Private Copying Levies Cannot Be Paid From Central Government Funds

A recent decision by the Court of Justice of the EU ("CJEU") has held that a system in Spain whereby the equitable remuneration payable in respect of private copying paid to rights holders out of the General State Budget is not compatible with EU copyright law.

Under Spanish law, as permitted as an option under the InfoSoc Directive (2001/29/EC), private copying of copyrighted works is permitted provided that "fair compensation" is paid to the copyright owner. This is normally achieved in Member States with private copying exceptions by introducing a levy that is then collected and paid to the relevant rights holders. This levy could, for example, be paid directly or indirectly by end users of digital reproduction equipment, devices and media in the cost of acquiring such equipment, devices or media. Spain replaced its levy with a blanket payment from its general state budget which was challenged by Spanish rights collecting agencies.