The CJEU Considers that the Spanish Fair Compensation for Private Copying System is Incompatible with Directive 2001/29.
As a result of a legal dispute initiated in Spain by several copyright collecting societies mainly aimed to obtain the annulment of Royal Decree 1657/2012 (in Spanish), which regulates the payment proceeding of a fair compensation for private copying borne by the general State budget, the Spanish Supreme Court decided to send a request for a preliminary ruling to the Court of Justice of the European Union, raising, among others, the following question:
“Is a scheme for fair compensation for private copying compatible with Article 5(2)(b) of Directive 2001/29 where the scheme, while taking as a basis an estimate of the harm actually caused, is financed from the General State Budget, it thus not being possible to ensure that the cost of that compensation is borne by the users of private copies?”
In the past, the CJEU, through its Judgment of October 21, 2010, C-467/08, in the well known “Padawan” case, already declared that the so called digital levy, according to which, any purchaser of equipment, devices and storage medium suitable for private copying of protected works must pay a specific amount to compensate authors and holders of intellectual property rights, is incompatible with Directive 2001/29, on the harmonization of certain aspects of copyright and related rights in the information society.
According to the CJEU, the referred digital levy is contrary to European law, since it was indiscriminately applied to purchases of any kind of device, without distinguishing between those devices purchased by users, which could make private copies (natural persons who act as final users) or those purchased by legal persons or professionals, which could not make private copies.
Following the referred Judgment “Padawan”, the Spanish government modified its fair compensation system for private copying. By virtue of Royal Decree 1657/2012 the compensation is financed directly by all taxpayers from the general State Budget.
Well, the CJEU has concluded this time through its Judgment of June 9 2016, C-470/14, “EGEDA”, that this new system of fair compensation for private copying is in the same way contrary to European Law.
The argument alleged by the CJEU is very similar to the one already exposed in the “Padawan” case, this is, the Spanish system of fair compensation for private copying, financed through the general State Budget, does not guarantee that the cost of the compensation is solely borne by users of private copies and, therefore, it does not discriminate.
In conclusion, the recent CJEU’s Judgment, although it is not new as to the arguments, it poses an interesting situation since it compels the Spanish legislator to find and define a new system of fair compensation, which is compatible with European law.
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