GEMA: The Triumph of Stupidity

 "Loosely translated, a medium-sized club with 2 dance floors that has an average of 10 events per month with a cover charge of €8 would see its GEMA fees rise from €21,000 year to over €147,000 year.” Posted by Ocirats on ToytownGermany.com.

What a year it's been for Berlin's club scene. First, Klaus Wowereit pledges 1 million Euros to help clubs displaced by Mediaspree with their relocation (cue gasps of surprised delight throughout the scene). Then the government-legislated GEMA decides to raise its fees to those same clubs by a factor of 10 (cue outraged ranting throughout the scene). Now two of the city's biggest independent venues, Berghain and Watergate, are threatening to close in protest of the fee hikes (cue disbelieving snorts throughout the scene).

Just what exactly is GEMA? Ask around in Berlin’s club scene and you'll get an emotive response: “GEMA sucks.” “GEMA's bad.” “GEMA's evil.” Like so many other big political issues, GEMA has been reduced to a sentimental catchphrase, devoid of facts. But is it really is all that bad, or is the negative hype just a symptom of political illiteracy among modern music fans?

GEMA, or the Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte, is a government-appointed body charged with the collection of royalty fees for musicians, whenever their material is played in at a public music event. Organizers of everything from open mic nights to street parties and even Kindergarten classes, have been hit with GEMA invoices after playing music by artists that it allegedly represents. No artist is obligated to register with GEMA, however, unless they feel its copyright protection services are worth their while. If they do register, the agency claims that it can help them to recover more royalties than they'd do on their own. So far, so good, no? Hell, no!

There are some fairly serious charges being leveled at GEMA by musicians, venues and distributors from all over the German music scene. Unfortunately, none of them seems to have been addressed in an official arena to date, so I had to resort to collecting anecdotal tales from websites and internet forums. There are enough of these anecdotes doing the rounds that I soon started asking myself why the German government hasn't already launched an investigation into GEMA. Here are some of the unethical practices that the agency has been accused of:

Charge 1: Misappropriation of Funds.
Even the Wikipedia entry about GEMA (which sounds as if it was written by GEMA) admits that its full members, most of whom are big-time recording artists, receive the most money from fees collected by the agency. Anecdotes strongly suggest that that’s because GEMA doesn't track which artists it is collecting fees for, making it less likely that the money will get to the musicians who 'earned' it.

"We sent in two playlists by artists who had played only public-domain music […] in traditional arrangements. No composer, no arranger, no copyright; no GEMA music, no GEMA fee. GEMA sends an invoice for both concerts, charging us full price and stating 'Issued on the basis of the playlists submitted'. I send a letter back saying that I am somewhat surprised at their invoice, and could they please give me further details of exactly which play list items incurred it. Today, I get a Gutschrift rescinding the invoice. The f*ckers must have simply fired off an invoice without even checking the playlists and reckoned 'we might just get away with this one'." Posted by Crusoe on Toytown Germany.

So if GEMA isn’t tracking which artists it is collecting fees for, how can it possibly pay the money to them? The answer is that it can't, and probably won't. Such an undocumented and unaccountable collection system leaves GEMA wide open to exploitation and corruption by its officials. The transparency-obsessed Reichstag should be concerned but, to date, it hasn't lifted a finger to investigate. Instead, it prefers to quietly sponge up fees of hazy origin, to be misdirected as GEMA sees fit.

Charge 2: Extortion & Racketeering.

A bigger problem with GEMA is that it has failed to create, or even attempt to create, a reasonable and fair system of fee collection. Instead, it has resorted to a draconian "pay now, ask questions later" approach that is in itself, highly questionable and completely out of touch with modern technology and better-business regulations.

At this point, I must digress to give a bit of background. GEMA operates on the deeply flawed and outdated premise that it represents all recording artists in Germany, regardless of what they say. How is this possible? Well, a legal precedent set in 1965 - long before the advent of discos, DIY punk, independent music, the internet and MP3's - states that GEMA is assumed to represent all the musicians in Germany. Even if that had been true in the 1960s, the music industry has changed enough in the intervening decades that that assumption would be invalid these days. And yet, this flawed ruling is still enabling GEMA to collect fees on behalf of all recording artists and will probably continue to do so, forever and ever, until the Gerrman music scene gets together and challenges it.

In the meantime, if somebody disagrees with a fee imposed on them by GEMA, they are obliged to prove at their own expense that GEMA is in the wrong. GEMA has no legal obligation to prove that its fees are justified, either in or out of court. So basically, the fee payer is guaranteed to lose money, regardless of whether they pony up straight away or fight it in court. GEMA fee payers could very easily argue that they are being extorted by a government-backed agency. That would take some of the shine off of this country's reform-friendly, progressive image in Europe now, wouldn’t it?

‘People a few hundred years ago could be accused of being a witch, had to prove they weren't, and then had to pay their jailers anyway if they somehow managed to escape. 500 years later, we're doing the same thing; People can be accused of piracy; have to [prove] they're not, then have to pay their accusers anyway if they somehow manage to escape. Just insert "piracy" where the inquisition used "witchcraft".’ Posted by t.ferree on TechDirt.com
If the GEMA Vermutung (ruling) came about during the Cold War, then it's safe to assume that the judge who passed it might have failed to foresee the birth of a Berlin-based, DIY techno scene in a reunited Germany... yet this is the exact scene which will face financial ruin if GEMA’s proposed fee hikes go ahead. The fee hikes, which could take effect on January 1st 2013 (already a very busy morning in most Berlin clubs) would see club owners paying up to 5,000 Euros per five-hour club night.  The timing's insidious because obviously, all clubs are going to be packed for more than five hours on New Year's Day! 

Strangely, Berlin's clubs seem prepared to shut up shop rather than challenge the fees' legitimacy. Wouldn’t a collective lawsuit at least be worth exploring? They obviously have little else to lose. Instead, Berlin’s club scene seems to be going with its usual strategy of making threats and waiting to see what happens.

Charge 3: Creating a Monopoly.

One of the biggest developments in the music industry since the 1960s is the concept of self-regulation, through independent licensing and distribution. The Creative Commons license is gradually replacing the traditional copyrights upheld by GEMA. But, like some bitter old Opa who steadfastly refuses to learn about email while complaining that nobody writes to him anymore, GEMA refuses to even acknowledge the existence of Creative Commons. Again, this assertion strikes me as being so illogical that any half-assed lawyer could strike it down in court. It’s indisputable that the Creative Commons license does exist and that many artists worldwide prefer its redistribution-friendly terms to those of a traditional copyright license. Again, Germany seems to be waiting for these people to take a collective stand against the tyranny of agencies like GEMA.

“The recording industry learned from ASCAP and BMI in the thirties: If you're going to smother the market to death, you can't let them have any option that you DON'T control. If you don't control ALL the music, you've only got control of one nostril and the public [will] blow you out.” Posted by Kirk on TechDirt.com.

Solution: Europe?

As a last resort, Germany’s artists and organizers could team up and challenge GEMA’s musical monopoly in the European Court of Human Rights. After all, if an individual or organization is being forced to pay a fee it can’t afford, for a license that GEMA can't prove it has, there must be some sort of human rights violation going on. The terms “harassment”, “intimidation” and “racketeering” spring to mind. Funnily enough, these are the exact terms that are used by independent musicians and venue organizers who have worked with - and been worked over by - GEMA.

In 2005, the European Court of Human Rights ordered the UK government to pay £57,000 to two activists who had been taken to court by McDonalds in the 1990s. The government had wrongfully denied the activists legal aid when they were sued for libel by the fast food giant for the ‘crime’ of handing out leaflets detailing McDonalds’ poor human rights and environmental track record. The McLibel case spiraled into a two and a half year-long battle between the pair, who were forced to represent themselves, and a multinational corporation that had the best lawyers money could buy. After the case concluded (neither party 'won' it outright) the two activists took the UK government to court for denying them free legal aid. The ECHR ruled that UK laws had “failed to protect the public right to criticize corporations.” More crucially, it ruled that the McLibel trial was “biased because of the defendants' comparative lack of resources.” It would not be hard to apply this same precedent to other David and Goliath cases, such as those brought by GEMA against people and businesses that refuse to pay its fees.

If the UK government was found to have violated human rights law by allowing a powerful corporation to sue individuals in an attempt to intimidate them, then a similar judgment could be in store for the German government, should any of GEMA's victims take things to the next level. Not only have German officials failed to intervene when GEMA persecuted individuals and businesses without any evidence of wrongdoing on their part but, like the UK government in the McLibel case, German law actually support s GEMA's right to sue with an out-of-date ruling.

At the heart of the conflict between GEMA and Germany’s independent music scene lies a conflict between an old-fashioned, corporate view of the music industry and a modern, liberal one. GEMA insists that every transaction between two parties must have a measurable monetary value, while the independents assert that at least some of music’s value transcends physicality, and should remain free from materialism. That is why the mainstream industry is going down the tubes while the independent dance music scene is flourishing: because times have changed, and the independent scene is better able to adapt to them. And surprise, surprise: GEMA suddenly wants to raise its fees. Like some Egyptian mummy-queen in a horror film, its aged officialdom has risen from the grave and is wrapping bandaged hands around the throat of that sexy young newcomer, the club scene. If the corporates can’t hog the spotlight, then they’re going to make damn sure nobody else can.

At the end of the day, GEMA is nothing but a glorified insurance policy for the music industry, isn't it? A promise that, whenever profits dip - due to recession, technological innovation, cultural shifts or any of a thousand other unforeseen variables - the industry will still be allowed to make up its losses by picking on independent music venues and their fans.But there are many sound, legal arguments against GEMA's right to exist in the first place, and just as many sound, legal arguments for fighting it.

So as it turns out, the facts support what music fans have been saying: GEMA is bad and it does suck. It's not evil, though - just short sighted, simplistic and sloppy. It'll only pass if smart men and women fail to realize that and do nothing to stop it.

Please sign the online petition against the proposed fee increases (it’s simple to do, even if your German isn't great.)

References: Torremans, Paul (2007). Copyright Law: A Handbook of Contemporary Research. Research Handbooks in Intellectual Property. Cheltenham: Edward Elgar Publishing. p. 265. ISBN 978-1-84542-487-9.

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