Consumers’ FAQs on copyright: what are copyright levies?

There has been published a very useful guide for consumers and for anyone who is curious about copyright. This guide explains different things, relating to IP rights, in simple way. The project has been commissioned by the European Union intellectual property office.

The Guide aims to give ‘answers to the most frequently asked questions (FAQs) average consumers have in relation to copyright for all twenty-eight EU Member States.’ The present Summary Report highlights the convergences and differences in national copyright laws in relation to the 15 consumer questions.

Article 5(2)(b) of the Information Society Directive allows Member States to permit private copying, under the condition that rights holders receive fair compensation for the use. The mandatory nature of the claim for compensation has been confirmed by the CJEU. The modalities and amount of payment due are generally left up to the national authorities to decide.

Recital 35 of the Information Society Directive simply states that ‘when determining the form, detailed arrangements and possible level of such fair compensation, account should be taken of the particular circumstances of each case.’ In practice, many Member States that provide for a private copying exception have established a so-called levy system. While the CJEU has started to elaborate some guidelines, modes of operation of national levy systems still diverge largely.

Where copyright levies exist, they are, amongst other things, thought to remunerate or compensate rights holders for private uses of their work. Levies are often due for uses covered by the exception for reprographic copying or uses that are allowed on the basis of other limitations, upon the condition that remuneration is paid.

Normally, manufacturers, producers and importers of blank media or reproduction equipment pay the levy directly. In practice, the end-user will pay the levy indirectly through a higher price for the product. The competent collective rights management organisations (CRMO) of the respective Member States administer the levies, that is to say, they collect and redistribute them among the different groups of beneficiaries.

The beneficiaries of the income generated are typically authors and related rights holders, such as performers or producers of phonograms or audio-visual works. The specific groups of rights holders that benefit from copyright levies vary across the EU. In some Member States, a percentage of the levies collected are used to foster cultural actions. According to the CJEU, national laws must make sure that ‘authors benefit, even indirectly, from some of the compensation of which they have been deprived.’

Depending on the Member State, a levy may be due on different devices and carriers. Typically, levies will be charged on storage media or on reproduction equipment. According to the new Slovak legislation, for example, ‘levies will be paid also from the price of computers, tablets, cameras, video cameras, mobile phones, set-top boxes, smart TVs, MP3 and MP4 recorders, video game consoles, etc.’ In many cases, the amount of the levy will consist in a percentage of the price of the relevant device, as determined by legal or administrative provisions or CRMO.

It could be noted that the terminology chosen by national experts diverges: while certain experts state that levies ought to provide ‘compensation’ for the losses suffered, for example, through the private copying exception (see, e.g. the information provided by the experts from BE, BG, FR, HR, AT, PL, SI, SK, FI, SE), others refer to levies as a form of ‘remuneration’ for authors (see, e.g. the information provided by the experts from DK, EL, IT, LV, LT, HU, NL).

In Cyprus and Malta, a private copying exception with a claim for compensation exists, but no levy system or other remuneration scheme is in place. In Luxembourg, no levy system is currently in place. ‘The law foresees a copyright levies system to be introduced by regulation, but the regulation has not been taken to this day.’ In practice, ‘all recordable media have to be imported to Luxembourg and the copyright levies that are already included in the import price are not deducted. This means that levies are already paid via the import price of recordable media.’

In Spain, a levy system was in force until the beginning of 2012. ‘Since then, private copying is compensated from the General Budget of the Spanish Government. Compensation received by copyright owners is calculated annually by the Government.’ Since the beginning of 2015, the ‘Finnish Government is responsible for paying copyright owners compensation for private copying. There will be a separate appropriation in the state budget for the copyright compensations. The appropriation shall be so big that it can ensure proper and reasonable compensations for authors. Private copying and the frequency of it will be investigated by an independent research body in order to scale and focus the compensations correctly.’