Five interesting things you might not have spotted about Case C-351/12, OSA (aka the ‘Czech Spa’ case)

By Osman Zafar

The competition law points of interest are highlighted below, but it’s worth beginning with the usual summary of facts. A Czech spa provided guests with music, but without having entered into a licence with the Czech collecting society, OSA. In response to the OSA’s claims for royalties, the spa claimed (among other things) that OSA was abusing its dominant position because the royalties charged were disproportionately high compared with those charged by collecting societies in neighbouring countries. In light of its international clientele, it also claimed that this affected its ability to compete with other spas in neighbouring countries, thereby restricting its freedom to provide services. The Czech Regional Court referred a number of questions to the Court of Justice of the European Union (CJEU), the third being of most relevance to competition law.

‘Must article 56 [TFEU] et seq. and article 102 [TFEU] […] be interpreted as precluding the application of rules of national law that reserve the exercise of collective management of copyright in the territory of the [member] state to only a single [monopoly] … collecting society and thereby do not allow recipients of services a free choice of a collecting society from another [member] state of the European Union?’

Given that the court’s analysis on the freedom to provide services (article 56) dovetails with some of the earlier competition law cases concerning music copyright, it’s worth a few words on this before looking at the article 102 analysis…

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