On September 8th 2022, the Court of Justice of the European Union issued its ruling in the case between the Federation of the Spanish Digital Industry sector (AMETIC) and Ventanilla Unica Digital (VUD), the Spanish one-stop-shop for the collection and distribution of the private copy levy (C‑263/21).

AMETIC had brought that case before the court hoping for the declaration of the illegality of the one-stop-shop that the collective management organisations for performers, authors, producers, and publishers had set up together to collect and distribute the private copy remuneration in Spain. The court completely dismissed the complaint in a short and unquestionably clear judgment.

While in almost all European member states the collection and distribution of the private copy levy has been running without problems for years via a one-stop-shop set up by the collective management organisations of the different categories of right holders: performers, authors, producers and publishers, in Spain this is only a recent phenomenon.

Until its abolition in abolition in 2016, Spain had financed the private copy remuneration from its General State Budget. In 2017, a royal decree obliged the Spanish CMOs to set up a one-stop-shop (VUD) to organise the collection and distribution of the private copy levy directly with the users. And in 2018 a second royal decree determined the conditions under which VUD had to organise the exemptions and reimbursements to which certain users were entitled (see C‑467/08 Padawan).

AMETIC was of the opinion that the fact that the granting of the exemptions and reimbursements was done by VUD itself constituted a conflict of interest. It considered it unlawful that there is a legal obligation for VUD to consist of the copyright management entities only and claimed that VUD had exorbitant powers, by virtue of which it can demand from applicants for an exemption or reimbursement, specific information on their activities.

This led to a twofold reference for a preliminary ruling by the CJEU.

1. Is the composition of a one-stop-shop, as imposed by Spanish law, compatible with Directive 2001/29/EC or, more generally, with the principles of the EU Law?
2. Is it compatible with Directive 2001/29/EC or with the general principles of EU Law to grant such one-stop-shop the power of requesting information, including accounting information, from those who apply for the certificate of exemption from the private copying compensation payment obligation?

In its judgment, the CJEU is very short and clear in stating that the exemption and reimbursement are rightly regarded as part of the general task of collecting and distributing the private copy compensation for right holders and that this task can only be assigned to organisations that represent those same right holders and are under their control. The court additionally confirms that this organisation can only perform such task correctly if it has the correct information to check whether an exemption or reimbursement is justified in accordance with the legally determined parameters and that the organisation has no discretion in this regard, but can only perform an objective control of those parameters.

As a result, it rules that:

1. The European Copyright framework and the principle of equal treatment must be interpreted as not precluding national legislation under which a legal person established and controlled by intellectual property rights management organisations is entrusted with the management of (i) exemptions from payment in respect of compensation for private copying and (ii) reimbursements in respect of such compensation […].
2. The European Copyright framework and the principle of equal treatment must be interpreted as not precluding national legislation which empowers a legal person, which is established and controlled by intellectual property rights management organisations […] to request access to the information necessary for the exercise of the powers of review conferred on it in that regard […].

AEPO-ARTIS welcomes this ruling. “This judgment positively confirms the legality of the model in use in most Member States whereby CMOs of performers and other right holders join forces to provide users with a transparent, user-friendly and non-discriminatory service that allows them to fulfil their obligations towards right holders.” says Ioan Kaes, General Secretary of AEPO-ARTIS.

The Spanish performers’ CMOs also reacted positively. “This decision is great news to improve the development of private copying in Spain. Together with the recently signed agreement with equipment manufacturers and importers to increase levies 50% we are convinced that we can reinforce the efficiency of the management of performer rights” says José Luis Sevillano, General Director of AIE.

“The decision is extremely positive not only for Spanish CMOs, but for all other European CMOs and the right holders they represent. From this decision it is now clear that national legislations in the EU may provide the possibility of CMOs to incorporate a “one-stop-shop”, controlled by such CMOs, for the management of private copy levy, including the exceptions from payments and the eventual reimbursements. And, more importantly, the decision declares that such “one-stop-shop” should be able to carry out verification processes, with no possibly for the manufacturers to refuse access to the corresponding accounting information, alleging the confidentiality of their business accounts.” says José Maria Montes, Director of Legal and International Affairs at AISGE.

Read the full decision on the website of the CJEU.

On July 20th, Commissioner Thierry Breton, responded to a Parliamentary Question that was tabled in March 2022 by the Cultural and Creators Friendship Group (CCFG).

The question concerning article 18 of the Copyright Directive (2019/790) which puts on the Member States the obligation to “ensure that where authors and performers license or transfer their exclusive rights for the exploitation of their works or other subject matter, they are entitled to receive appropriate and proportionate remuneration” and grants them the freedom “to use different mechanisms and take into account the principle of contractual freedom and a fair balance of rights and interests.”

This article 18 is linked to the general objective of the directive “to adapt and supplement the existing Union copyright framework, while keeping a high level of protection of copyright and related rights” in order to face the “rapid technological developments that continue to transform the way works and other subject matter are created, produced, distributed and exploited.” (Recital 3).

As advocates of a high level of protection for performers, AEPO-ARTIS and all its members have been calling upon all Member States to implement this article not with a literal copy-paste of the wording , but with effective mechanisms. We have always promoted the introduction of an unwaivable remuneration right for the making available of our performers’ work to increase their level of protection in the online environment. For performers the system of an equitable remuneration for streaming exploitations is the best possible way to increase their chances to make a living out of their profession.

The resistance we felt against this proposal has always been great. Certain stakeholders from the creative industries did not see their own business model of maximisation working in a landscape where part of the streaming remuneration would be paid directly to the performers. They sometimes went so far as to state that equitable remuneration is not equitable at all. But the argument most used was that a system of an unwaivable right to remuneration would not be in conformity with the directive, a statement that never received any legal justification, but did have an impact on the debate.

There is therefore no doubt that we warmly welcome Commissioner Breton’s response. It is not only a theoretical response, but also one with practical implications.

In his response Breton confirmed that “the Commission considers that, in principle, Member States could transpose article 18 through an unwaivable remuneration right”, provided that this “complies with relevant EU law, including the principle of contractual freedom, fair balance of rights and interests, and the exclusive rights in the copyright acquis”. The last of these has always been a central part of the proposals made by AEPO-ARTIS and its members at European and national level.

A different answer could not really have been expected. Unwaivable remuneration rights are already known in EU law and a remuneration right for the act of making available can therefore be perfectly integrated into the national legislation of each Member State. Spain, Italy and Hungary had already done this. Belgium and Germany, among others, have added this as part of their implementation of the directive. It is now clear once and for all that these countries have acted in accordance with the directive.

His answer also confirms that a literal implementation can never be seen as a correct implementation. This is clear from his statement that “Any provision implementing article 18 should secure appropriate and proportionate remuneration to authors and performers”, something that the literal copy-pasting of the wording of Article 18 (which several Member States have already done) does not achieve.

AEPO-ARTIS and its members will make every effort in the coming months to inform Member States that have yet to transpose the directive that an unwaivable remuneration right is indeed a choice that is in conformity with the Copyright directive. Moreover, we will point out to them that this is by far the most effective way to transpose Article 18 of the directive into national law and so far the only way to guarantee that the growing digital market acquires a place in the revenue model of every performer.

With Czech Republic taking over presidency of the European Union, AEPO-ARTIS wrote an open letter to the Czech President with the goal to draw attention to the important issue of improving performer’s rights.

Read the full letter below.

Dear President,

Dear Mr Zeman,

In the next six months, the Czech Republic will hold the presidency of the Council of the European Union. We are grateful for the ambitious programme and we are confident that the Czech Republic will achieve its goals, especially when it comes to culture.

AEPO-ARTIS is a non-profit making organisation that represents 37 European performers’ collective management organisations from 27 different countries, including the Czech organisation INTERGRAM. The number of performers, from the audio and audiovisual sector, represented by our 37 member organizations can be estimated at 650,000.

We are happy to read that the Czech Presidency will strive to continue to prioritize the status of the artist. The protection of individual artists is the absolute starting point of a vibrant and strong culture. And the intellectual property rights of our individual artists are central to this.

In its October 2021 resolution on the situation of the artist, the European Parliament identified the so-called Copyright Directive (Directive 2019/790) as crucial for the recovery of the cultural sector and pleaded for its immediate implementation by all Member States, in particular to ‘guarantee fair, appropriate and proportionate remuneration for authors and performers.’

This directive was adopted by the European institutions in April 2019 as one of the pillars for a fair digital single market. However, half of the Members States, including the Czech Republic, still have to implement this directive.

Recently the Commission initiated the second step in the infringement procedure against the Member States that will have to implement during your Presidency and will look to the Czech Republic for guidance. Since the Czech draft is an example of a literal transposition, we ask you to review this approach and take a different path together with the other Member States.

The choice for a literal transposition by means of a mere copy/paste of the directive into national legislation is a choice against performers and a curtailment of their possibilities to make a living out of the online exploitation of their work.

The directive (recitals 3, 72-73) is very clear in the fact that the new online exploitation possibilities should be a source of income for all right holders. It emphasises the need to adapt and supplement the existing Union copyright framework, while keeping a high level of protection of copyright and related rights in the digital environment.

However, rather than offering new concrete rules, the European legislator refers to the balance that it has achieved through years of harmonization via various copyright directives and urges Member States to transpose this balance to the online environment. To this extent, articles 17 and 18 both introduce pro-active obligations and provide that “Member States shall” provide the mechanisms to guarantee the effectiveness of the principles.

Article 18 introduces the principle of an appropriate and proportionate remuneration for performers when they transfer their exclusive rights. In its resolution on the status of the artist, the EU Parliament stated that the implementation of this article must be accompanied by the introduction of effective mechanisms. AEPO-ARTIS is convinced that this objective can only be achieved when performers are protected with an unwaivable remuneration right. This mechanism already exists in all EU Member States for certain exploitations, but only a few have made it applicable to the making available right, which is the legal basis for the majority of online exploitations.

Article 17 obliges Member States to ensure that large platforms such as YouTube, Facebook and TikTok no longer hide behind the so-called safe harbour of the e-commerce directive. This article also does not provide any guarantee that revenues that result from this new obligation to pay, will be shared with the performers. It is up to the Member States to provide this. Here too, the introduction of an unwaivable remuneration right that performers can obtain through their collective management organisations is the best – if not the only – solution to guarantee that performers receive an appropriate and proportionate remuneration.

Even though it might look like the quickest way to avoid further steps in the infringement procedure, a literal implementation of these articles will not change the reality for European performers at all. The need for urgent transposition must not come at the expense of protecting the performers who are the face of our cultural sector.

Transposition must be accompanied by additional specific measures that will effectively achieve the goal of the relevant articles. It must be remembered that the Commission will carry out a conformity check to ensure that all Member States have transposed the directive in a way which is compliant with the obligations the directive creates. Member States that do not include these additional specific measures may fail this conformity check and will leave themselves open to future infringement proceedings from the European Commission.

We hope that the Czech Presidency will succeed in guiding all Member States towards a correct transposition of the directive in the next six months, starting with a correct implementation in your own country.

An example of a country which has correctly introduced the necessary additional specific measures and has therefore properly implemented the directive (on 16 June 2022) is Belgium. It rightly resisted pressure to opt for a literal transposition and although this meant that it failed to respect the deadline for implementation, it succeeded in both improving the rights of performers and complying with the requirements of the directive. In brief, it has achieved an effective and compliant transposition of the directive and received the full support of the different artist communities throughout Europe.

Finally, we hope that during your presidency the EU can work on eliminating the last existing discriminations between actors and musicians. Firstly, by extending the term of protection for audiovisual performances to 70 years in the context of the revision of Directive 2011/77. There is no explanation whatsoever why audiovisual performances are still protected for only 50 years, while musical performances can count on 70 years. Secondly, by achieving a breakthrough in the ratification of the Beijing treaty by the European Union.

For musicians and actors, the digital environment of on-demand and streaming is still the place where they are least protected. During your presidency they must not be forgotten as a category of digital stakeholders that need economic protection. 

Provide those who give European culture a face, with the economic protection they deserve. Not with words, but with actions. Give European artists a digital future by implementing the Copyright Directive with the same dedication and passion they make your culture! And without allowing any further discrimination to exist.

On behalf of every musician and actor whose performance you have ever appreciated. 

Ioan KAES

General-Secretary