'Indiscriminate' Austrians may claim private copying levy off Amazon, says CJEU

Also decided by the Court of Justice of the European Union yesterday was a 67-paragraph ruling in Case C‑521/11, Amazon.com International Sales Inc., Amazon EU Sàrl, Amazon.de GmbH, Amazon.com GmbH, in liquidation, Amazon Logistik GmbH v Austro-Mechana Gesellschaft zur Wahrnehmung mechanisch-musikalischer Urheberrechte Gesellschaft mbH. There seem to be a lot of Amazons around and, since time is pressing, this Kat will content himself with this short post based on the Curia press release in the hope that, if there are any more subtle legal issues at stake, one of his feline colleagues who is better attuned to copyright will elaborate upon it.

"The indiscriminate collection of a private copying levy on the first sale of recording media may, under certain conditions, be compatible with EU law

In addition, under certain conditions, there may be a rebuttable presumption that recording media sold to individuals will be used for private purposes

According to EU law [Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society -- the InfoSoc Directive], the Member States grant, in principle, authors, performers, producers and broadcasting organisations the exclusive right to authorise or prohibit the reproduction of their works, fixations of their performances, their phonograms, their films and fixations of their broadcasts. However, the Member States may provide for exceptions or limitations to those exclusive rights. Accordingly, they may permit, in particular, the making of private copies [and plenty of them do]. A Member State which avails itself of this option must, however, provide that the rightholders receive ‘fair compensation’ [note the use of quotation marks: this is a legal term art. 'Fair compensation' is not to be confused with fair compensation]. That compensation is to compensate rightholders for the reproduction, without their authorisation, of their protected works or other protected subject-matter.

In Austria, that fair compensation takes the form of a private copying levy which is collected on the first sale of recording media suitable for reproduction, such as blank CDs and DVDs, memory cards and MP3 players (the so-called ‘blank cassette levy’).

"That will be exactly
€1,856,275 please!" 

Austro-Mechana, an Austrian copyright collecting society, brought an action against Amazon before the Handelsgericht Wien (Commercial Court, Vienna, Austria) for the payment of the blank cassette levy for recording media sold in Austria from 2002 to 2004. It claimed an amount of €1,856,275 [A remarkably precise sum, notes Merpel, who wonders what sort of accounting exercise led to it and what sort of data was provided, by Amazon or anyone else, for it to be calculated with such precision] for the first half of 2004 and sought an order requiring Amazon to provide the accounting data necessary for it to quantify its claim for payment for the remainder of that period. The Handelsgericht Wien granted the application for an order to produce accounts and reserved its decision on the claim for payment. That judgment was upheld on appeal. Amazon, which is of the view that the Austrian blank cassette levy is, for various reasons, contrary to EU law, brought the matter before the Oberster Gerichtshof (Supreme Court, Austria). That court seeks a ruling from the Court of Justice on the interpretation of the relevant provisions of EU law.

The indiscriminate collection in Austria of the blank cassette levy on the first sale of recording media and the possibility of reimbursement in certain cases

The Court observes in this connection that EU law does not allow the private copying levy to be collected in cases where the intended use is clearly not the making of private copies. However, under certain conditions, EU law does not preclude such a system of a general levy with the option of reimbursement in cases where the intended use is not the making of private copies. It is accordingly for the Oberster Gerichtshof to verify in the present case, taking account of the circumstances of the Austrian system and the limits imposed by EU law [again, the InfoSoc Directive], whether practical difficulties justify such a system of financing of fair compensation and whether the right to reimbursement is effective and does not make repayment of the levy paid excessively difficult. 

The possibility of a presumption of private use of recording media sold to individuals

The Court finds that there may be a rebuttable presumption that individuals are using recording media for private purposes, provided that two conditions are fulfilled: (i) practical difficulties in determining whether the purpose of the use of media is private must warrant the establishment of such a presumption; (ii) that presumption must not result in the imposition of the private copying levy in cases where those media are clearly used for non-private purposes [both (i) and (ii) must be fulfilled -- it's not n either/or situation].

The payment of half of the income from blank cassettes not directly to those entitled to fair compensation but to social and cultural institutions set up for their benefit 

The Court observes that such payment does not allow the right to fair compensation, or the private copying levy intended to finance it, to be excluded, provided that the social and cultural establishments actually benefit those entitled and the detailed arrangements for the operation of such establishments are not discriminatory, which it is for the Oberster Gerichtshof to verify. 

No account taken of a private copying levy already paid in another Member State 

The Court’s answer is that the obligation to pay a levy such as the blank cassette levy may not be excluded by reason of the fact that a comparable levy has already been paid in another Member State. A person who has previously paid that levy in a Member State which does not have territorial competence to collect it may request its repayment in accordance with its national law [Merpel is puzzled by this.  What is the European Commission's position, she wonders on the likelihood of having to pay twice and its impact on traders and consumers within the Single Market?]".