Friday 28 September 2012

Should private copying levies apply to the cloud?

A European Commission Cloud Computing Strategy document leaked on Monday says that "questions arise on the possible collection of private copy levies for any private copying of content to, from or within the cloud."

Things were simpler back in the day
Under the InfoSoc Directive, EU member states may introduce an exception to the reproduction right for private copying accompanied by "fair compensation" for rightsholders. Currently most EU member states (notably not the UK) permit such private copying. Legislation does not provide a method for the calculation of fair compensation. The approach adopted in the EU so far has been to impose private copying levies on sales of storage media such as blank CDs, memory sticks, hard disks and smartphones. The levies typically vary with the capacity of the medium.

It makes some sense that, in countries where the levy system is in place, the cloud should also be subject to such a levy, given that one use of the cloud is to store content. However arguably the cloud is primarily a storage place for legitimately acquired content. In that sense it is the original CD that is purchased, rather than being the blank CD onto which a copy is made.

Some cloud storage services that allow users to synch their content for different devices, such as iTunes Match, Spotify's Local Music Files and Kindle already directly remunerate the rights holders.

A further consideration is that  there is no limit to the memory capacity available in the cloud to a user. It is therefore difficult to work out the value of the levies that should be applied.

The Commission has said that it will "assess whether there is a need to clarify the scope of the private copying exception and the applicability of levies, in particular the extent to which cloud computing services allowing for the direct remuneration of right holders are excluded from the private copy levy regime."

The levy system is a controversial one. One the one hand the creative industry trade bodies have just signed a declaration calling on European politicians to ensure that private copying levies remain part of the copyright system in European countries where a private copying right exists. And just yesterday IMPALA, the European independent music companies trade body joined forces with international copyright representatives to argue in favour of remuneration related to private copying.

On the other hand Joe McNamee, of European digital rights group EDRi has said that "It's really quite amazing that the Commission put levies in the strategy in the first place as levies as they stand are an insult to the single market, and for the Commission to add another level of bureaucracy is incomprehensible", and Christian Engstrom, Pirate Party member of the European Parliament is of the view that "It's yet another example of how copyright legislation is completely out of touch with the reality and the times we live in."

Former European Commissioner for Justice and Home Affairs, Antonio Vitorino, is currently leading a. The aim is to lay the groundwork for legislative action on private copying levies at the E.U. level in 2013. His findings are expected by the end of the year.
Perhaps we will find clarity in the CJEU's responses to the questions on private copying referred by the Austrian courts in in June and the Dutch courts in ACI Adam B.V. v Stichting de Thuiskopie last week on how the private copying exception applies to illegal content, and in the findings of the working group on private copying levies that was set up in November 2011 with a view to more harmonization across the EU.

More on this on CIO and PC Advisor's websites.

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