Brazilian collection society under scrutiny

Microphone with money bag | photo by Talaj @ iStockphotoThe Brazilian music public performance collection society – ECAD – is under heavy fire. In June, 2011 a Congressional Investigation at the Brazilian Senate was triggered to investigate several alleged frauds by ECAD. The investigation started after several complaints regarding ECAD’s lack of transparency, excessive collection and lack of criteria to determine and distribute the collected amounts. One of the complaints, for example, said that an employee of one of the associations that form ECAD (there are 9 in total) used the name of a bus driver to receive more than US$ 75,000.00 due to songwriters and performers.

As a result of the 10-month investigation, with several hearings and the collection of a vast amount of documents, a 350-page report, with more than 3 thousand exhibits was produced. It is a lot to read and to digest. By the end of the day, though, the document requests the indictment of 15 people who are – or were – part of ECAD and of the associations that form ECAD for a number of different crimes, such as misappropriation of funds, auditing fraud, formation of cartel and unjust enrichment.

As a quick background, ECAD is the Brazilian private central office responsible for the collection of royalties related to any and all public performance of music in Brazil. It grants a blanket license of behalf of all the composers, interpreters and owners of phonograms for music to be played in radio stations, TV channels, theaters, bars, restaurants, carnival parades, weddings and children’s parties. The list goes on and on. ECAD collects fees for both copyrights and neighboring rights and distributes them to each of the 9 member associations which, on their turn, distribute to the authors, interpreters and owners of phonograms. Or, at least, this is how it works in theory, say the detractors of ECAD.

For them, ECAD is a monopolistic entity with shady practices that have absolute power over a lot of money which never reaches the entire spectrum of authors and interpreters who should receive it. Last year alone, ECAD collected, approximately, 310 million dollars. For the detractors of the entity, ECAD is a necessary evil that must, however, be strongly controlled by a governmental entity.

Just so you can have an idea, whenever someone utters the word copyright in Brazil, the immediate thought that comes to the mind of a layman is ECAD. It is as though ECAD is the center of the copyright universe and that everything has to do with the entity. One of the reasons – if not THE reason – the Brazilian Copyright Act is being revised in its entirety is ECAD.

There are obvious clashing forces behind all this. On one hand, there are some authors and interpreters who genuinely feel that the way ECAD distributes the collected amounts is far from ideal and, therefore, it must be overseen by a unbiased entity that would sit above ECAD. On the other hand, there are many companies that want to reduce how much they pay to ECAD. These opposing forces cannot be reconciled because if the second wins, it will necessarily mean less money to be collected and even less to be distributed. Therefore, ECAD sits in a very difficult position.

I am not saying that ECAD is an angel. Not by a long shot. I do not have all the elements to make a proper judgment – and there is a Congressional Investigation for that – but it would not hurt ECAD if it were as transparent as possible. Not everything is readily accessible on ECAD’s website. For example, in order to obtain the minutes of the meetings among the associations, you have to go to the Registry of Titles and Deeds and pay to get copies. I know, I know. They are available. But going to the Registry in the Internet age is at a minimum very cumbersome.

In any event, ECAD vehemently denied these accusations in a pronouncement issued just last week, after the report was voted.

But I digress. The fact is that the discussion around ECAD – and I will always grant ECAD the benefit of doubt, especially because the Congressional Commissions, by themselves, are something I do not usually trust and I am not alone in that – muddles the copyright waters and I am happy at any opportunity I have to say out loud that ECAD is not the embodiment of copyright.

And the report does exactly that in a topsy-turvy way.

One of the suggestions that the report does is that all the discussions involving ECAD should shift from the Ministry of Culture to the Ministry of Justice. The justification behind this suggestion is that the Ministry of Culture has an operational budget that is lower than the amount collected by ECAD last year so that ECAD cannot be under the jurisdiction of an “economically inferior” governmental entity. While this explanation does not convince me, I really like the conclusion. If there must be governmental supervision over everything ECAD does – oh, how I doubt this will make collection and distribution any more transparent! – then it would be better that it be done by an entity not related to copyright. In addition to that, the Ministry of Justice also has jurisdiction over the Consumer Protection divisions and the Antitrust Authority (CADE, not ECAD) so that it really makes sense to transfer this supposedly big problem to another roof so to speak.

Another suggestion I love from the report is that there must be a piece of legislation specifically addressing ECAD, separate from the Copyright Act. Up until now, this task fell exclusively in the hands of the Copyright Act so much so that the pre-draft bill of Copyright Act has very long suggestions of changes regarding ECAD that, again, makes it difficult to discuss copyright without tumbling over discussions about ECAD. I would really welcome a piece of legislation emanating from the Ministry of Justice, not the Ministry of Culture, dealing with that. It will make the discussions involving the rest of the Copyright Act so much less passionate – and, therefore, more professional – that I almost can’t believe this was actually proposed in the report.

I will probably return to this issue once I have been able to properly digest the report. Until then, stay tuned!

Attilio Gorini

1 Comment

Filed under Brazilian Copyright Act, Brazilian Copyright Law, Brazilian cultural policy, Copyright in Brazil, Copyright Law, Entertainment Law Brazil

One response to “Brazilian collection society under scrutiny

  1. Muito bom, Attilio! No ponto.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s