The consolidation of Russia's three state-accredited collection societies is under threat, with the companies reportedly failing to agree on the deal's specifics.
Three months ago RAO, the state-approved authors' rights collecting society, VOIS, which deals with neighboring rights, and RSP, which collects a one-percent tax on imports of electronic devices that can be used for copying content, announced merger in a bid to simplify procedures for royalty collection.
However, the justice ministry, which is to approve the deal, recently announced that a request for merger approval had been recalled.
The Russian business daily Vedomosti quoted a source close to the deal as saying that RAO, VOIS and RSP have been unable to agree on how exactly the new organization would work and how areas of authority would be divided.
Another issue on which the three organizations have apparently disagreed is the deal's legal format -- whether is should be registered as a merger or acquisition of VOIS and RSP by RAO.
Vesdomosti quoted RAO's deputy general director Artemy Karpychev as saying that the merger process is currently suspended. He added that legal consultations have led to discovering risks that transparency and smoothness of transition could be jeopardized in the consolidation process.
Karpyuchev's statement apparently contradicts what RAO said about the prospects of consolidation in the weeks following the announcement of the deal.
"The new organization will be absolutely unique," Sergei Fedotov, general director of RAO and RSP, was quoted as saying by the news agency TASS. "There is nothing like that elsewhere in the world."
Back then, culture minister Vladimir Medinsky also supported the idea.
However, a few weeks later, the communications ministry sharply criticized the existing system of copyright royalty collection and proposed that a government agency be in charge of all royalty collection.