A political fight over music licensing fees has reached Costa Rica’s municipal governments, raising questions about how restaurants, bars, hotels and other businesses must prove they are authorized to play copyrighted music.
The latest move came in Desamparados, where the Municipal Council voted 10-1 on July 6 to stop requiring businesses to present proof that they are current with the Asociación de Compositores y Autores Musicales de Costa Rica (ACAM), when applying for or renewing a municipal business license.
The decision does not eliminate copyright fees or give businesses permission to play protected music without a license. Instead, it removes the municipality from the collection process by separating ACAM compliance from the granting or renewal of a business license. Businesses that publicly play copyrighted music may still be required to obtain authorization and pay the corresponding royalties. ACAM can continue seeking payment through the legal mechanisms available under Costa Rica’s copyright laws.
The municipal vote followed weeks of criticism from José Miguel Villalobos, a lawmaker from the governing Pueblo Soberano party, who used his June 17 political control period in the Legislative Assembly to accuse ACAM of lacking transparency in how it sets fees, collects money and distributes royalties.
Villalobos cited figures from 2021 contained in an earlier legislative file. He said ACAM collected approximately ₡1.3 billion that year and distributed slightly more than ₡900 million to rights holders.
The lawmaker questioned what happened to the remaining funds and criticized what he described as ACAM’s luxurious headquarters. However, he did not present evidence establishing that the difference between the amount collected and distributed was used to finance the building.
Villalobos also questioned how ACAM determines which musicians and composers receive money when songs are played inside thousands of businesses. He said he wants lawmakers to create an investigative commission to examine the organization’s finances, tariffs and royalty distribution system.
No investigative commission has yet been formally established. ACAM President Arnoldo Castillo rejected the accusations and said the nonprofit organization uses registration records, monitoring systems, usage reports, repertoire lists, information supplied by businesses, digital platforms and approved distribution formulas to calculate royalty payments.
ACAM also said its financial statements undergo external audits and that the organization is authorized and supervised by the Intellectual Property Registry. It operates under Costa Rican copyright law and agreements with foreign rights organizations that allow it to represent millions of international creators.
The disagreement has revived a legal dispute that dates back nearly two decades. Article 4 of Executive Decree 23485-MP once required municipal governments and other public agencies to demand proof of music authorization before granting or renewing certain operating permits.
Costa Rica’s competition authority, COPROCOM, concluded in 2008 that the requirement created an unnecessary barrier to commerce and gave a private organization a special advantage. The government repealed Article 4 through Executive Decree 35536-MP, which took effect in October 2009.
The repeal removed the automatic link between municipal permits and proof of payment to music rights organizations. It did not repeal the copyright protections that allow authors, composers and other rights holders to receive payment when their work is used commercially.
Desamparados’ legal advisers relied on that distinction when recommending that the municipality stop demanding ACAM documentation. They concluded that the municipality could not require paperwork without a current legal provision authorizing it to do so.
The controversy matters to a wide range of businesses across Costa Rica. Restaurants, bars, hotels, gyms, shops and other establishments often use music as part of the customer experience, while smaller operators have argued that ACAM’s tariffs can be difficult to understand and add another expense to already high operating costs.
A previous attempt to change the system failed earlier this year. Legislative bill 23.702 would have exempted many businesses that use music only for background atmosphere rather than as a central part of their business model. The Legislative Assembly’s Economic Affairs Committee issued a negative report and archived the proposal following a 5-2 vote in March.
The Culture Ministry, Ministry of Economy, Attorney General’s Office and Foreign Trade Ministry were among the institutions that raised objections, including concerns that the exemptions could weaken constitutionally protected copyright rights. Villalobos has indicated that he intends to revive the debate during the current legislative term.
For business owners, the effect stays limited to municipal paperwork in Desamparados. The broader obligation to respect copyright law remains in place. The larger question is whether other municipalities will follow Desamparados by removing ACAM documentation from their own licensing procedures, creating a nationwide shift in how music fees are enforced.
