Major digital online media companies have criticised plans by the European Commission to create a pan-European licensing system.

The Commission is hoping to make it easier for authors and content providers to get licences across the European Union, and so avoid having to apply for 25 different licences.

But the existing plan has not found favour in some quarters. Director of the European Digital Media Association (EDIMA), Wes Himes, said: "We have a problem with the lack of far-reaching reform of collective rights management." EDIMA's members include Amazon.com, Apple, MovieSystem, RealNetworks and ISPs including like Wanadoo, Yahoo and Tiscali.

Himes singled out as a weakness the fact that the Commission has chosen to make a recommendation, which allows EU countries to decide how to set up their national systems, rather than adopting binding legislation. "We felt that there should be a competitive mechanism by which pan-European companies can obtain pan-European licences for online exploitation. This doesn't achieve this. It only exerts a small pressure on member states [to do so]," Himes said.

He said that plans being considered by the Commission earlier in the year had been "watered down" following lobbying by collective rights management societies.

However, the Commission's strategy was given a cautious welcome by the group that represents authors and artists' rights. "We think a recommendation is better than a directive because technologies are evolving rapidly and you need a great deal of flexibility. With a directive there's a risk of getting stuck [with a particular model]," said Isabelle Prost, a legal advisor with GESAC, the European Grouping of Societies of Authors and Composers. She is waiting to see the final text from the Commission before commenting on the details of the recommendation, she said.

"Europe's model of copyright clearance belongs more to the 19th century than to the 21st," Jacqueline Minor, a director at the Commission's Internal Market department said Friday at a conference on copyright in London. "We need a new generation of copyright licensing model more in tune with the Internet age."

Commercial operators need to be able to secure licences for more than one territory, she said. This would also help rights owners to have their content disseminated as widely as possible and give them more choice over which rights manager they used. Rights managers would have to allocate licences on non-discriminatory terms. The recommendation would also include provisions to deal with the fair distribution of royalties and effective dispute resolution.

However this claim was contested by EDIMA's Himes. "We asked for a proper third-party adjudication system but it's been diluted."