Copyright Tribunal Rules That PPL Licence Fees Are Unfair
The Copyright Tribunal has ruled in favour of licence holders in a case brought by various representative bodies against the Phonographic Performance Limited (PPL).
PPL is the body that grants licences to businesses who wish to play music within the publicly accessed areas of their premises, including background music for pubs, bars restaurants and retail stores. This money is then funnelled through PPL to the performers and record companies whose music is played.
By way of some background, PPL restructured their licence fee tariffs in 2005, which resulted in a massive increase in the fee prices, up to 400% in the case of some large restaurants. As a result of pressure brought by affected business owners through the British Hospitality Association, British Beer and Pub Association and the British Retail Consortium, a case against the PPL was brought. The case was based around the fact that the tariffs were "unfair". Their argument was based on the fact that the increase did not reflect any increase in what was provided to licence holders, cover additional costs or keep up with inflation. The Copyright Tribunal, which has the power to either confirm or vary the licence arrangements, including the fees, agreed that the increases were unfair and substituted their own tariffs, dictating what licensees should be paying. They allowed a certain level of increase to cover inflation and some changes to the rights offered by PPL, in particular the new broadcasting right for sound recordings.
Unusually, the changes are retrospective. This means that licensees who purchased their licence under one of the amended tariffs since 2005 may have the right to make a claim for the difference between the fees they paid and the amended fee. In order to prevent PPL being deluged with claims for miniscule amounts of money, the Tribunal have specified that only licensees who are owed over £50 (excluding VAT) in total can apply for repayment. Groups of licensees can count together towards that total if they are under common ownership.
All licensees who obtained licences under the amended tariffs will be sent a letter by PPL advising them that they may be entitled to claim and sending them a claim form by which to do so. They are also required to calculate the repayment due to licensees if they find it too difficult to do the calculation themselves. The Tribunal has also set strict time limits on PPL's payment of the claims.
Early indications are that the decision is set to affect nearly 100,000 premises with PPL licences and that there could be some £15-20 million worth of refunds due to licensees. However, while this is a major win for large operators who have considerable numbers of premises, the amounts due to smaller licence holders will be much smaller and many may not feel that it is worth them claiming, even if they exceed the £50 threshold. That said, no one will be able to make any claims until the outcome of an appeal from the PPL, which they are understood to have filed to the High Court. Such an appeal is likely to be heard in the New Year.
Published - December 2009
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