CJEU rules against Italian legislation excluding copyright collective societies

On 21 March, in case C-10/22, the Court of Justice of the European Union addressed the issue of to copyright intermediary activities, in particular with regard to the exclusion of independent collecting societies from carrying out its activity in a Member State.

The parties involved in this case are Liberi editori e autori (LEA) and Jamendo SA. LEA is an Italian collective management organisation. On the other hand, Jamendo SA, based in Luxembourg, acts as an independent collecting society. Since 2004, when it entered the Italian market, it has been exclusively licensing musical works for use as background music in various scenarios.

The dispute stems from an action brought by the LEA before the District Court of Rome to stop Jamendo's copyright intermediation activities in the country.

According to Article 180 of Italian Law 633 on copyright on the protection of copyright and related rights, this activity is reserved exclusively for the Italian Society of Authors and Publishers and listed collective management organisations such as LEA, excluding independent entities in the sector. In its defence, Jamendo argued that Italy had incorrectly transposed Directive 2014/26, which establishes rules for the collective management of copyright and related rights in the European Union to promote transparency, competition and the protection of the interests of right-holders and users of protected works.

The Italian court decided to suspend the proceedings and to refer the matter to the Court of Justice of the European Union. The District Court of Rome asked the Court of Justice whether the Directive on collective management of copyright precludes legislation of a Member State which excludes the possibility for independent management companies established in another Member State to provide their services in that first Member State.

In order to determine whether the Italian approach was appropriate to achieve the public interest objective of copyright protection, the Court focused its arguments on Article 56 of the Treaty on the Functioning of the European Union (TFEU), which guarantees the freedom to provide services in the European single market, and the proportionality of the restriction

The Court held that the national law in question, which prevents independent management companies from another EU country from offering their copyright management services in Italy, restricts the freedom to provide services and is therefore contrary to Article 56. Although that restriction may be justified by the objective of protecting intellectual property rights, it is disproportionate because it completely excludes any independent management company from another EU Member State from operating on the relevant market. The Court therefore concluded that the Italian legislation in question is contrary to EU law.