted by Article 78bis.
Want to submit a complaint?
The monitoring department is responsible for ensuring that management companies adhere to all laws, statutes and rules on pricing, collection and allocation. A complaint may be submitted to the Directorate-General Economic Inspection (monitoring department for management companies) regarding a copyright management company by users, copyright holders or third parties whenever the decisions made and steps taken by a management company do not meet their legal, contractual or statutory obligations.