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    Adapting the private copying system to the digital era

    Not just CDs and DVDs

    Many accuse private copying levies of belonging to a bygone age of audio-cassettes and VHS but more copying for private use takes place now than ever before. The devices and media which enable or host private copies of protected works have increased, with storage capacities which have surged exponentially (new iPad of 128 Go, external hard disks of 5 To, etc.).

    Consumers transfer songs and videos from computers to hard drives to phones to tablets to online lockers and back again in order to save and access their personal libraries whenever and wherever they want. All of these processes are undeniably acts of private copying.

    • In line with the principle of technical neutrality, copies made via cloud services (and other future digital services which do not yet exist) have the same purpose (private use) as the copies made by private individuals on their phones, tablets, etc. so should be included in the private copying system. 
    • Applying private copying to certain cloud-based services means that copies made on those specific cloud-based services would be taken into account by usage studies which assess the harm caused. 

    New business models in the digital environment

    One of Mr. Vitorino's recommendations in January 2013 (licensed copies do not cause harm) suggests that all subsequent copies made of a work following purchase from digital services can be covered by licenses granted by rightholders to these services. He is therefore proposing to eliminate levies for "new business models in the digital environment".

    This is based on a gross misconception of both the private copying system and the multitude of new digital services which provide access to protected works. Private copies cannot be licensed since they are covered by a statutory exception to copyright under the 2001/29 Copyright Directive. Therefore licensing and fair compensation for private copying can only be separate issues.

    Moreover, if the private copying exception was questioned and private copies inserted into licences, the ones that would suffer most from such a change would be consumers and authors, the consumers losing their freedom to copy and the authors their fair compensation.

    • In practice, the authorisation, licence fee and commercial terms are negotiated by the holders of exclusive rights with each digital service during the licensing process, whereas fair compensation is collected through the levy system and distributed to rightholders by CMOs. 
    • Mr. Vitorino's proposal derives from the flawed idea that digital services would allow rightholders to be compensated directly. In practice, only few rightholders or categories of rightholders grant licences to digital services. Other rightholders, such as audiovisual authors who transferred their exclusive rights to the producer for a lump-sum payment, do not have any direct relation with digital services and therefore, no possibility to be paid directly. 
    • In this field, a huge advantage of the private copying system is that it corrects inequalities between rightholders and guarantees that each category of rightholders benefits from a fair share of the value.

    Double payments

    Consumers should never pay twice for the same thing. Digital services should not license private copies when these are covered by an exception.

    Furthermore, in the case where manufacturers/importers pay a private copying levy twice on the same equipment as part of a cross-border sale for example, then systems exist to ensure reimbursement of one of these payments. The CJEU ruled that levies are due in the country of residence of the private user since that is where the harm arises. The rightholders' proposal to introduce a single declaration point would facilitate declaration and payment procedures by manufacturers/importers.

    • During the 2008-2009 dialogue, under the aegis of the European Commission, rightholders and the ICT industry agreed on principles regarding export refunds and exemption schemes. In addition, they proposed that these principles be accompanied by means of audit and control of declarations and the information needed to ascertain the quantities of products subject to refund or exemption. 
    • In line with the CJEU approach in the Opus-ruling (C-462/09), Mr. Vitorino concluded in his recommendations that in the case of cross-border transactions, levies should be collected only once, in the country in which the final user resides, since the harm suffered by the rightholders arises there. 
    • The Austro-Mechana-CJEU ruling (C-521/11) clarified the country of destination principle. It was held that the obligation undertaken by Member States to pay fair compensation, when putting into circulation recording devices and media which could be used to carry out reproductions for commercial purposes and in return for a fee, or the private copy levy intended to finance it, may not be excluded even if a comparable levy has already been paid in another Member State. In such a case, it is up to the Member States to provide for reimbursement.