Appeal Court paves way for royalties row

Roger Pearson looks at a Court of Appeal ruling that gives the all clear for a music video royalties challenge

New court moves are expected after a group of major record companies failed to re-instate a temporary block on High Court action in which they are accused of operating an illegal price-fixing cartel for music videos.

The ban was imposed in March last year, but last November the judge refused to extend it further. Now his decision has won the unanimous support of three Court of Appeal judges, paving the way for further action.

Master of the Rolls, Sir Thomas Bingham, sitting with Lords Justices Millett and Schiemann dismissed an appeal by the record companies and backed the High Court judge, Mr Justice Evans-Lombe, who in the November hearing found no grounds to extend his earlier order.

The temporary six-month order blocking action was granted to record giants BMG, EMI, Polygram, Sony and Warner in respect of an action launched by the music television channel MTV Europe over allegedly exorbitant royalties charged for their promotional videos.

In its action MTV Europe seeks declarations and damages for alleged breaches of European competition law.

MTV claims the way the big five record companies negotiate royalties through the UK collection society Video Performance and pan-European group the International Federation of the Phonographic Industry, violates articles of European law which prohibit price-fixing cartels and abuse of a dominant market position. The record companies, which produce the majority of CDs, cassettes and vinyl discs sold in the UK, deny this and sought to extend the temporary stay of action.

They claim that the European Commission before which MTV has a parallel complaint pending had shown a change of attitude to the case which would merit the further stay. And they say they should not have to fight complex and expensive disputes in two venues at once.

However, the Appeal judges held that the High Court had been entitled to reach the decision it did and to refuse to prevent the action here going on.