NEWS CJEU rules Dutch ‘piracy levy’ invalid
Europe’s highest court has ruled that a system in the Netherlands that enables people to download music and fi lms without paying is not compatible with EU law.
In a judgment issued on April 10, the Court of Justice of the EU (CJEU) said the current Dutch system of a ‘piracy levy’ to compensate rights holders is unlawful.
Under Dutch law, the private downloading and copying of copyrightable material, including movies and music, is seen as fair use and not a punishable off ence.
Instead the government compensates right holders through a ‘piracy levy’, a tax that is paid directly to right holders based on the sale of electronic storage devices including laptops, PCs, smartphones and hard drives.
But the CJEU said the levy system puts copyright holders at an “unfair disadvantage” and that a system that allows people to download content from unauthorised sources could not be legal.
“If member states were free to adopt legislation permitting, inter alia, reproductions for private use to be made from an unlawful source, the result of that would clearly be detrimental to the proper functioning of the internal market,” the court wrote.
T e case, ACI Adam BV and Others v Stichting de T uiskopie, Stichting Onderhandelingen T uiskopie vergoeding, was brought by several electronics stores and manufacturers, which said their products were made more expensive due to the levy.
T e companies said that, when determining the value of the levy, the organisation that sets the rate should not take into account the harm suff ered by right holders as a result of copies made from unlawful sources.
Hearing the case, the Supreme Court of the Netherlands asked for a preliminary ruling from the CJEU on whether the system was legal.
T e CJEU said, in order for the system to work, a distinction must be made between downloading legal and illegal content.
“T e court holds that national legislation which makes no distinction between private copies made from lawful sources and those made from counterfeited or pirated sources cannot be tolerated,” the judgment said.
T e CJEU added that the system punishes people who buy digital movies and music from authorised sources, as they would still pay the piracy levy on the devices they record them on.
Other EU countries including Germany and Belgium off er similar piracy levy systems.
A CJEU preliminary ruling allows courts of member states to refer questions about the interpretation of EU law.
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