Digital private copying has taken on major economic importance as a result of technological progress and the shift to the Internet and Cloud, and the existing system of private copying levies does not take sufficient account of developments in the digital age. There is currently no alternative approach in this area that would ensure appropriate remuneration for the rightholder and at the same time make private copying possible. A discussion therefore needs to be conducted in the long term on a more efficient and up-to-date approach that takes more account of technological progress.
In the case of online music sales, licence-granting practices may provide an alternative to the system of private copying levies until a more efficient and up-to-date approach can be found. In the digital field in particular the classic copying process is being replaced by streaming systems where no copy of the copyrighted works is placed on the user’s terminal, and preference should therefore be given to licensing models in these cases. Particularly in the digital age, it is necessary to authorise the deployment of technical protection measures to restore the balance between, freedom to make copies for private use and exclusive copying rights.
Despite permanent access to online works, downloading, storage and private copying for offline use is continuing, a private copying levy system cannot therefore in every case be replaced by a licencing system. However, preference should always be given to licencing models if no copies of the copyright work are saved on the user’s terminal equipment and where the rightholder already receives a fair share of proceeds through licencing models, there is no need for an additional flat-rate levy.
The concept of private copying levies is founded on the false assumption that consumers who make private copies would otherwise have bought multiple licensed copies of the same audio, visual or audio-visual material. The private copying levy is paid by consumers when purchasing recording or storage media or services irrespective of whether the intended use of those media or services is for the purpose of private copying of audio, visual and audio-visual material. The private copying system is an outdated system that should be substituted for a modern and harmonized system of copyright and related rights which strengthens the position and choice of artists and creators whilst creating a dynamic society where creative works can be easily accessed and built upon by artists and consumers alike, for example by permitting the right to freely make copies for private use.
In the case of online music sales, licence-granting practices represent an alternative to the system of private copying levies. The current private copying system, which seeks to balance the right to copying for private use with fair remuneration to rightholders, should be fundamentally rethought and in the long term replaced by a more efficient system that keeps step with the developments brought about by digitisation. Because of permanent access to online works, downloading, storage and private copying for offline use will decline without, however, becoming negligible, licencing systems therefore will become increasingly important.
Cecilia Wikström, Christian Engström, Lidia Joanna Geringer de Oedenberg
The pervasive nature and ubiquitous presence of digital works makes calculation of levies on the basis of the possible harm to the rightholders resulting from the private copying act an impossible task. Media and material prices do vary according to the different rates of private copying levy applied across the Union. Manufacturers crosssubside levies across the EU in cases where levies are a very significant proportion of the purchase price of a device.
Copyright law should balance the interests of inter alia creators and consumers; all European consumers should have a right to make private copies of legally acquired content. Private copying of legally acquired content constitutes a normal use of the acquired products or services by the consumer which does not harm the legitimate interests of right holders and which should thus not warrant any compensation. Licensing provisions should not limit the legal rights of citizens to make private copies of legally acquired content. In times of budget austerity, private copying levies constitute a substantial cost for consumers without providing a socially accepted source of revenue for the cultural sector. It is advised to eliminate the technical protection measures which would impede the freedom of citizens to make use of their legal right to make copies for personal use as it also undermines a fair remuneration of artists.
It is advised to the Member States to phase out private copying levies and to look for common ground as regards to which products should not be subject to the levy and to harmonise the negotiating arrangement for agreeing on the rates of decrease of private copying levy rates. Also it is advised to the Member States, in consultation with all stakeholders, to simplify procedures for the phasing out of levies in such a way as to ensure fairness and objectivity and to earmark at least 25% of revenue from private copying levies to promote the smooth phasing out of the system as a whole and to publish reports on the allocation of resources for the smooth phasing out of the system as a whole.
Storage and copying of works for offline use is increasing with increasing storage capacity of storage media, a private copying levy system cannot therefore be upheld and has to be phased out. The modern digital economy is providing a large multitude of online services where some services technically require copying of the content and others do not and where some of these services would thus be subject to private copying levies and others would not. Private copying levy system should therefore be phased out in order not to discriminate between services.
Private copies of protected works made using new cloud computing technology may have new purposes as compared to those made using traditional and/or digital recording media and materials, such new media and services therefore should not be included in current private copying compensation mechanisms. It is advised 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 excluded from private copying compensation mechanisms.
Cecilia Wikström, Christian Engström
The major disparities between national systems for the collection of levies, especially as regards the types of product subject to the levy and the rates of levy, distorts competition, incites double payment of levies, impedes the proper functioning of the internal market and deteriorates the support for copyright among citizens. Private copying levies should be payable by the final retailer and not the manufacturer as a short and medium term measure to reach the goal of a completely phased out levy system. If the levy were transferred to retailers, this would support the development of new technologies for content delivery which reduce administrative burden for small and medium-sized distribution companies as well as collective rights management organisations. Private copy levies never have to be paid where the media in question is used for professional purposes and various arrangements for the reimbursement of levies paid for professional users should be replaced with systems which guarantee that these users are not liable to pay the levy in the first place.
Lidia Joanna Geringer de Oedenberg
The notion of private copies should be clearly defined for all materials and the user should be able to access the copyright content on all media on the basis of a single payment; arrangements already in force in Member States, such as exceptions and levy exemptions, to be respected and for it to be possible for them to apply in parallel on the market. Private copying levies should be payable by retailers, as this would simplify procedures and prevent double payments.
There are now virtually no European manufacturers or importers of traditional and digital recording media and material; the non-European companies operating on the market today usually transfer their operations to sites enabling them to produce ever more cheaply; and these levies only constitute a small proportion of their turnover. When the prices at which material sells in a country that charges the levy are compared with those in one that does not, it becomes clear that the private copying levy has no appreciable impact on the prices of products.
The private copying levy should apply to all material and media whose value resides in their private recording and storage capacity and their use by consumers to copy protected works. Confirmation at EU level is needed that the country of destination rule applies where cross-border transactions are concerned; the harm to be made good is brought about not by the movement of recording media, but by the reproduction carried out on those media by a natural person for a private use; the distance seller must therefore be liable for payment of the levy chargeable under the law of the country where the media are purchased by the end users.
The principle of precluding any double payment of private copying levies where sales involve several Member States to be recognised at Community level; it is recommended, in this regard, that systems be established that provide for, on the one hand, the reimbursement or exemption of manufacturers and distributors where the levies paid concern exported products which had not been made available on the national market and, on the other hand, the possibility for rightholders to carry out checks and audits to determine the quantity of products imported, exported or made available on national markets.
Technical protection measures should not prevent consumers from making copies or rightholders from being fairly remunerated for private copying. The enforcement of exclusive rights, which is the primary means of exercising copyright and related rights, particularly in the digital environment, does not allow effective and proper control over the private use of protected works and items.
It is advised to the Commission to assess the impact on private copying systems of the use of cloud computing services for private recording and storage of protected works, so as to determine how these private copies of protected works should be taken into account by private copying compensation mechanisms; it is necessary to look into the legal arrangements for cloud computing services as regards the principles of intellectual property.
The Commission is invited to conduct a study on the essential elements of private copying, including the concept of ‘fair compensation’, which at present is not explicitly regulated by Directive 2001/29/EC, and the concept of ‘harm’ to an author resulting from unauthorised reproduction of his or her work for private use; the Commission is invited to study the possibility of finding common ground as regards which products should be subject to the levy and to harmonise or, failing that, coordinate the negotiating arrangement for the rates applicable to private copying. Private copying exception arrangements should apply to certain online services, including certain cloud computing services.
The private copying levy should apply only to material, media and services that are used exclusively or almost exclusively for private recording and storage.