Brazil's Music Collection Societies Convicted Of Price Fixing

from the protecting-artists? dept

Almost exactly a year ago we wrote about how Brazil's performance rights organization, ECAD (which is the trade association for the Brazilian equivalents of ASCAP, BMI and SESAC), was trying to shake down anyone who embedded a YouTube video, even though ECAD already had an agreement with YouTube. Basically, they were trying to collect twice for the same thing. Around that time, it also was revealed that ECAD's directors were under investigation for providing no information on how it collects or distributes revenue... and then granting its directors huge bonuses.

Now, it appears those were the least of ECAD's problems, because (as reader Ninja passes along), ECAD and the six music licensing agencies that make up its members have been convicted of being an illegal cartel engaged in price fixing, and told to pay $38 million in fines. The fine is clear that they cannot use money collected for artists to pay this fine.

The details sound like a classic case of price fixing. The leadership of the different organizations would get together in a room and agree to set rates. Investigators even found the pricing tables shared among the organizations. It also didn't help matters that ECAD had not allowed another organization to join ECAD in 30 years. That spoke to it being a bit of a cartel. ECAD claims it's going to appeal the decision, but having direct pricing tables shared among different organizations is a tough thing to overcome.

ECAD has also been given six months to basically reorganize its entire performance rights/collections set up so that it's not illegal, leaving some to wonder how the entire industry may change. This is one of the reasons why we're less than enthusiastic about efforts that seek to expand the power of organizations like this. Over and over again we see such collections efforts abused, such that artists aren't actually being helped, but harmed.

Filed Under: anti-trust, brazil, cartel, price fixing
Companies: ecad