For years it has been unclear whether and how the reproduction of copyrighted works on virtual server storage can be used to compensate rights holders. That is what copyright levies are for. But so far there is no levy for private copying in the cloud.
Only levies on USB sticks, PCs and smartphones currently compensate rights holders. To clarify whether or not storage capacity in the cloud is also subject to remuneration, the Austrian collecting society, Austro-Mechana, has sued a cloud storage provider. The Vienna Higher Regional Court referred the question to the European Court of Justice for a decision. Now Advocate General Gerard Hogan has submitted his opinion on the case.
His statement provides the desired clarity: Yes, the right of private copying and thus the requirement of fair compensation for such copying also applies to cloud-based recording services. The requirement is to be understood in a technology-neutral way.
Of course, there are limitations. For example, the opinion confirms the fundamental discretion of member states in their national laws. It may well be sufficient – as has been the practice for a long time and in many countries – to make the device that enables access to the web (and thus to the storage capacity) liable to the levy. Depending on the levy amount on this access device, a fair balance is already created. In fact, the levy systems, in particular the tariff amounts for devices and storage media in Austria as in other countries, are calculated to create a just equalisation. Compensation should not and must not be achieved through an indeterminate or upwardly open amount.
This is precisely where the opinion is not only groundbreaking in the literal sense. In the majority of cases, the ECJ follows the Advocate General's opinion. In addition, beyond the AG opinion and the examination by the ECJ, it should be pointed out that there is an undeniable development: fewer and fewer copies are being made on devices and storage media. This is by no means solely due to the possibility of cloud storage. But for a long time, companies and industry associations have also been proving via empirical studies that device-related levies are becoming obsolete. The figures reflect this; although in many places there are still tariffs for storage media such as blank CDs or audio cassettes. But since these formats are hardly used for private copying any more, they no longer generate sufficient revenue for rights holders. This in turn is shown by the ever decreasing revenue of collecting societies from this source. If we exclude storage media and the calculation of the levy for devices according to their storage capacity, then the device levies alone might no longer ensure fair compensation in the foreseeable future. Cloud storage will then probably be taken into account.
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