How do you listen to music on the Internet? From what it seems, services that use streaming technology are here to stay. Since it became much easier to download an album than to buy it in a store, we went through various moments with the increase in the number of people connected and the quality of these connections. In 2015, 46% of all music industry’s profits (record companies and labels) came from digital platforms such as Spotify, Deezer, and Youtube. The ascension of these models places an important question: how should be charged the copyright of authors and singers of songs we hear on the Internet?

The question is essential for very different stakeholders of the “music chain”: from Spotifies to record companies, from authors of old songs to new bands that just released their first EP — everyone is interested in knowing how they will be paid in this new arrangement. And evidently, different arrangements can have different consequences to the final price that the consumer will pay to listen to music.

In Brazil, the musical issue goes through Ecad, the entity that gathers associations of copyright and related rights owners. Now under state supervision, Ecad — representative of a “collective administration” system — has the competence of collecting the due copyrights for situations of public execution of songs. In the analog world, the story goes like this: when the song is played on the radio (or television, parties, shows, etc), the player (in this case the radio) should pay the rights to Ecad; when you listen to a song at home after buying the artist’s CD, no. In this case, the rights were paid directly to the companies that represent the authors in the act of buying, without going through Ecad.

And on the Internet, what would a “public execution” be? The Brazilian Copyright Law, made in 1998 does not bring an easy answer. It establishes that “public execution is considered the use of musical or literary-musical compositions, upon the participation of artists, remunerated or not, or the use of phonograms and audiovisual works, in places of collective frequency”. But later, it says: “Places of collective frequency are considered theaters, cinemas, ballrooms, clubs, bars or associations of any nature, stores, commercial and industrial establishments, stadiums, circuses, fairs, restaurants, hotels, motels, clinics, hospitals, public bodies of direct or indirect administration, foundational or statal, transportation of passengers through terrestrial, maritime, fluvial or aerial means, or wherever literary, artistic or scientific works are presented, executed, or transmitted”.

The judiciary hasn’t yet settled in a unanimous interpretation of the law in the case of the usages on the Internet. This week, the Rio de Janeiro Court of Justice analyzed Ecad’s appeal in a process filed against Terra (owner of a streaming service called Sonora). On one side, Ecad argued that it could charge Terra the values related to copyright because, in its interpretation, the Internet would be a place of collective frequency; on the other, Terra argued that the execution is not public, but individualized, because it starts from the choice of each user and their use of the streaming service. In the trial, the Court gave the reason to Terra, affirming that “the ‘streaming’ service adopted by the defendant party does not configure a public execution, once the content one wants to hear is selected by the user, an individual transmission will begin and the execution of the music work will be restricted to only that user’s location”. Indeed, the Rio de Janeiro Court and some other countries have been deciding this way.

Meanwhile, the Superior Court of Justice (STJ), a superior body that uniforms the interpretation of the law, is also in the middle of the trial of a case of copyright collection on the Internet — at stake, distinct digital services like online radios that do “simulcasting”, that is, play on the Internet an AM or FM programming, radios that only exist online, and services in which the user can choose what to listen at each time, like YouTube or Spotify. Even though the case in the STJ is about a radio doing simulcasting (the late Oi FM Radio), it is possible that the court ends up deciding about digital streaming services in general. In this action, two ministers have already decided, understanding that Ecad has the prerogative of charging in all modalities — the case is stuck since a third judge asked to review it in June.

In the beginning of 2016, the Federal Government tried, via the Ministry of Culture, to create rules that would solve the controversy. The Ministry, which supervises Ecad since 2013, opened a process of public debate about a proposal for “normative instruction” that, in short, made the entity’s collection possible, but regulated according to a series of rules. Made in a moment of a troubled national political crisis, the consultation was followed by InternetLab, that reported its overtaking by a flood of manifestations against the government. With the exception of a few debaters representing the interested sectors, the overwhelming majority of the participants brought imprecise positionings (like that Ecad’s collection would be a “fee”) or generically against any initiative by the government of the then president Dilma Rousseff. Before her suspension, in June, Rousseff made this rule a proposition, but her departure once again led the topic to uncertainty — especially because the entity responsible for Ecad’s supervision and that had released the regulamentation, the Board of Intellectual Rights, ceased existing in the new organogram. The new Minister of Culture, Marcelo Calero, has not defined his public position yet.

In one way or another, that is, through Ecad or not (which would mean platforms would pay the companies that represent copyright owners and their associations or aggregations directly), there would be the distribution of copyright. At stake, different administration fees and business groups, as well as a dispute for the nationalization and (possible, given the uncertainty) supervision of the collection, which Ecad would represent. What impacts this would have on the citizen who consumes music is still something that has not well discussed by anyone.

See the full decision of the Rio de Janeiro Court of Justice here [in Portuguese].

By Dennys Antonialli, Francisco Brito Cruz and Mariana Valente

Translation: Ana Luiza Araujo