The current legal framework is silent on what constitutes ‘harm’. It merely refers to ‘harm’ as a valuable criterion in the calculation of the fair compensation (Recital 35 of Directive 2001/29/EC). The Court of Justice of the European Union, however, affirmed that the fair compensation must necessarily be calculated on the basis of the criterion of the ‘harm’ caused to authors of protected works by the introduction of the private copying exception. The Court did not clarify, however, what exactly should be understood under the notion of ‘harm’.
In order to guarantee more coherence and predictability in the process of setting tariffs, it would be sensible to ensure that the concept of ‘harm’ is interpreted uniformly across the EU. In particular, one needs to assess the value that consumers attach to the additional copies of lawfully acquired content that they make for their personal use. It would allow the estimate of losses incurred by rightholders due to lost licensing opportunities (‘economic harm’), i.e. the additional payment they would have received for these additional copies if there were no exception.
Although such a definition of ‘harm’ is, at its most basic level, not contested by the majority of stakeholders, it seems that views on its practical implications diverge. Some stakeholders are of the opinion that once ‘harm’ is defined uniformly in the above manner, it would still simply refer to the number of copies made by consumers under the private copying exception, and all of them would need to be fully be taken into account when setting the levies.
For others, the definition of ‘harm’ outlined above implies that the customers’ willingness to pay for additional copies decreases proportionally to their number and that, therefore, the hypothetical licence-fee(s) which the rightholder would have obtained – had there been no exception – decreases with each additional copy made.
Such an approach also seems to imply that, in many instances, the value of each additional copy could be so small that the ‘harm’ sustained by the rightholders should be considered as minimal, with no compensation obligation arising. Accordingly, it would be necessary to assess not the actual number of copies made but rather the hypothetical (lower) number of copies that could have been licensed in the absence of the exception.
Since the main rationale underlying the private copying exception is linked to the practical difficulty of the licensing of copies made by consumers for their private use, it is fair and reasonable to compensate rightholders precisely for lost income opportunities, e.g. via the licence agreements they would have concluded if there were no exception.
Moreover, it would be justified for the level of compensation to reflect the actual value attached by consumers to such additional ‘private’ copies. The latter also depends on the form in which the copyright protected content is copied (analogue/digital). For instance, the value a consumer attaches to the fact that he can copy a book (instead of acquiring a subsequent copy of it) is different from the one he attributes to the possibility of copying a CD on multiple devices being in his possession.
Ensure more coherence with regard to the process of setting levies by defining ‘harm‘ uniformly as the value consumers attach to additional copies in question (lost profit)