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Invoicing licence fees for background music and TV reception in businesses as of 2019

Businesses that play background music on their premises or show broadcasts on screens are required to pay licence fees in accordance with Common Tariff 3a. As of 2019, SUISA will once again manage all customers under this Tariff directly. Text by Martin Korrodi

Invoicing licence fees for background music and TV reception in businesses as of 2019

Under copyright law, playing background music in a shopping centre like in the above example qualifies as a use outside the private sphere. That is why businesses need a licence, which they can obtain from SUISA in accordance with Common Tariff 3a. (Photo: Unsplash, Victor Xok)

Pursuant to the Federal Copyright Act (Article 10(2)(f)), the reception of broadcasts in businesses is a use outside the private sphere and is therefore subject to a licence. As a result, in addition to paying Billag reception fees – and conversely to private households – businesses which play radio or TV sets on their premises need to licence the authors’ rights under Common Tariff 3a (CT 3a). These licences are granted by SUISA.

Hitherto, Billag AG would invoice the licence fees under CT 3a for SUISA’s account. Since Billag was also responsible for invoicing radio and TV reception fees, the cooperation generated advantageous synergies. Both invoices could be issued to customers from a single source, saving time and effort on all sides.

Meanwhile, owing to a number of developments, this cooperation cannot be continued after the end of this year: thus in 2015, the Federal Act on Radio and Television was revised and the device-based reception fee was replaced by a general levy. This levy is collected from all households – regardless whether or not they actually possess a reception device.

Uses outside the private sphere are subject to licence fees

Under the new system, only businesses with turnover in excess of CHF 500,000 have to pay the licence fee. The State estimates that about 75% of Swiss businesses will not be required to pay the licence fee even if they receive broadcasts on their premises.

The minimum turnover limit does not, however, apply to authors’ rights. All uses of works outside the private sphere are relevant in terms of copyright law. In public areas like shops and restaurants, for example, background music – whether piped in from the radio, internet or a sound recording – is subject to a fee in accordance with CT 3a. And the showing of broadcasts or videoclips, from Youtube for example, also requires a licence from SUISA. Accordingly, many small businesses that do not pay radio and TV fees will still have to pay fees under CT 3a.

In addition to the change in the radio and TV remuneration system, in March 2017 the Federal Office of Communications (OFCOM) decided not to renew Billag’s collection agency mandate. Henceforth, household radio and TV fees will be collected by Serafe AG. For businesses, the fees will be collected by the Federal tax authorities in the framework of the VAT collection procedure. As a result, Billag has lost its main business activity and will wind up operations at the end of 2018. This is another reason why SUISA is obliged to reorganise its CT 3a-invoicing system as of the coming year.

SUISA to manage CT 3a for businesses as of 2019

After considering a number of options, it was decided in autumn 2016 that SUISA would once again manage CT 3a for businesses starting in January 2019. SUISA already issues invoices to about 2000 companies which do not have radio and TV reception but play background music from other sources (CDs, DVDs, etc.).

As of 2019, Billag’s 106,000 business customers will be taken over by SUISA; this six-fold increase in SUISA’s active customer count – realised in a single stroke – will trigger huge growth in processing volumes. Therefore task-oriented processes and largely automated IT infrastructure solutions will be essential to ensure the smooth and proper functioning of customer relations in the CT 3a area.

The necessary steps in this regard were initiated in the current year: a project team working in close cooperation with Billag is preparing the take-over of the customer portfolio at the technical and organisational levels. A customer centre is being established with the equivalent of 12 full-time positions (17 persons overall) to provide support and guidance, in writing or by phone, to CT 3a customers.

Multilingual CT 3a customer centre

To ensure as little change as possible for customers, the customer centre will take over Billag’s existing hotline number (0844 234 234). Moreover, an online portal will be set up to secure access to all relevant services. The customer centre will cater to all users, nationwide, in four languages (English, German, French, Italian).

The new team will also be responsible for market coverage. Since there are very few spontaneous declarations from users of background music, potential customers will be contacted and questioned about their practices as regards background entertainment. SUISA plans to conduct four direct mailing campaigns per year, each designed to reach about 10,000 businesses across all economic sectors.

The customer centre team started work on 1 November 2018. By the end of the year, the team will have received appropriate training, and systems and processes will be in place and fully tested. Officially, the customer centre is to open in the new year; it will be at the disposal of 3a customers as of 7 January 2019.

Complaints procedure
The tariff for background music and TV reception, CT 3a, was negotiated with the representative user associations (Gastrosuisse, Hotelleriesuisse, the umbrella association for rights’ users DUN, the Swiss Retail Federation, inter alia) in 2015 and 2016. It proved impossible to reach a consensus, and the proposed tariff was submitted to the Federal Arbitration Commission for Copyrights and Neighbouring Rights (ESchK). The draft tariff submitted by the Swiss collecting societies proposed an average increase of 14% in the fees for Billag customers. In November 2016, the Federal Arbitration Commission decided in favour of the collecting societies and approved the proposed tariff. However, several user associations appealed the decision to the Federal Administrative Court; proceedings are still pending. The appeal does not have suspensive effect and SUISA can start collecting fees based on the new CT3a in 2019. However, the distribution of the proceeds to the entitled parties must be stayed until a definitive ruling on the tariff is handed down.
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Businesses that play background music on their premises or show broadcasts on screens are required to pay licence fees in accordance with Common Tariff 3a. As of 2019, SUISA will once again manage all customers under this Tariff directly. Text by Martin Korrodi

Invoicing licence fees for background music and TV reception in businesses as of 2019

Under copyright law, playing background music in a shopping centre like in the above example qualifies as a use outside the private sphere. That is why businesses need a licence, which they can obtain from SUISA in accordance with Common Tariff 3a. (Photo: Unsplash, Victor Xok)

Pursuant to the Federal Copyright Act (Article 10(2)(f)), the reception of broadcasts in businesses is a use outside the private sphere and is therefore subject to a licence. As a result, in addition to paying Billag reception fees – and conversely to private households...read more