Korean Royalty Collecting Society Fined For Acting Like Racketeering Thugs
Copyright royalty collection societies don't exactly have a stellar reputation for operating on the ethical up and up. Our pages are filled with these collection societies pulling all sorts of bullshit. Some of my favorites are things like when one society insisted on collecting royalties from a bar that was shut down due to COVID, all the stories about these groups failing to pay artists what they're supposed to, or the collection society that wanted children to pay up for playing music at high school graduation parties.
The point is that actions like this and others make it really tempting to compare these collection societies to organized crime rings skirting all kinds of rules to engage in what sure looks and feels like a shakedown of private citizens and businesses. But as the government of Korea recently uncovered, there are shakedowns, and then there are shakedowns.
Korea's antitrust regulator on Wednesday slapped a fine of 340 million won ($266,000) on a major music copyright association for abusing its market dominance by overcharging broadcasters and hindering the competition.
The measure on the Korea Music Copyright Association (KMCA) came as it charged excessively high fees on the country's 59 broadcasters, disrupting its rivals' business as well, the Fair Trade Commission (FTC) said.
So what did KMCA do that led to a six-figure fine? Well, keep in mind that collection societies are like Sith Lords: there's never only one of them. And because of that, royalties collected from broadcasters and others are typically split with other collection societies. For instance, one might be for public performances of music, while another covers the songwriters themselves. In Korea, the composers collection society is the Korean Society of Composers, Authors, and Publishers, or KOSCAP. KMCA was supposed to be taking a ratio percentage of the royalties it was collecting. Instead it, well...
The KMCA, however, demanded broadcasters pay fees under its arbitrarily-set ratio ranging from 92 percent to 100 percent.
The FTC also said that the KMCA exerted pressure on broadcasters, threatening to ban the use of its music if they failed to comply with its demands.
If that doesn't sound like a shady shakedown to you, then you don't know what a shakedown looks like. And, while my cheeks will remain dry over the other collection societies not getting their fair share" out of these broadcasters in Korea, it is nice to see a government slap one around a bit that's behaving particularly poorly.