MEPs have called on the European Commission to come up with binding legislation for the online music market to ensure European cultural diversity in the music sector.
Deputies in the European Parliament's legal affairs committee voted on Tuesday (27 February) in favour of an own-initiative report by Hungarian socialist MEP Katalin Levai on the cross border management of copyright for online music services, criticising the EU executive's non-binding recommendation put forward in 2005.
The MEPs in the committee instead want an EU law to be proposed under the co-decision procedure – meaning that both member states and the parliament are involved in shaping the law.
"This new proposal should guarantee the protection of EU cultural diversity and safeguard small artists and local repertoires," the committee said in a statement after the vote.
Song-writers' and composers' rights are currently controlled by Collective Rights Management societies (CRMs) which grant national distribution licences for record labels and online shops and collect royalties of a few cents per download.
The artists are most often represented by their national CRM society - some of which date back to the 1850s - and in the other EU countries by virtue of reciprocal bilateral agreements that allow, say, a Spanish society to licence Dutch music in Spain while channelling cash from Spanish royalties back to the Netherlands.
But with the EU digital music sector set to become a €3.9 billion a year industry by 2011, the major record labels are pushing Brussels to break-open the rights monopolies system.
The European Commission therefore proposed in its recommendation to open up the copyright market to competition allowing those interested in trading music on the web to negotiate with one CRM instead of each individual CRM in the 27 different EU member states.
But MEPs are saying that although competition is good, to open the market without a set of restrictions would endanger European cultural diversity with CRMs then focusing on making money instead of diversity, hampering the developments of national and local music markets.
DIVERSITYThe committee called on the commission to introduce controlled competition to encourage modernisation and competitiveness in the online music market while at the same time protecting local and niche repertoires by asking CRMs to provide consumers with a diversified range of music products.
"It is very much in favour of the diversity of the culture in Europe," Willem Wanrooij, public affairs manager of the Dutch Buma/Stemra collecting society, said about the adopted report.
He explained that the commission recommendation mainly benefits the big players in the industry, many of which are owned by Anglo-American interests.
"Diversity is what makes European culture interesting," Mr Wanrooij said, adding that "we have to rely on diversity to fight competition from the US and Japan."
"If we kill diversity, we kill our competition position," he told EUobserver.
The parliament as a whole will vote on the report on 12 March when they meet in Strasbourg for their monthly plenary session.