On February 28th, 2014, the 28 EU Member States enacted a directive regarding the collective management of copyrights and neighboring rights.

This directive harmonizes, at the European level, the rules regulating the functioning of collective management societies, and in particular the rights holders’ membership to such societies (rights holders are entitled to limit the types of works, the rights as well as the territories covered by the collective management scheme, and may elect the collective management of their choosing notwithstanding their nationalities or place of residence), the governance and transparency of such societies towards their members (obligation to communicate information), and the payment of royalties by such societies to their members (regular payments at the earliest opportunity in no event later than nine months following the end of the fiscal year).

This new legislation is also aimed at facilitating the grant of multi-territorial licenses for online use of musical works within the European Union. Each online music platform (such as Deezer or Spotify) will therefore be able to obtain a pan-European license to use a work from a single collective management society instead of having to deal with a different collective management society for each Member State.

The Member States are required to implement this directive in their national systems before April 10th, 2016. In the meantime, collective management societies in each Member States should enter into competition with respect to rights holders’ memberships and the grant of pan-European licenses.