The Competition Appeal Tribunal (CAT) has dismissed an effort to initiate collective proceedings against the Performing Rights Society (PRS), ruling that the lawsuit concerning black box royalties should be struck out. In a unanimous ruling on 27 August, the Tribunal found that the claim lacked a reasonable cause of action and therefore refused to certify it.
PRS collects royalties for public performances of musical works for its 175,000 members, primarily songwriters and publishers, with writers comprising the majority. Royalties are typically split equally between writers and publishers, but disputes can occur when the rightful recipient is unclear. In such cases, these unclaimed amounts, called black box royalties, are sometimes distributed proportionally among the PRS members.
The case centered on whether PRS, the UK’s collective management organization for music copyright, had unfairly allocated unidentified – or black box – royalties to publishers instead of songwriters. The proposed class representative (PCR), songwriter and Blur drummer Dave Rowntree, requested an opt-out collective proceedings order under the Competition Act 1998. He claimed that PRS’s distribution policies involved unfair trading terms that favored publishers and violated competition law.
The Tribunal dismissed those claims, stating that the claim “fails as a matter of law” and that no credible method for measuring damages had been presented: “The application for summary judgment and to strike out the claim succeeds, and we refuse to certify the claims as eligible for inclusion in collective proceedings,” he ruled.
Regarding proportionality, the Tribunal highlighted an unusual situation: “The central problem is that the class is, in a manner of speaking, suing itself,” noting that, since PRS is a not-for-profit organization owned by its members, any damages or costs would effectively be paid by both songwriters and publishers.
