Governed by the Regulations on Copyright Collective Management (State Council Decree
No.429) and supervised by NCAC, China’s official collective management organizations
(CMOs) are the sole legal bodies authorized to conduct cross-border bulk licensing for music,
photography, literary and audiovisual works. A critical compliance risk for overseas media
groups: unauthorized private collective licensing without NCAC-approved CMO qualification
will render all licensing contracts void and trigger heavy administrative fines. Many overseas
music labels and stock image platforms suffer massive royalty losses and administrative
penalties due to unlicensed third-party agents conducting large-scale copyright collection.
This case analyzes a European music publisher’s invalid cross-border licensing dispute,
clarifies NCAC’s regulatory standards, and delivers standardized compliance guidance for global
content enterprises.
A European independent music label signed a bulk copyright authorization with an unregistered
domestic cultural intermediary in 2024, authorizing the agent to collect public performance
royalties from thousands of Chinese KTVs, malls and live streaming platforms across the
country. The intermediary operated without cooperation with any NCAC-recognized music CMO
and did not file cross-border reciprocal representation records with NCAC. When hundreds of
venue operators refused to pay royalties, the European label filed civil lawsuits to recover arrears.
Two fatal procedural defects led to full claim dismissal: First, under Article 3 of the Collective
Management Regulations, only state-approved CMOs can carry out centralized mass licensing;
private intermediaries lack legal collective management capacity, making all royalty collection
contracts null and void. Second, the cross-border reciprocal representation agreement between the
foreign label and Chinese authorized CMO was not filed with NCAC, so the licensing relationship
had no official legal recognition. The European label lost over 1.4 million RMB in recoverable
royalties and received a 180,000 RMB administrative fine for illegal collective licensing operations.
Exclusive statutory monopoly of five NCAC-certified CMOs for collective licensing (Regulations
Article 6). Only five official non-profit collective management bodies (music, audio-visual, text,
photography, software) are legally permitted to conduct centralized bulk royalty collection,
nationwide venue licensing and cross-border reciprocal authorization. Any private company, cultural
studio or freelance agent engaging in large-scale copyright collective collection without CMO
qualification commits illegal copyright operation acts, with all signed licensing agreements legally
invalid.
Mandatory NCAC filing for cross-border reciprocal representation pacts (Article 22). All
cooperation contracts between overseas copyright owners and Chinese official CMOs must be
submitted to NCAC for public filing within 30 working days of signing. Unfiled reciprocal agreements
cannot be used as valid evidence in civil litigation or administrative enforcement procedures.
Uncertified English-only authorization documents without Simplified Chinese notarized translations
will be rejected by local copyright bureaus and people’s courts.
Clear tiered administrative penalty standards for illegal collective licensing. Per the Measures for
Copyright Administrative Punishment, unlicensed mass copyright collection operators face
confiscation of all illegal gains plus fines ranging from twice to five times the illegal revenue;
if no clear profit can be verified, the maximum fine reaches 250,000 RMB. Severe repeated violations
may lead to industry blacklisting and transfer to judicial authorities for criminal investigation of
illegal business operations.
CMO standardized royalty distribution supervision mechanism. Official CMOs may only
deduct a legally capped proportion of management fees from collected royalties and must
publish annual full financial reports on NCAC’s official platform. Any arbitrary fee deduction or
delayed cross-border royalty remittance by CMOs can be reported to NCAC for administrative
rectification.
Separate single direct licensing exception rule. Small-scale one-off direct licensing between foreign
copyright holders and individual Chinese merchants does not require CMO participation. However,
continuous nationwide centralized royalty collection covering hundreds of commercial venues is
defined as collective management activity, which is strictly restricted to authorized official CMOs only.
China’s statutory CMO exclusive collective licensing system creates standardized, unified royalty
collection channels for global creative enterprises, yet the ban on unlicensed private mass copyright
collection brings heavy financial penalties for uninformed overseas operators. This European music
label licensing invalidation case fully proves cooperation with unqualified intermediaries and unfiled
cross-border reciprocal pacts result in unrecoverable royalty losses and administrative fines. For
overseas music, photography and audiovisual content brands expanding into China, exclusive cooperation
with NCAC-certified collective management bodies and timely official contract filing are mandatory
safeguards for legal nationwide royalty recovery.
Hyperlink List：
● NCAC Official English Portal for Copyright Collective Management Rules:
https://english.ncac.gov.cn/xxfb/flfg/bmgz/
● Full Text of Regulations on Copyright Collective Management (State Council Decree No.429):
