The Competition Authority in Brazil (CADE) convicted om March 20th the country's six major collecting societies and their central office (ECAD) - responsible for the collection of music royalties for public performance in Brazil - of formation of cartel and abuse of dominant position in fixing prices. According CADE, the Ecad and its associations not only organized to abusively fix prices, but also created barriers of entry for new associations to join the entity.
All entities will have to pay a fine of R$38 million (approximately US$ 20 million) and will have to reorganize the whole collection system, both by offering arrangements beyond the "blanket license" model, the only license ECAD and their associations made available for the performance of music, and by allowing each association to compete for different prices.
The rapporteur of the Case, Elvino Mendonça, said after the conviction: "The behavior of cartel is visible. The current collection system prevents all forms of competition. ECAD and its associations abused their market power and fixed prices. The evidence is abundant."
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