ACCC conditionally approves APRA’s licensing arrangements

Competition watchdog the Australian Competition and Consumer Commission (ACCC) has agreed to allow the Australasian Performing Right Association (APRA) to maintain its licensing arrangements for another three years.

But, acknowledging that APRA has a “virtual monopoly” – it administers the performance rights of almost all music in Australia – the ACCC has also demanded in a draft decision that it make some changes first.

APRA has to apply every three years, so the watchdog can review if the way it does business is for the public good, or detriment. It usually gives it the nod, but often included conditions. In the past APRA had to streamline its royalty process and offer alternatives to its “blanket licence”.

In 2013, the ACCC has acknowledged that despite criticisms, the “public benefit test has been met.”

Earlier this year when APRA applied for further authorisation, the ACCC invited submissions from other parties. As in the past, music venues, festival promoters and trade associations were among those who responded, some with anger that APRA was hiking up fees to source revenue for its members.

Among the concerns raised were that APRA’s fees are many times more than what similar overseas organisations charge, a lack of transparency on how its monies were collected and distributed, the difficulty in understanding its licensing system, its “take it or leave it” approach, and the limited scope in challenging APRA’s decisions.

The ACCC has demanded APRA supply a “plain English guide” to its licensing systems and improve its dispute resolution. It wants APRA to educate users on its “licence back” and “opt out” facilities so they can make direct licensing arrangements with users of their work. It made it clear that these conditions particularly benefit small businesses in their dealings with the association.

“The ACCC accepts that APRA’s arrangements provide users with transaction cost savings by providing instantaneous access to APRA’s entire repertoire. The exclusivity of APRA’s arrangements also results in enforcement and monitoring efficiencies,” ACCC Commissioner Dr. Jill Walker said. “On the other hand, as a virtual monopoly, APRA has significant market power in relation to its dealings with users and its arrangements can also create inefficiencies for its members.”

The ACCC is now seeking submissions on this draft decision, including on the conditions, before making its final decision.