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Hospitality wins court fight over music fee hike

21 November 2008 by

The hospitality industry could save millions of pounds after the High Court agreed that massively increased charges for playing background music, introduced in 2005, were disproportionate and unreasonable.

Phongraphic Performance Limited (PPL), which sets, administers and collects the fees for playing music, introduced new fees on 1 January 2005, which increased background music charges by between 200% and 400% for pubs, hotels and restaurants.

The industry estimates that as a consequence of the increase, the average pub and restaurant has paid an additional £500 - £600 over the last four years, a total of at least £12m.

Both the British Beer & Pub Association (BBPA) and the British Hospitality Association (BHA) launched an immediate action, believing the increase to be disproportionate and unreasonable.

They argued that PPL had failed to follow the correct process for setting the fees increase. The case was referred to the Copyright Tribunal by the then Trade Secretary Alan Johnson, in October 2005.

The appeal was taken against the decision of the Copyright Tribunal on the value of the fees that have to be paid for playing background recorded music. PPL had attempted to limit the Copyright Tribunal's jurisdiction to broadcast music only and have a separate Tribunal for non-broadcast music.

The judge in the appeal, Mr Justice Kitchen, in giving his ruling, stated this to be "inconvenient, cumbersome, expensive, and involve a waste of judicial and public resources". He also ruled it to be a misinterpretation of the Act.

The court ruled that the Copyright Tribunal does have powers under the Copyright, Designs and Patents Act 1988 to set the value of both broadcast and non-broadcast music in one tariff.

BBPA chief executive, Rob Hayward, said: "This is a victory for common sense in an extremely complex area of law.

"We now look forward to going back to the Copyright Tribunal, where we will do our utmost to secure a reduction in the fees which will give much needed financial relief to those licensees who are currently paying PPL well over the odds for music in their pubs."

Government opposes PPL plans to increase fees >>

Restaurateur pays a high price for playing unlicensed music >>

Licensing reform boosting live music in pubs a year on >>

Don't let music replace a good atmosphere >>

By Daniel Thomas

E-mail your comments to Daniel Thomas here.

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