of other factors which indicate that this is so. Mr Lister stated that in determining the tariff he identified, in
ascending order, the tariffs in other countries. This was because the record companies felt they had "been
sold short", and SAMPRA was going into the market for the first time and did not want to be locked into the
bottom half of the table of comparative rates in other countries. He therefore positioned the tariff at the 75%
mark of these tariffs to see whether anybody was able to say they were "way out of line". He conceded that
although some people may think the tariff was out of line, he did not. Prof Ross criticised this approach as he
did not understand why the tariff in a developing country such as South Africa should be placed in the top
quartile of the tariffs of countries in general, as economically it was arbitrary and not rational. He stated that
SAMPRA's tariffs ranged between the 14th and 17th most expensive, and were higher than almost
Page 57 of [2016] 2 All SA 40 (SCA)
all of the developing countries and higher than a few of the wealthier countries, including Australia. In
general, SAMPRA's rates were approximately equivalent to the average counterpart rates in countries with
per capita gross domestic products about one third higher than South Africa. In other words, SAMPRA's tariffs
were on a par with countries that on average were one third richer than South Africa, for which there was no
economic justification. Consequently, the SAMPRA tariff, in comparison with other tariffs, was unreasonable.
[50] SAMPRA also submitted as justification for the amount of the tariff that its tariff should be higher than that of
SAMRO. This was based upon the view of Mr Du Plessis that the value in the sound recordings was worth
more than the value in the underlying composition, at least in the bulk of the music used by the retailers.
According to Mr Du Plessis this had nothing to do with the fact that the SAMRO rate was unreasonably low.
This Court, however, in National Association of Broadcasters (at paragraph 63) expressed the view that "[i]t
does not appear that royalty rates for sound recordings internationally exceed composer royalty rates. It is
arguable, though not definitive, that composers are the key component in relation to the production of music."
Prof Areni stated that he was not aware of any research on this issue and accordingly there was no scientific
basis for the proposition. Ms Kobie Swart, an expert in music therapy, agreed that one could not make a
general statement in this regard, as it would depend upon the individual piece of music as well as the type of
music. I, accordingly, agree with the submission by the retailers that there was no rationally justifiable basis
for SAMPRA's decision to adopt a tariff level considerably higher than that of SAMRO.
[51] SAMPRA led no expert evidence to rebut the evidence of Prof Ross that the tariff set by SAMPRA was excessive
and therefore unreasonable. Prof Areni, as pointed out above, stated that he had not been asked to express
an opinion on whether the rate set by SAMPRA was reasonable. There was accordingly sufficient evidence
before the tribunal for it to be satisfied that the retailers' claim was well founded, ie that the tariff set by
SAMPRA was unreasonable. In coming to this conclusion, I do not overlook the contentions of SAMPRA that a
relevant factor in setting the tariff was the administrative benefit to users of copyright music, in having to deal
with one entity, namely, SAMPRA, and not several record companies to agree a tariff. I also do not overlook
the contention of the retailers that a further relevant factor to setting the tariff is the benefit to SAMPRA of
having its music played in the retailers' stores and exposing it to the public. In the context of all of the
evidence I do not regard either of these contentions as being of significance in determining whether there
was sufficient evidence before the tribunal.
[52] The remaining issue is whether the tariff determined by the tribunal was reasonable in the circumstances. The
table below sets out the discrete categories based upon the floor area of a store in square metres. The first
column is the SAMPRA tariff for each category and the second column is the equivalent PPCA (Australian) tariff
converted to rands, using PPP by Prof Ross. The third column sets out the tariff awarded by the tribunal
Page 58 of [2016] 2 All SA 40 (SCA)
for each category. The final column sets out the tariff which Counsel for the retailers submitted was a
reasonable tariff in each category.
Size of store
SAMPRA tariff
2008/ 2009
Retailers/
Prof Ross
recommended
tariff
Copyright
Tribunal
tariff
Copyright Tribunal
tariff set at 30%
of SAMPRA tariff
Up to 50m²
R500
R279,46
R389
R150
Between 50 and 100m²
R1000
R279,46
R389
R300
Between 100 and 200m²
R1500
R337,32
R568
R450
Between 200 and 300m²
R2000
R376,10
R620
R600
Between 300 and 500m²
R2500
R399,49
R840
R750
Between 500 and 750m²
R3000
R511,52
R930
R900
Between 750 and 1000m² R3500
R549,69
R1050
R1050
Between 1000 and
1250m²
R4000
R646,94
R1110
R1200
Between 1250 and 1500
m²
R4500
R676,49
R1110
R1350
Between 1500 and
1750m²
R5000
R709,73
R1220
R1500
Between 1750 and
2000m²
R5500
R739,89
R1220
R1650
Between 2000 and
2500m²
R6000
R792,83
R1220
R1800