AMETIC demands a more efficient equitable compensation model in the face of a new digital fee

The employers' association requests that the Government make an effort of analysis and collaboration to adopt the most efficient equitable compensation model that guarantees the protection of intellectual property.

Given the hypothetical return to the so-called digital canon, AMETIC reiterates that the Court of Justice of the European Union (CJEU) supports that the compensation system for private copying can be charged to the General State Budgets. In June 2016, the CJEU issued a ruling in relation to the preliminary rulings referred by the Spanish Supreme Court regarding the equitable compensation system in force in Spain since 2012.

At the end of 2011, the rulings of the CJEU and the National Court of Barcelona indicated that the equitable compensation system applied to certain recording media and devices purchased by consumers did not maintain a “fair balance” by not taking into account the damage actually caused by private copying. For these reasons, the Spanish Government decided to replace the payment model with a new financing model consisting of compensating the holders of intellectual property rights who are beneficiaries of said compensation, charged to the General State Budgets for legitimate copies made by consumers. For the calculation of compensation, the rule in force states that the damage actually caused must be taken into account.

In its decision, the CJEU highlights that, although the most commonly chosen system of financing equitable compensation is that of payment for recording and copying devices, the Directive does not prevent Member States that have decided to introduce the private copying exception from choosing to finance it from their general budgets (a solution that has also been adopted in Estonia, Finland and Norway, as well as in Spain), provided that this system guarantees the payment of equitable compensation in favor of the right holders, which its modalities guarantee. its perception and the legal entities are not effective debtors of the corresponding tax, but this is only borne by the users of private copies.

Since the rulings of the CJEU are binding on the national legal body that raised the preliminary questions, the Supreme Court has taken into account the response received in its decision.

Next steps

AMETIC has among its partners the main companies in the information technology, telecommunications and digital content sectors. This sector brings together many of the national and international companies that generate and make available to users a good part of the creative content, technologies and services that make up the digital era.

As a representative of the industry, AMETIC claims to be deeply committed to intellectual property and to the promotion of sustainable models and legitimate defense of rights holders. It is important to provide the system with rules that facilitate the development of new business models that have emerged in the digital economy, taking into account fair remuneration and protection for the authors of creative and cultural content.

The recent ruling of the Supreme Court that, applying the ruling of the CJEU, annuls the RD that regulates the procedure for paying equitable compensation from the PGE, implies that a process of adaptation of the system must be carried out to adapt it to European regulations and not necessarily annul it and replace it with another, as required by the management entities. The CJEU indicated that the previous system of equitable compensation through a “digital fee” was not based on the prejudice actually caused.

In AMETIC's opinion, during this process an analysis and collaboration effort must be made to adopt the most efficient model that guarantees the protection of intellectual property, while promoting the rapid dissemination of new and legitimate business models.

In this sense, the general director of AMETIC points out that "in any case, the compensation system must take into account the criteria established in Directive 2001/29/EC, that is, that the compensation is equitable, if the damage caused is minimal, it cannot give rise to an obligation to pay and technological measures must be taken into account. In short, the damage actually caused must be calculated."

AMETIC considers, in short, that a system that guarantees that the equitable compensation that corresponds to the authors is borne by natural persons and non-legal entities, such as by modifying the VAT or personal income tax systems, can be an effective tool that does not distort the market and that allows, at the same time, the effective receipt of equitable compensation for private copying by the owners of intellectual property rights.