Unfair commercial practices, case VI ACa 1179/11

February 20th, 2012, Tomasz Rychlicki

The President of the Office of Competition and Consumer Protection in its decision of 29 August 2008 case DOK – 6/2008 ruled that two Polish collecting societies, the Association of Writers and Composers (Stowarzyszenie Autorów – ZAiKS) and the Polish Filmmakers Association (Stowarzyszenie Filmowców Polskich – SFP), were involved in actions deemed as infringement of competition on the relevant market. This decision concerned the agreement on uniform rates of copyright remuneration that were collected from commercial users for the sale of audiovisual works on media intended for private use. The request to initiate antimonopoly proceedings was filed by the Polish Press Publishers Association (Izba Wydawców Prasy – IWP) based on the provisions of the Polish Act of 16 February 2007 on Protection of Competition and Consumers – APCC – (in Polish: Ustawa o ochronie konkurencji i konsumentów), published in Journal of Laws (Dziennik Ustaw) No. 50, item 331, with subsequent amendments.

IWP claimed that ZAiKS and SFP are competing entities because they are active on management and collecting in the same fields of exploitation of copyrighted works, and authors, creators and copyright owners can freely choose the collecting society they want to be represented by.

The President of the OCCP found that ZAiKS and SFP decided that the minimum remuneration rates for one copy of the media will be for a movie on DVD – 2 PLN, for a movie on VCD and VHS- 1,1 PLN, for a cartoon movie on DVD – 1.6 PLN, and for a cartoon movie on VCDs and VHS – 0,8 PLN. Minimum rates for a copy of audiovisual work on the media that are sold together with other products, including, in particular newspapers and magazines were set on an even lower level. For instance for a DVD that was put on the market before 1 July 2004 – 1 PLN, and from 1 July 2004, 0.60 PLN, There were also introduced discounts from 5% to 40% depending on the number of copies (from 100.000 to above 700.000 copies).

Members of IWP, who are press publishers, are also contractors of ZAiKS and SFP. The Press publishers add copies of DVD movies to their newspapers and magazines, as the so-called inserts. They are required under the provisions of Polish copyright law to pay appropriate remuneration for the reproduction of the audiovisual work on the copy for individual use. The remuneration fee is paid by the press publishers only through the collecting society. IWP argued that the remuneration of the authors for use of audiovisual works should be individualized, and the conditions of agreement to use the work should be negotiated. The collecting societies should negotiate different rates for different movies. Such actions would prove the real concern for the interests of every member of each collecting society, because the authors of a better movie should earn more. The rates covered by the agreement between ZAiKS and SFP did not include possible revenues from the use of audiovisual works, nor the specifics of this use. Thus, according to the IWP, the agreement of ZAiKS and SFP on the application of uniform rates, deprived commercial users the possibility to negotiatie the rates, and significantly restricted competition.

ZAikS and SFP filed complaints against the decision of the President of the OCCP. The Polish Court of Competition and Consumer Protection in its judgment of 8 July 2011 case file XVII AmA 23/09 dismissed them. The Appeallate Court in Warsaw in its judgment case file VI ACa 1179/11 dismissed the appeal.