Meta Hits a Sour Note in Italy

EXTRA Facebook-parent Meta last month suddenly began removing music by Italian songwriters from its various platforms, after failing to renew is licensing agreement with the Italian Society of Authors and Publishers (SIAE), the main collecting society for Italian writers and publishers. This month, the Italian Competition Authority (AGCM) launched an investigation into Meta’s handling of those negotiations. According to AGCM, Meta “could have unduly interrupted the negotiations for licensing the use, on its platforms, of musical rights thus abusing SIAE’s economic dependence.”

Somewhat more colloquially, SIAE said it rejected a “take it or leave it” offer from Meta that lacked “any transparent and shared evaluation of the actual value of the repertoire.”

Merits of the case aside, it’s another example of a dispute between platforms and rights owners being construed as a question of competition law rather than simply a matter of copyright and licensing. And it goes directly to the issues of asymmetric bargaining power and value capture.

As AGCM put it in announcing the investigation, “Meta could have exploited its bargaining advantages by requesting SIAE to accept an unfair economic offer without providing to SIAE the relevant information to assess the economic fairness of the offer… The Authority believes that Meta’s alleged abuse of economic dependence could also have a significant impact on competition in the affected markets and cause great harm to consumers.”

As discussed here before, business dealings between the creative industries and other commercial sectors historically have been analyzed by courts and regulators through the lens of copyright and droit d’auteur. Increasingly, however, they are being scrutinized from the perspective of ordinary competition law and their effect on consumers (see here, here and here).

Authors and rights owners, understandably, have tended to favor the historic approach, viewing their statutorily defined exclusive rights as their primary source of leverage. But in the digital environment, where those nominally exclusive rights have become more difficult to effectively enforce, much of that leverage, has, as a practical matter, been eroded. Reframing the issue as a question of fair or unfair competition, rather than copyright, is in rights owners’ interest.

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