On 2 September 2024, the Andean Court of Justice issued Prejudicial Interpretation (PI) 227-IP-2023, which clarifies the potential abuse of dominant position by collecting management organizations (CMOs). CMOs are responsible for, among others. monitoring, licensing, and collecting royalties for their clients. PIs are binding opinions on issues of Andean law that the ACJ issues within judicial actions before Andean Member countries (Colombia, Peru, Ecuador and Bolivia) in an effort to harmonize the application of Andean law.
This PI indicates that discriminatory practices by these organizations, such as setting different rates for similarly situated cable operators, may constitute an abuse of dominant position. According to the ruling, such practices violate competition principles when they are not objectively justified and affect market players in comparable situations.
The PI emphasizes the importance of applying equality criteria when setting rates and commercial conditions, pointing out that the use of discriminatory ones without legitimate grounds can restrict competition. Furthermore, the ACJ stressed that while CMOs play a vital role in protecting copyright, they should not misuse their market power to unfairly affect other competitors.
This interpretation has significant implications for competition law in the Andean Community as it clarifies how abuse of a dominant position can manifest in sensitive sectors such as collective rights management. The Court urges national authorities to carefully assess cases of abuse, considering the potential impact on competition and the market.
