Private copying levies and cloud computing

ICMP strongly supports the principle of fair compensation to rightsholders for harm caused by mass private copying of protected works, as recognised by the EU. This compensation is a significant source of income for composers, lyricists, publishers and other rightsholders, particularly where sustainable business models of online content are still developing. Private copying levies should therefore be set at a level that ensures fair and adequate compensation for rightsholders.

Levies exist to compensate rightsholders for the harm that is likely to arise for private copying practices relating to musical works. However, levies are not compensating rightsholders properly. The levy payment is due on devices and equipment but is not related to specific works being copied. Therefore, licensing the reproduction of a work is always the preferred option where it is possible, practical and enforceable. It is also the best way to keep up-to-date with new online services and to ensure that rightsholders are remunerated fairly. As new online services develop, the possibilities for licensing increase. However, this does not in any way mean that levies should be eradicated.

Cloud Computing

With the development of new technologies, the concept of private copying as stated in EU Law can be interpreted differently, leading to legal uncertainty. In digital networks, the distinction between private and public use has become vague. For example, cloud services that enable users to store copyright content on servers hosted by a locker service provider and access it at a time that suits them, allow for a widespread sharing on the internet via links published on third party sites. Therefore, they are not private anymore. These types of services will continue to grow in the coming years. While ICMP welcomes these developments, we consider it essential to ensure a full protection of rightsholders’ rights.

This full protection is difficult to achieve if there is the legal uncertainty that we are now facing: the different cloud services currently available have developed different legal approaches and operate in different ways. For instance, some cloud services require customers to manually upload their music files and other data; others provide an automated copying service on behalf of the consumer; others outsource specific technical functions to other companies; etc.

The mechanics of these services, where and how data is copied and stored and who has access to the files are critical questions when determining the content to be licensed or the levy to be imposed to a particular activity. All this bearing in mind that the content to be distributed/stored is legal - ICMP is adamant that cloud services should not be used to “legalise” these illegal files without due negotiation with rightsholders.

ICMP believes that licensing should always be the preferred option. Whenever the licensing of a reproduction of a work is possible, practicable and enforceable, licensing should be the way forward. In our view, levies are the solution only when it is not possible to monitor or control the amount of private copying that is carried out. Furthermore, devices can be levied without prejudice to the licensing position of the cloud service. However, in all cases where there is an absence of a private copying exception, a license should be standard.

ICMP also believes that the digital distribution of copyrighted content, whose use should be subject to a license and/or a levy, could be greatly facilitated by the development of authentification systems and databases containing accurate and transparent information on author’s rights. In this regard, the GRD as an authoritative database containing this information could significantly contribute to the achievement of a private copying system in the EU that ensures the fair compensation to rightsholders for harm caused by mass private copying of protected works, as required by EU laws.