Time to wake up - the EU sleepwalking into a financial and cultural disaster for Europe's music sector

15 March 2023 - Press release

Two and a half years have now passed since the decision of the European Court of Justice in the “RAAP” case (Case C-265/19). This decision has created an anomaly. The principle of reciprocity as enshrined under international copyright has basically been suspended as a result. If allowed to stand, this will have a massive impact on the livelihoods of thousands of European music artists and independent music businesses and on cultural diversity. 

Helen Smith, IMPALA’s Executive Chair, commented: ”A devastating transfer of over €125 million every year out of Europe is on the horizon. We have been calling on the European Commission to address this since the ruling came out in September 2020, but despite some initial positive signs last year the silence in recent months has been deafening.”

The biggest impact will be on those that rely most heavily on performance and broadcast income to make a living and run their businesses, European music performers and micro, small and medium sized record labels. Their income will drop significantly, and as they account for the vast majority of new music releases, these losses will result in a substantial decrease in investment in local music and artists and have a damaging impact on cultural diversity as a whole.

If not addressed, this also means that the EU and its member states will lose any trade leverage with countries like the USA who continue to deny protection to their own artists and labels when their music is played on terrestrial radio and in public. 

Nearly all music markets have stepped up to international copyright conventions and decided to play by the same rules. When they do, the principle of reciprocity means they get the same treatment in other countries. Reciprocity also stops countries who don’t step up, like the USA, from gaming the international copyright system. This is what encourages everyone to raise their level of protection. 

The European Commission is aware of the problem and has spent the last two and a half years consulting and studying the impact of the RAAP decision. It even indicated how it would fix the anomaly. So far so good, but still no proposal in sight, despite the court itself saying legislation could fix this. 

More head-scratching and pencil sharpening is not needed. It is time to clarify the meaning of the original legislation to reflect the basic principles of international copyright as relied upon by both member states and collection societies for decades.  That means confirming the principle of reciprocity across the EU, while also accommodating member states with a different approach (such as paying third party countries under the national treatment principle, without reciprocity in return). 

IMPALA’s Helen Smith continued: “Europe uses harmonisation with carve outs in many areas, let’s see it here. It’s a perfectly proportionate response to what is a huge anomaly. More delay (or worse, inaction) is not a solution. The current situation simply creates uncertainty for everyone: artists, record labels, collection societies, venue operators, broadcasters, shops and ultimately of course, music fans and diversity.” 

Helen Smith concluded: “Let’s make no mistake, inaction is not neutral. It is equivalent to an active policy decision to let an anomaly become law, adopting the principle of national treatment with no legislative process and despite the court making it clear that the EU can fix this. We are sleep-walking our way into a financial and cultural disaster for the thousands of small European music companies and their artists who account for 80% of all new releases in Europe today.”