Finnish Composers' Copyright Society Teosto has offered commitments to the Finnish Competition and Consumer Authority (FCCA) regarding the terms and conditions of the organisation’s membership agreement. The commitments ensure that in the future music authors and music publishers will be able to negotiate the licensing of their works directly with music users. At the same time, the commitments will encourage Teosto to operate in a more competitive manner.
Teosto is the only copyright society in Finland that manages copyrights of music authors and publishers. A key part of Teosto’s operations is to grant music users licenses to publicly perform, distribute and record music, and to pay royalties from those licenses to the authors and publishers. Teosto’s right to sign these contracts on behalf of individual authors and publishers is based on authorisation agreements.
Since the establishment of the organisation, the membership agreement signed by Teosto’s author and publisher clients has included a condition according to which the economic rights to all of the client’s works are assigned exclusively to Teosto. Due to this condition, Teosto’s clients have only been able to grant licenses to the use of their own music in specific situations defined by the Board of Directors of Teosto. Teosto’s clients have also not been able to transfer the copyrights to a single piece of music to parties such as their employers or clients.
Granting of direct licenses made easier
In June 2017, the membership agreement was amended to correspond to the requirements of the Finnish Act on Collective Management of Copyright which entered into force the same year. In the new membership agreement, the rights exclusively assigned to Teosto were categorised into five categories of rights, which are performing, radio and television, internet, copying and synchronizing. Music authors and publishers were offered the opportunity to withdraw categories of rights from Teosto’s management and the right to directly grant licenses for non-commercial of their music.
In November 2017, the FCCA presented to Teosto its preliminary assessment on the competition effects of the new membership agreement’s terms and conditions. According to the FCCA’s preliminary assessment, the exclusivity clause cannot be considered to be absolutely necessary to safeguard the rights and interests of individual authors and publishers. Even though termination of the membership agreement by right category is currently possible, the right categories have been defined so that they include licensing areas that apply not only to collective management but also to direct licensing. Partial termination also applies to the entire repertoire of the right holder in question.
Teosto has committed to amend its membership agreement so that in the future clients will be able to withdraw individual works from Teosto’s management and grant licenses to individual pieces of music on a case-by-case basis by notifying Teosto in writing. This means that Teosto’s clients no longer have to withdraw entire categories of rights or terminate the entire membership agreement in order to grant their customers or partners direct licenses to their own works. However, Teosto’s clients and users of music will be able to continue to utilise Teosto’s management services and licensing products when they find it appropriate.
Milla Määttä, Research Officer, tel. +358 29 505 3714
Jarno Sukanen, Head of Research, tel. +358 29 505 3352