Regulatory case law, May 2015: distribution rights in protected works

This May the European Court of Justice ruled on competition in airline takeovers, as well as on the exclusive right of authors to authorise or prohibit any form of distribution of the original of their works or of copies to the public.

Competition

T-456/10 Timab Industries and CFPR v Commission

In the case T-456/10 Timab Industries and CFPR v Commission the General Court for the first time rules on the relationship between the standard procedure and the settlement procedure, and upholds the fine of nearly 60 million EUR imposed on the applicants.

The Commission in contested decision found that the applicants, CFPR and Timab (subsidiary of ‘Roullier group’ of which CFPR is the holding company), had infringed Article 101 TFEU and, since 1 January 1994, Article 53 of the EEA Agreement by taking part, between 16 September 1993 and 10 February 2004, in a single and continuous infringement covering most of the territory of the EU Member States and of the Contracting Parties to the EEA Agreement, whose purpose was to share the European market for AFP (animal feed phosphates) through the allocation of sales quotas and customers to participants in the cartel, to coordinate prices and, to the extent necessary, conditions of sale. The Commission imposed jointly and severally on Timab and CFPR a fine of 59 850 000 EUR for that infringement.

The General Court dismisses the action and confirms the fine imposed by the Commission. It notes that, during settlement discussions, the Commission proposed a joint fine of between 41 and 44 million EUR. The fine ultimately imposed on the applicants amounts to almost 60 million EUR. The Commission applied the same method when calculating the range of fines at the stage of the settlement procedure and the amount of the fine ultimately imposed as part of the standard procedure.

The difference between the amount proposed as part of a settlement and the final amount may be explained by the fact that the Commission applied, as part of the settlement proposal, reductions that it was not required to apply as part of the standard procedure and that it took account, during the standard procedure, of new information which required it to review the file, to redefine the period taken into account and to readjust the amount of the fine. The General Court concludes that the Commission did not penalise the applicants because of its withdrawal from the settlement procedure.

The Court also notes that the Commission is not bound by the range indicated as part of the settlement procedure. The calculation of a range of fines is an instrument solely and specifically related to the settlement procedure. It is not found in the standard procedure, where the Commission must establish the liabilities of the undertakings concerned while taking account of new arguments or evidence brought to its attention.

The Commission is therefore not required to apply a range of fines falling within the scope of settlement procedure. The Commission correctly investigated the case during settlement discussions, conducted a proper analysis and assessment of the anti-competitive practices attributed to the applicants and did not err in calculating the amount of the fine.

T-511/09 and T-162/10 Niki Luftfahrt v Commission

In cases T-511/09 and T-162/10 the General Court dismisses the actions brought by the airline Niki Luftfahrt against Commission decision, by which the restructuring aid granted by Republic of Austria to Austrian Airlines as part of its takeover by Lufthansa Group was declared compatible with the common market

Niki Luftfahrt was unsuccessful in refuting the Commission’s finding that the compatibility of Lufthansa’s acquisition of Austrian Airlines with EU competition law gave rise to serious doubts only as regards the Vienna – Stuttgart, Vienna – Cologne – Bonn and Vienna – Munich services as well as the Vienna – Frankfurt (operating between Austria and Germany) and Vienna – Brussels (operating between Austria and Belgium) services.

Niki Luftfahrt was not able to show that the commitments proposed by Lufthansa and Austrian Airlines were insufficient to dispel those doubts. Those commitments aimed to reduce barriers to entry and to facilitate the entry of one or several new entrants or the expansion of competitors already operating those services, in particular, by making certain time slots available. Niki Luftfahrt was unable to show that the Commission erred in finding that the State aid granted to Austrian Airlines, which was included in the negative price to be paid by Lufthansa, was, as restructuring aid, compatible with EU law on State aid. That State aid was aimed at reducing Austrian Airlines’s indebtedness and a restructuring plan aimed at ensuring Austrian Airlines’s viability in the long-term.

 

Copyright and Information society

C-516/13 Dimensione Direct Sales and Labianca

In the case C-516/13 Dimensione Direct Sales and Labianca the Court of Justice of the European Union interpreted Article 4(1) of Directive 2001/29/EC as meaning that it allows a holder of an exclusive right to distribute a protected work to prevent an offer for sale or a targeted advertisement of the original or a copy of that work. He may prevent it even if it is not established that that advertisement gave rise to the purchase of the protected work by an EU buyer. The advertisement has to invite consumers of the Member State in which that work is protected by copyright to purchase it.

The request for a preliminary ruling concerns the interpretation of Article 4(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society (OJ 2001 L 167, p. 10). It has been made in proceedings between, on the one hand, Dimensione, a company incorporated under Italian law, and Mr Labianca and, on the other, Knoll, a company incorporated under Italian law, concerning an alleged infringement of Knoll’s exclusive distribution right resulting from offers for sale, made by Dimensione, of reproductions of furniture protected by copyright in Germany through a targeted advertising campaign directed at that Member State.

The Court notes that an exclusive right is granted to authors, in respect of the original of their works or of copies thereof, to authorise or prohibit any form of distribution to the public by sale or otherwise. Distribution to the public is characterised by a series of acts going, at the very least, from the conclusion of a contract of sale to the performance thereof by delivery to a member of the public. A trader in such circumstances bears responsibility for any act carried out by him or on his behalf giving rise to a ‘distribution to the public’ in a Member State where the goods distributed are protected by copyright.

The Court did not exclude that the acts or steps preceding the conclusion of a contract of sale may also fall within the concept of distribution and be reserved, exclusively, to the holders of copyright. For a finding of an infringement of the distribution right, is irrelevant that advertising is not followed by the transfer of ownership of the protected work or a copy thereof to the purchaser. An infringement of the distribution right can be observed where consumers located in the territory of the Member State in which that work is protected are invited, by targeted advertising, to acquire ownership of the original or a copy of that work.

Ines Grah

Ines Grah

Ines Grah, Aphaia’s guest blogger, holds a law degree in state aid and is currently writing a thesis on individuals’ access to the EU Court of Justice as part of the doctoral programme of the Faculty of Law at the University of Ljubljana.
Ines Grah

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