European courts have ruled that businesses do not have to pay a special levy when purchasing copy-enabling media and devices such as blank CDs and MP3 players, however private individuals will still have to cough up the extra charge in many E.U. countries.
In certain E.U. countries a "private copying" charge is added on to digital media products that enable copying, but it is now clear that businesses are exempt from this charge.
The European Court of Justice (ECJ) made the ruling after the Provincial Court in Barcelona, Spain, asked it to rule on a case there. Spanish rights management agency Sociedad General de Autores y Editores had sued Padawan, a distributor of discs and devices, claiming unpaid copyright levies. But Padawan argued that the indiscriminate application of the levy was not compatible with E.U. law.
Under the European Copyright Directive, private copying of material that a person legitimately owns is permitted as long as it is for private use, but "fair compensation" must be given to the copyright holders. Countries such as France, Belgium and Spain do this by charging the levy. Other member states, such as the U.K., have no levy.
Efforts were made by the European Commission last year to reform the system and create a pan-European rule. But these were fruitless and Belgian consumers often find it more affordable to travel to the U.K. or Germany to purchase items such as multifunction printers.
Critics of the system have pointed out that this disparity between member states skews the market and consumers question why they should pay when businesses don't have to.
According to the ECJ the levy is charged on goods sold to individuals because "it can reasonably be assumed those media will be used for copying." But it should not be charged when items are sold to businesses, though, because that assumption cannot be made, it said.
However the definition of "private copying" and which devices are covered varies by country creating further confusion. Thursday's court ruling puts the spotlight on the issue again.