As the representative body of composers, songwriters, music publishers and their collecting societies in the UK, British Music Rights welcomes the opportunity to comment on the consultation on proposed changes to the Consumer Protection (Distance Selling) Regulations 2000.

Our main concern relates to the right balance between (a) the valid interests of consumers and (b) the equally important protection of music suppliers from not only burdensome and costly formalities they might have to comply with but also from the possibility of the Regulations being used unfairly by consumers to copy music and not pay for it.

The imposition of additional bureaucracy seems to defy the UK Government's endeavours to cut red tape for businesses as expressed for instance in the current DTI Consultation on the proposed EU Directive on Services in the Internal Market. Most of our members qualify as SMEs (over 90 % of the music publishers) and micro firms (most of the composers). The proposed changes potentially make it easier for consumers to cancel a contract whilst maintaining the benefits of the music provided by our members. Also, if there is not protection within the Regulations from consumers being able to copy music supplied to them and then returning the music, it will discourage the supply of music through these methods and potentially discourage investment in distance selling infrastructure.

Additionally, even a slight increase in costs resulting from additional formal requirements as suggested in the changes to Regulations 7, 8, and 10 might lead to a critical diminution of already tightly calculated margins.

Our specific interest involves the potential abuse of the cooling off period under Regulation 10. This could be easily addressed by extending the exemption under Regulation 13.

Regulations 8 (3)

Regarding the supply of music online, our concern relates to the extent that suppliers are exposed to cancellation of the contract or to penalties for not providing correct information. It is not stated whether or not the supply of music on-line (e.g. streaming and downloading) qualifies as a service, and we would welcome further discussion and clarification on this point.

Regulation 8(3) requires a supplier of services to inform the consumer in writing or another durable medium, before the contract is made, that he will not be able to cancel the contract (under Regulation 12) once performance of the services has begun with his agreement. The absence of any requirement for follow up information and the consequential limitation of the right to cancel removes the risk that a consumer could keep a copy of a song on their PC but still exercise their right to cancel. This should not be changed.

The proposed changes to Regulation 8 (3) will also generate further costs to music publishers legitimately providing music online and hence slow down their participation in e-commerce.

Regulation 10 (4)

Even though we acknowledge the importance of providing convenient ways to cancel a contract for both consumers and suppliers, we foresee problems relating to the production of evidence of cancellation by phone. We do not support an extension of this nature unless a cancellation by phone is followed up by written confirmation on the same day. We are also concerned on the additional costs to suppliers e.g. for updating their contracts or the education of employees on changes to the law.

Regulations 10 and 13

Regulation 10 of the Consumer Protection (Distance Selling) Regulation 2000 (in conjunction with Regulations 11 and 12) provide the possibility for a customer to cancel an order for any reason within 7 working days to allow the consumer the opportunity he would have had in a conventional shop to examine the goods before deciding to buy. However, printed music is particularly at risk of being photocopied once in the consumer's hands in a way that it will not be in a conventional shop - retailers would never make copying facilities available to potential purchasers.

This part of the Regulation affects music creators and publishers in relation to sheet music and the online delivery of music; video and sound recordings are expressly excluded from the scope of the regulation. As some music publishers have already brought to our attention, consumers can and regrettably have used the Regulations in an unintended way to order the music under a distance contract, copy it, then return the original and claim their money back under the Consumer Protection (Distance Selling) Regulation 2000.

The only guidance that Music Publishers Association members have had from the DTI about getting round the problem is to supply their music in sealed wrapping and to provide in their terms of contract that the right to cancel cannot be exercised if the packaging is unsealed. This however is impractical and defeats the purpose of the Regulations for the following reasons:

1. If the music is sealed there is no possibility for the consumer to browse and view the music before deciding whether or not to buy it, as would be possible in a shop.

2. Music is almost never sold in sealed packaging as most of it is for sale in shops where consumers need to be able to browse before they buy and

3. Sealing the music (or at least that which is sold under distance contract) would be both costly and burdensome and would put publishers at a disadvantage in an already difficult market.

Similarly, a copy of a musical work on a PC, TV or portable device once delivered cannot be returned since the enjoyment of the work has already taken place. Even if it were returned, there is risk to the rights owner that the consumer would inevitably keep a copy on the PC and not wipe the copy from the hardware. In that respect sheet music and music delivered online are no different to audio and video recordings which are already exempted; hence the justification for exempting those goods under Regulation 13 seems also to apply for musical works or scores sold or licensed for use on-line, for instance when musical works are downloaded direct from a website or music portal.

The Office of Fair Trading has given advice to one music publisher that the right to return does not apply to product bought by an individual which is intrinsically designed for use by more than one person. This means that if the printed music is being bought for an ensemble (anything from a duet to a full orchestra) then the right would not apply. It would be helpful to have confirmation that this is so under the existing Regulations. However, this is clearly not enough given the problems we have outlined above.

Regulation 13(1) provides for the exclusion of the consumer's right to cancel the contract in specified cases, using the exact wording of Article 6 (3) of the Directive. Since there is nothing to prevent the UK from departing from the text of the Directive by adopting language which establishes with precision the Directive's clear intent, we suggest some amendments to make this position clearer. The Regulations are intended to bite on rights licensed or sold on-line which, if not clearly exempted from the right to cancel, will be subject to a harsher regime under the Regulations than under conventional methods of trading.

Therefore we would suggest that, e.g. through amending Regulation 13, it could be made clear that:

1. Regulation 13(1)(a): if this does apply to the on-line supply of music it should include the situation where music is streamed or downloaded to the consumer.

2. Regulation 13(1)(c) applies to equivalent situations where an article which is a copy of a copyright work supplied to the consumer can easily be copied prior to return.

3. The term 'unsealed' in Regulation 13(1)(d) includes the indication by the consumer that he or she accepts the terms of any end-user licence agreement relating to the supply of the item in question.

We are at the disposal of the DTI for further discussions.