Italy’s competition watchdog is launching an investigation into Facebook parent Meta’s handling of licensing negotiations with the Italian Society of Authors and Publishers (SIAE).
The Italian Competition Authority or AGCM on Wednesday (April 5) said Meta “could have unduly interrupted the negotiations for licensing the use, on its platforms, of musical rights thus abusing SIAE’s economic dependence”.
SIAE is the main collecting society for tens of thousands of songwriters in Italy.
The regulator’s move comes just weeks after Meta failed to renew a deal with SIAE to license the use of the society’s repertoire on its platforms.
SIAE said it rejected a “take it or leave it” economic offer by Meta that lacked “any transparent and shared evaluation of the actual value of the repertoire”.
The society also said Meta threatened to remove the content if its offer was not accepted. SIAE claimed it told Meta that it was “[impossible] to accept the offer” as the social media giant “never shared the fundamental information necessary for a fair negotiation”.
SIAE says it didn’t accept this offer, and Meta – which has apparently had no active license for SIAE repertoire since January 1, 2023 – “suddenly and unilaterally” started to remove its content.
Italy’s antitrust regulator said Meta could have “unduly interrupted” the talks for renewing the expired contract with SIAE and could have also denied SIAE all the information needed to carry out negotiations that are in line with Italian laws.
“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,” AGCM said.
“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.”
Italian Competition Authority
The regulator says that it aims to investigate if Meta prevented the use of all musical content of songwriters represented by SIAE, stressing that the company’s alleged “abuse of economic dependence… could have a significant impact on competition in the affected markets and cause great harm to consumers.”
“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.”
Italian Competition Authority
AGCM also addressed the potential impact of Meta’s move on the audience reach of Italian authors represented by SIAE and other collecting societies whose rights are co-managed by SIAE.
Additionally, Meta’s decision to pull SIAE’s repertoire from Facebook, Instagram and other Meta-owned platforms could limit consumers’ choice, said AGCM.
They “could be deprived of the chance of using musical works whose rights SIAE represents,” AGCM added.
AGCM warned that its investigation could lead to the adoption of interim measures in line with Italy’s antitrust laws.
“The interruption of the negotiation between Meta and SIAE could in fact immediately affect competitive dynamics among parties acting as intermediaries of copyrights of musical works,” the watchdog said.
“Hence follows the need of interim measures that are supposed to ensure that the negotiating process between SIAE and Meta can restart according to the principles of good faith, transparency and equity.”
AGCM’s probe also includes Meta’s units in Ireland, the UK and Facebook Italy.
A spokesperson for Meta told Reuters on Wednesday that, “We will fully cooperate with the inquiry from the Italian Competition Authority. Protecting the copyrights of songwriters and artists is an important priority for us”.
Meta’s negotiations with SIAE comes nearly a year after the Facebook parent said it will start directly sharing a proportion of advertising revenue with music rightsholders for user-generated video content.
The move allows Meta to share revenue to record labels which it struck licensing deals with such as Universal Music Group, Warner Music Group, and Kobalt Music Publishing.
However, the new revenue-sharing model comes at a time when Meta works to pare costs. The company recently announced a fresh round of layoffs affecting 10,000 employees, in addition to the 11,000 redundancies announced in November.
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