UFOs over Italy – why OSA is good law and the Italian law is in accordance with the EU norms concerning the status of IMEs at issue in the LEA v Jamendo case
The regulation of the status of IMEs in the CRM Directive has taken place without due preparatory procedure, without appropriate impact studies and without due involvement of the key stakeholders. The adopted rules are in conflict with the principle of equal chances in the market of those who carry act the same activities as well as with the international and EU provisions on the protection of cultural diversity, and have the potential to undermine the normal functioning of the collective management system. In the LEA v Jamendo case, now in front of the CJEU for preliminary ruling, Jamendo, an IME claims that Italy violates the EU law because, although now it allows CMOs to compete with SIAE which previously enjoyed de iure monopoly, the same does not apply to IMEs. The Advocate General proposes that the Court find in favor of Jamendo. In the paper, it is discussed why his arguments supporting his opinion are not well-founded. At least, certainly not concerning the right of public performance licensed by Jamendo for background music (while in respect of licensing the “synchronization” of music in audiovisual works, the answer requires more thorough considerations). The paper points out that the AG wrongly claims that the CJEU erred in OSA where it confirmed that, in a situation like the one at issue in that case (which, at least concerning the licensing of background music, is the same in LEA v Jamendo), there is a need for a de iure monopoly position (by recognizing that natural monopoly is involved) and where it ruled that the Services Directive is not applicable to collective management. The AG’s claim that IMEs like Jamendo as presumed “information society providers” would have been free to license uses, such as those in the LEA v Jamendo case, is also rebutted. The AG’s allegation, according to which it is against the EU’s competition norms that Italy allows the operation of CMOs but not IMEs, is not well founded either. IMEs, like Jamendo, with their huge but unjustified competition advantages granted them in the CRM Directive, tend to create disruptions in the collective management system, and may endanger cultural diversity. For these reasons, it justified that, Italy, at least where collective management is a necessary way of exercising copyright and related rights (in particular where there is a natural monopoly situation) does not allow IMEs to “compete” and to enter the cultural market.