CJEU: Spain’s compensation scheme for private copying does not comply with the EU InfoSoc Directive

Today the Court of Justice of the European Union (CJEU) has rendered its decision in Case C-470/14 (EGEDA and Others v Administración del Estado and Others), which is related to the implementation of the private copying exception in Spain. The proceedings started when a number of Spanish CMOs, including IFRRO’s member CEDRO, opposed the decision of the Spanish Government in 2012 to pay the fair compensation for private copying directly through the State budget.

The CJEU in today’s decision confirms that the Spanish system is not compatible with EU law; according to the official press release, the Court decided that “the directive precludes such a scheme in so far as the scheme does not guarantee that the cost of the fair compensation is ultimately borne by the users of private copies”. The Court concludes that “in the present case, the Tribunal Supremo (Supreme Court) states in the order for reference that the scheme for financing the fair compensation from the Spanish budget does not guarantee that the cost of the compensation is ultimately borne solely by the users of private copies” and is therefore not compliant with EU law.

Importantly, it is highlighted in the press release that the Court does not rule out the possibility to compensate private copying through state funding as such: “the  Court  emphasises that the  directive  does  not,  in  principle,  preclude  Member States  which  have  decided  to  introduce  the  private  copying  exception  from  opting to finance  it from  their  budget […] provided  that  such  an  alternative  scheme  guarantees  the  payment  of  fair compensation  to  rightholders, on  the  one  hand, and that  its  detailed  arrangements  guarantee actual  recovery  on  the  other”.

Olav Stokkmo, the CEO of IFRRO, acknowledged that the decision was “not a surprise to us; IFRRO has always argued that the Spanish system to compensate the private copying exception was not compliant with the InfoSoc Directive”.

Find the press release here and the full decision here.