The most efficient and cost-effective way to collect levies is to do so at the earliest stages of the sales chain, i.e. the manufacture or import stage. Shifting the liability to pay the levies onto retailers would render the system extremely complex and costly since this would considerably increase the number of those responsible to pay the levies (from 500 currently in France, with a small number responsible for the bulk of the sales, to approximately 20.000 according to Copie France) and the means needed to ensure billing and control systems (Copie France believes that it would have to deal with 40 times more information).
This prime responsibility of manufacturers and importers must go hand in hand with joint liability for all entities throughout the chain of sales down to the final consumer in order to avoid potential fraud and unfair competition. European right holders' organisations are willing to create a single European declaration point for manufacturers and importers in order to make the declaration process even less onerous.
- The principle of joint and several liability of all players in the chain of sales was agreed between representatives of rightholders and the ICT industry during the 2008-2009 dialogue.
- Mr. Vitorino's recommendation to shift the liability to the retailers was vigorously opposed by Member States, rightholders and the retailers themselves. Being largely linked to professional uses, Mr. Vitorino proposed a much better alternative: the introduction of ex ante exemptions (see below).
- The proposal to create a single European declaration was put forward by European rightholders during the 2008-2009 dialogue, and agreed with the ICT industry. It aims to facilitate the implementation of the Opus-ruling of the CJEU (C-462/09). Via the European Central Point mechanism, distance sellers could submit declarations of sales of goods eligible to private copying levies at a single EU entry point, while the compensation would be invoiced and paid in the country of destination.
Devices and blank media can serve other purposes than for the private copying of protected works. This should be taken into account when determining tariffs applicable to devices used to make private copies. In addition, there are cases where certain devices and media will clearly not be used for the purpose of private copying. We talk of 'professional uses'. In this context, exemptions and reimbursement systems should be in place to ensure that these equipment do not support levies. However, exempting any business from private copying levies would be excessive since equipment bought by companies can also generate private copies. The determining factor is the nature of the use, not the quality of the purchaser.
- As recommended by the CJEU in the Padawan-ruling (C-467/08), professional uses should be excluded from payment of the levy, but not necessarily all purchases of professional users. Devices such as tablets or smartphones, despite being the property of a company, may well in fact be used by employees to copy protected works for private use. Recommending that private copying levies should apply exclusively to purchases by natural persons as private users would artificially reduce the scope of the private copying levy system.
- Exemption and refund systems for professional uses should be designed at national level in consideration of the specificities of the Member States concerned.
- The Austro-Mechana-CJEU ruling (C-521/11) confirmed that reimbursement schemes for the levies paid on devices that are not ultimately used for private purposes comply with EU law, as long as they are effectively applied and do not constitute an excessive burden for those who are entitled to reimbursement.
Consistent definition of products subject to levies
Leviable devices and blank media differ across Member States. Consequently, the same product can be subject to private copying levies in a Member State and not in another. Compensation systems should be in place for all devices and media whose value is increased by multimedia storage and playback features. Therefore, a consistent definition of devices and media subject to private copying levies in the respective Member States should be sought.
- The SAA and other rightholders organisations proposed during the 2008-2009 dialogue that all products (devices and media) able to be used to make private copies of protected works should be eligible for the private copying compensation scheme, with a list of products established and regularly updated at EU level. However, the interruption of the dialogue by the ICT industry did not end in any concrete result.
- The Vitorino mediation on private copying in 2012 was a missed opportunity since, despite suggesting a degree of harmonisation (such as regarding the definition of harm), Mr. Vitorino recommended Member State flexibility in the choice of devices subject to levies.
The levy setting process
European rightholders organisations agree that a quick and harmonised levy setting procedure should be developed across Europe. This would mean putting in place a European framework of definitions, principles and procedures to be respected by all Member States in the establishment of their levy setting process.
- Rightholders and the ICT industry agreed during the 2008-2009 dialogue on the need for a quick decision-making process in every country with a tariff (provisional or final) decided and applied within 12 months of the date of introduction of the product.
- Mr. Vitorino went further by proposing stricter time limits (decision re application of the levy within 1 month, application of provisional tariff within 3 months and final tariffs within 6 months).
- Rightholders and the ICT industry also agreed during the 2008-2009 dialogue that tariffs should be based on actual private copying which is eligible for compensation, i.e. based on the estimation of the actual and future quantity of private copies made by the consumer in each category of product to be levied.
- It was also proposed that actual and future private copying eligible for compensation should be evidenced through consumer behaviour surveys conducted (or commissioned) once a new product has achieved sufficient market penetration.
- Finally, rightholders, ICT companies and consumers should be fairly represented and participate in a transparent tariff-setting process.