News about the exercise of neighboring rights for musical works

The new Competition Law no. 124 of August 4, 2017 (Official Gazette no. 189 of August 14, 2017) has introduced relevant amendments to the prior law referred to in Art. 73 of Law no. 633/1941 (Copyright Law of Italy) in relation to the neighboring rights of copyright for the reproduction in public of musical works.

In accordance with the old text of the law, as well known, the exercise of neighboring rights for the usage of phonograms for purpose of gain was an exclusive right of the producer, who had the duty to share the remuneration among the artists who acted and performed.

Recently, the legislator intervened in the liberalization of the field of neighboring rights bargaining and in the limitation of the monopoly recognized, until now, in favor of the record producer.

The new art. 73, as modified by art. 1(56) Competition law  no. 124/2017, provides that

the producer of the phonograms and the artists who interpreted or performed shall be separately entitled to remuneration, for each used phonograms. Each undertaking conducting intermediation activity of the neighboring rights for copyright, to which the producer or the artists who interpreted or performed gave the consent in writing, shall be entitled of such right (…)”.

And there is more. The new subparagraph 2-bis of art. 73, included in the Competition Law, clarified that they are inalienable rights since the artists who interpreted or performed cannot waive nor give them to thirds.

From August 29, 2017, when the new law entered into force, even the collecting societies representing artists have the full power to negotiate with the users and collect the remuneration for the utilization of the phonograms, without the need for the intermediation of the record producer.

This news are part of the wider debate on the liberalization of the intermediary activity in the exercise of the copyright and the neighboring rights on which the Italian legislator already responded with the adoption of the Decree Law no. 35 of March 15, 2017 transposing in our legal system the Directive Barnier 2014/26/UE.

New development are expected.

While waiting, we point out that AGCM (the Italian Competition Authority) in 2016 had begun an investigation in relation to the Nuovo Imaie, a collecting society listed among the ten undertakings which can act as intermediary (art. 3 (2), Decree of the Italian President of the Council of Ministers (Decreto del Presidente del Consiglio dei Ministri, DPCM of December 2012), for a presumed abused of dominant position. The investigation has ended with the resolution of March 22, 2017 following the Nuovo Imae’s assumption of specific remedies to correct the presumed anti-competitive conducts to the detriment of other operators in the field.

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