Judgment of the Tribunal in connection with an application for a collective proceedings order (“CPO”) on an opt-out basis brought by Mr David Alexander de Horne Rowntree (the “PCR”) against the Performing Right Society Limited, and (2) PRS for Music Limited (together, the “PRS”), pursuant to section 47B of the Competition Act 1998 (“the Act”).
The PRS collects and distributes royalties relating to the public performance of musical works in respect of which it has been assigned the “performing rights”. The proposed class consists of songwriter members of the PRS.
The PCR’s claim relates to how the PRS distributes royalties that cannot be attributed to the correct songwriter or publisher, known as “Black Box” royalties. The PRS typically pays these Black Box royalties on a pro rata basis to all relevant members.
The PCR claims that this policy for distributing Black Box royalties amounts to a breach of Chapter I and/or II of the Act, and a breach of article 101 and/or article 102 of the Treaty on the Functioning of the European Union, as these royalties are more likely to be owed to songwriters rather than other PRS members. The PCR claims, in effect, for a redistribution of Black Box royalties away from publisher members to songwriter members. The PCR claims an award for aggregate damages from this infringement.
The PRS opposed the application for a CPO, submitting that:
(1) the claim has no reasonable prospect of success, with an application being made to strike out the claim and/or for reverse summary judgment;
(2) the application does not pass the Microsoft test because the PCR failed to provide a sufficient expert methodology and failed to specify a counterfactual;
(3) the CPO application does not satisfy the cost-benefit test; and
(4) there are conflicts within the class, including with the PCR, making him unsuitable to act as a class representative.
After the PCR changed his legal representation, he applied for an adjournment of the 16 June 2025 CPO hearing. This application was refused.
The Tribunal held:
(1) The proposed class should be crafted to consist of members with individual claims under competition law. The PCR failed to do this because songwriters as a class are not “owed” Black Box royalties. The fact that one method of distribution may be considered preferable does not, in itself, mean that exercising a choice as to distribution is unfair or abusive. The applications for summary judgment and strike out thus succeed.
(2) The PCR has not identified a sufficiently credible or plausible method for assessing damages as it is prima facie unknowable what proportion of Black Box royalties are owed to songwriters or the extent to which these royalties are impacting songwriters more than publishers. The PCR thus failed to satisfy the Microsoft test.
(3) The Tribunal considers it is doubtful that the cost-benefit of the proceedings favours certification. There may also be other means within the PRS to resolve the dispute.
(4) The Tribunal considers that Mr Rowntree is suitable to act as the PCR, but this may need to be revisited depending on how, and if, the case progresses.
Accordingly, the PCR’s application for a CPO was refused.
