• The current regime does not impose appropriate obligations of transparency or accountability. There is insufficient transparency around how declared collecting societies are using statutory funds, as well as who benefits from the remuneration paid under the statutory licence.
• Declared collecting societies have an inappropriate degree of discretion regarding how statutory funds will be used.
• There is no effective oversight of declared collecting society compliance in the current governance arrangements. The current triennial Code Review process has been ineffective in addressing concerns that have been raised by statutory licensees.

Declared collecting societies – and in particular, Copyright Agency – have strayed beyond what UA considers to be their appropriate role. Copyright Agency has adopted a commercial, profit-making approach to administering the statutory licence. This approach appears to regard universities’ changing copying practices, that have led to universities relying less and less on the statutory licence, as a “threat” to its business model. To address this “threat” Copyright Agency is taking steps to ensure that statutory licensing income continues to increase. While this kind of approach may be appropriate for commercial licences, it is not an appropriate way to administer the statutory licence. It is therefore timely to consider whether operational separation between the commercial and statutory functions of declared collecting societies is needed to ensure that commercial imperatives are not applied to statutory functions, and that statutory funds are not used for non-statutory purposes.

There is currently no effective check on the ability of declared collecting societies to exploit their monopoly position to engage in what amounts to rent seeking from publicly funded entities. The high cost of Copyright Tribunal proceedings has greatly limited the scope of the Copyright Tribunal to play this role. The ACCC should be given an oversight role over declared collecting societies with a view to ensuring that they do not use their market power in a way that is contrary to the public interest.

The shortcomings cannot be fixed through Code of Conduct amendments.

Broad reform is required that includes:

• Legislative obligations for declared collecting societies to have regard to the interests of licensees as well as their members;
• Mandatory guidelines, to be issued by the Minister, that set the standards of transparency and accountability that declared collecting societies are required to meet; and
• An effective mechanism for ensuring compliance with such guidelines.

This role could be played by the ACCC.