How to regulate private copying levy in EU?

What proposes draft report (de) by Françoise Castex and why

Why

Cultural content plays a pivotal role in the digital economy. Digitisation is having a huge impact on the way in which cultural goods are being produced, distributed, marketed and consumed, and lower distribution costs and the appearance of new distribution channels can facilitate access to creative works and culture and improve the circulation of those works around the world. The implementation of exclusive rights does not guarantee all rightholders, and in particular performance artists, a fair and proportional share of revenue arising from the use of their works. Despite permanent access to online works, downloading, storage and private copying for offline use is continuing, a private copying levy system cannot therefore be replaced by a licencing system.

Under Directive 2001/29 /EC, Member States may provide for an exception or limitation to the reproduction right for certain types of reproduction of audio, visual and audio-visual material for private use, accompanied by fair remuneration, and may allow consumers in countries that have introduced that limitation to copy their music and audio-visual collections from one medium or type of multimedia material to another freely and as frequently as they wish, without seeking authorisation from the rightholders, provided this is for their private use. Directive 2001/29/EC and the case law of the Court of Justice of the European Union do not require Member States to see that rightholders receive direct payment of the full levy collected for private copying, and the Member States have broad powers of discretion to establish that part of that remuneration should be paid indirectly.

The sum total of private copying levies collected in 23 of the 28 EU Member has more than tripled since Directive 2001/29/EC came into force and, according to the Commission’s estimates, now stands at over EUR 600 million, and these levies only constitute a small proportion of the turnover of manufacturers and importers of traditional and digital recording media and material. The private copying levy is paid by consumers when purchasing recording or storage media or services and they are therefore entitled to know of its existence and quantum. Media and material prices do not vary according to the different rates of private copying levy applied across the Union.

What

The private copying levy should apply to all material, media and services whose value resides in their private recording and storage capacity and should be payable by manufacturers or importers; if the levy were transferred to retailers, this would result in an excessive administrative burden for small and medium-sized distribution companies and collective rights management organisations. It is recommended in the case of cross-border transactions, private copying levies be collected in the Member State in which the product is placed on the market and that the product then be allowed to circulate freely in the internal market without being subject to additional levies. Private copying levies cannot be collected by a collective management organisation of a Member State if remuneration of the same kind has already been collected in another Member State.

As for online services, contractual authorisations cannot be allowed to prevail to the detriment of private copying exception arrangements. Any levies should be calculated on the basis of the possible harm to the rightholders resulting from the private copying act in question. European framework should be created in order to guarantee that equivalent conditions apply to rightholders, consumers, manufacturers and importers of equipment and service providers across the Union.

Consumers must be informed of the amount of the levy paid by them; it is recommended, in consultation with manufacturers, importers, retailers and consumer associations, to ensure that this information is indicated on packaging and, as far as possible, on invoices and receipts issued to consumers. To earmark at least 25% of revenue from private copying levies to promote the creative and performance arts. The organisers of cultural events and performances receiving funding from private copying levies should make their public more aware of this by means of additional publicity.

Private copies of protected works made using cloud computing technology may have the same purpose as those made using traditional and/or digital recording media and materials. These copies should be taken into account by the private copying compensation mechanisms. It is recommended for Commission to assess the impact on the private copying system of the use of cloud computing technology for the private recording and storage of protected works, so as to determine how these private copies of protected works should be taken into account by the private copying compensation mechanisms.

Commission and Member States should examine the possibility of legalizing works sharing for non-commercial purposes so as to guarantee consumers access to a wide variety of content and real choice in terms of cultural diversity.