Copyright, EU Court of Justice rejects 'Italian-style' liberalisation

The EU Court of Justice "rejects" Italy's transposition of the Barnier Directive on the liberalisation of the copyright market: commercial companies, not just non-profit organisations, must also be able to operate freely as collecting societies. The Italian legislator had taken away Siae's exclusivity, but obliged private collecting societies, such as Soundreef, to identify non-profit companies, such as Lea, to act as a 'screen'. It was precisely from a lawsuit brought by Soundreef against Jamendo, a Luxembourg-based marketplace platform for copyright, that the Court of Justice of the European Union case was born.

It is as if the European Court was turning back the clocks to before 2017, when a daily battle between the former monopolist of copyright management, namely Siae, and Soundreef, the startup founded by Roman entrepreneur Davide D'Atri, was taking place in the media. A lot of water has passed under the bridge: suffice it to think that publicly representing Soundreef was Fedez who, after all this time, has retraced his steps and now collaborates with Siae. Yet here we are again.

The origin of the dispute between Lea, an association emanating from Soundreef, and Jamendo is the Law 35/2017 that, immediately after the liberalisation of the copyright market in Italy, established the 'rules of the game' for players in the sector. Among the rules introduced was the sending of a communication to Agcom, a kind of 'Scia' with which the collecting society alerts the Communications Authority of the start of its activity. Lea, a non-profit company emanating from Soundreef, had complied with these obligations. Jamendo, which had just arrived on the Italian market, had not: this is why Soundreef's association is suing it. The Court of Rome, however, rather than ruling, realised that the positions expressed by the lawyers of the two companies were curiously similar: the real issue, according to the Capitoline judges, lay in how the transposition of the Barnier Directive took place in Italy and, for this reason, decided to send all the papers to the EU Court of Justice.

Thus begins, before the judges in Luxembourg, Case C-10/22 and its outcome is surprising: the judgment of 21 March 2024 in fact emphasises that Italian national legislation, insofar as it does not allow independent management entities established in another Member State to provide their copyright management services in Italy, constitutes a restriction on the freedom to provide services.

Soundreef, assisted by Studio Legale E-Lex, with partners Giovanni Maria Riccio and Adriana Peduto, as well as lawyer Dario Malandrino, rejoices: "This ruling," says founder Davide D'Atri, "finally opens up the Italian copyright market. Italy's transposition of the Barnier Directive, first with the preservation of Siae exclusivity and then with the possibility to operate granted only to non-profit entities, clearly did not comply with EU rules. The European Court has caught this inconsistency". Jamendo, with attorneys Mattia Dalla Costa and Alessia Ferraro of Cba, emphasises that the ruling, "in addition to guaranteeing full freedom of choice for authors and musicians as to who should be entrusted with the intermediation of their rights, finally sanctions the full liberalisation of the music intermediation market, revolutionising the regulatory framework not only in Italy, but also in Europe.