Ecorys to provide a legal and economic assessment of collective licensing with an extended effect

The European Commission has commissioned Ecorys to provide a legal and economic assessment of different national mechanisms of collective licensing with an extended effect. Ecorys will work with the Institute for Information Law to support the EC in its ongoing analysis of collective licensing in various markets.

It is a common practice that copyright holders commission other organisations to jointly administer some of their copyrights. By developing standard arrangements for deals between rights holders and users of copyright works and by setting up a single point of contact for these deals, costs associated with the number of transactions and the cost per transaction are reduced. Additionally, copyright collectives function as a kind of trade union for rights holders, offering right holders increased joint bargaining power.

One of the most challenging issues for copyright collectives is the digitization of society. It reduces the cost of providing services while also reducing the cost of creating work and copying it. It also facilitates the supply of services by for-profit firms rather than collectives of rights holders. Digital platforms — such as Spotify or YouTube — have built a business case for the provision of large-scale access to copyright-protected works. To enable these platforms to benefit from network effects, large-scale access to content is necessary, including content from rights holders that are not represented via collective licensing and content from a wide range of geographies. A case can therefore be made for collective licensing with extended effect and multi-territorial licensing.

While collective licensing with an extended effect does allow an improved business case for digital platforms, it also contains drawbacks. One drawback of collective administration is that different works and rights are dealt with in roughly the same, standard way, while the wishes of rightholders may be quite heterogeneous. Collective licensing with an extended effect can make this drawback more prominent.

Ecorys and IViR kicked-off this research project in December 2019. It will run for nine months and include a survey, stakeholder consultations and case studies. For more information, please contact David Regeczi or Roel Peeters.