The Tokyo High Court has canceled a Fair Trade Commission order that favored music copyright management group JASRAC, in response to a petition filed by a rival entity.
The copyright fee-collection system of the Japanese Society for Rights of Authors, Composers and Publishers “blocks the activities of other entities and new entrants” into the industry, presiding Judge Toshiaki Iimura ruled Friday.
It is the first such legal judgment handed down on an FTC decision, sources at the commission said.
In June last year, the FTC withdrew a cease and desist order it had issued against JASRAC in February 2009 over its alleged violation of the Anti-monopoly Law. Under JASRAC rules, broadcasters have to make certain levels of copyright payments regardless of how many times they use copyrighted music.
The withdrawal of the order by the watchdog, following a JASRAC petition in April 2009, was the first such decision reached through a FTC hearing in 18 years.
On Friday, the judge said the flat-rate charges levied by JASRAC disincentivize broadcasters from using music managed by other copyright management groups because it helps clients cut costs. The ruling was issued in response to a petition by copyright rival e-License Inc.
JASRAC’s fee-collection system “has made it extremely difficult for e-License to continue in business and (others) to enter the market,” Iimura added, concluding that the FTC decision to withdraw the cease and desist order was mistaken.
Another key issue in the trial was whether e-License, which was not a party to the FTC hearing, was qualified to seek the invalidation of the watchdog’s 2009 decision. The high court ruled that e-License has sufficient grounds to challenge it.