L 346/60 Official Journal of the European Communities 22.12.98 COMMISSION DECISION of 11 December 1998 under the provisions of Council Regulation (EC) No 3286/94 concerning section 110(5) of the Copyright Act of the United States of America (notified under document number C(1998) 4033) (98/731/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community’s right under inter- national trade rules, in particular those established under the auspices of the World Trade Organisation ('), as amended by Regulation (EC) No 356/95 (3, and in par- ticular Articles 13 and 14 thereof, After consulting the Advisory Committee, Whereas: A. PROCEDURE (1)  On 21 April 1997 the Commission received a complaint pursuant to Article 4 of Council Regula- tion (EC) No 3286/94 (hereafter ‘the Regulation’). The complaint was lodged by the Irish Music Rights Organisation (IMRO) with the unanimous support of the Groupement européen des sociétés d’auteurs et compositeurs (GESAC). (2)  The complainant alleged that Section 110(5) of the 1976 Copyright Act of the United States of America is inconsistent with several provisions of the Agreement establishing the World Trade Or- ganisation (hereafter ‘the WTO Agreement) and its annexes. On that basis the complainant asked the Commission to take the necessary actions to convince the United States of America to repeal this measure. (3  The complaint contained sufficient prima facie evidence to justify the initiation of a Community examination procedure pursuant to Article 8 of the () OJ L 349, 31. 12. 1994, p. 71. () OJ L 41, 23. 2. 1995, p. 3. Regulation. Consequently, such procedure was initiated on 11 June 1997 (}). 4) Following the initiation of the examination pro- cedure the Commission conducted an in-depth legal and factual investigation into Section 110(5) of the US Copyright Act as well as into the amend- ments to the statute as discussed in US Congress at the time of the investigation and enacted mean- while. Based on the findings of this investigation the Commission reached the conclusions which are indicated below. B. FINDINGS REGARDING THE EXISTENCE OF AN OBSTACLE TO TRADE (5)  Although under the US Copyright Act the right holder of a musical work has the exclusive right ‘to perform the copyrighted work publicly’, Section 110(5) of the US Copyright Act exempts certain public performances from protection. Before the recent addition of a new subparagraph widening the scope of the exemption (see further under item D) it read as follows: ‘Notwithstanding the provi- sions of Section 106, the following are not infringe- ments of copyright: (...) communication or trans- mission embodying a performance or display of a work by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes, unless (a) a direct charge is made to see or hear the transmission or (b) the transmission thus received is further retrans- mitted to the public’. The exemption covers the use of a radio or television set ‘of a type commonly found in private homes’ in a shop, a bar, a restau- rant or any other place frequented by the public. As a result of its vague and ambiguous statutory language, Section 110(5) has given rise to a very broad interpretation of what is commonly referred to as the ‘homestyle exemption’. For example, it has been held that the exemption can also apply to companies operating large chains of stores throughout the country and using the playing of music in stores as part of their commercial policy (*). () OJ C 177, 11. 6. 1997, p. 5. (Y) See BMI v. Edison Bros Stores Inc. United States Court of Appeals for the Eighth Circuit, No 91-2115 and BMI v. Claire’s Boutiques United States Court of Appeals for the Seventh Circuit, No 91-1232.