Spanish Supreme Court refers case on private copying levies to CJEU

On 18 September 2014, following an administrative appeal against the Royal Decree 1657/2012, filed by the Spanish CMOs VEGAP, EGEDA and DAMA concerning the legitimacy of the Spanish system of private copying levies, the Spanish Supreme Court has referred the following two questions to the European Court of Justice: 

1. Is a private copying compensation system, that – taking as a basis the estimation of the actual damage – is financed through the State budget, thus not guaranteeing that the costs of this compensation are only supported by the users of the private copies, compliant with Article 5(2)(b) of Directive 2001/29/EC?
 
2. If the answer is in the affirmative, is it compliant with Article 5(2)(b) of Directive 2001/29/EC that the total amount set aside by the government for this compensation, which is calculated on the basis of an estimation of the actual damage, is conditioned on the budget restrictions for each financial year?
 
The Royal-Decree 20/2011 (in force as of 1 January 2012) established  that the compensation for private copying would no longer be on the basis of a levy on reproduction devices, but rather obtained from the State budget (fixed at EUR 5 million per year for 2012 and 2013). Objective criteria for the calculation of the respective amount were set by Royal Decree 1657/2012 (in force as of 8 December 2012); its calculation and payment are being implemented every year. The procedure to determine the amount for 2013 in favour of authors, publishers, producers and performers is still in progress.
 
At the same time, the Spanish Copyright Act is currently being amended, with the High Chamber expected to pass the text in October. The amendment law as passed by the Low Chamber includes a severe reduction of the scope of the exception for private copying. If the High Chamber confirms the new definition of the private copying exception, the remuneration to be paid in the future is expected to be considerably lower, and the outcome of the case referred to the CJEU might, in the end, turn out to be of less importance for the calculation of the private copying remuneration in Spain. 
 
The Spanish Supreme Court’s referral to the CJEU is here (in Spanish).