A demand from European Union lawmakers to regulate how authors and composers receive cash for downloaded works has been rejected by the bloc's executive arm.
EU Internal Market Commissioner Charlie McCreevy said in remarks to the European Parliament on Wednesday evening that more time was needed for his two-year-old voluntary guidelines on cross-border management of music rights to work.
The guidelines seek to spur cross-border competition in the sector so that authors and composers have a choice of collecting societies that gather royalties on behalf of artists.
Users of music, such as Web-based radio and Apple's iTunes stores, would also benefit from a one-stop shop to apply for a pan-European license rather than the costly process of applying in each EU state for one.
The EU assembly's legal affairs committee asked on Wednesday evening for McCreevy to present as soon as possible a proposal for a framework directive, or mandatory rules.
It also asked McCreevy to make it clear that the 2005 recommendation applied only to online sales of music.
McCreevy has been consulting societies, authors, composers and music users about how the guidelines are working.
The submissions analyzed so far show that most stakeholders do not see the need for a framework directive and prefer market-based solutions over regulatory intervention, he said in remarks delivered by EU Fisheries Commissioner Joe Borg.
To conclude, while the online market for music is still in flux, legislating in favor of a particular licensing model would appear premature, the statement said.
McCreevy also said the guidelines, known formally as the Music Online Recommendation, should not be limited to online music sales but apply to all activities of collecting societies.
Parliament has attacked McCreevy's soft law approach, aggrieved that he has bypassed the assembly as a directive would need its approval while guidelines do not.
Music rights groups were relieved, however.
I hope that in 2008 we will see it all falling into place for commercial users and rights holders, said Florian Koempel, legal counsel at British Music Rights.
I would argue that McCreevy is right to say we need more time, Koempel said.