11 organisations join GESAC in private copying statement

Read the statement and background information below and find a full list of signatories here.

Private copying compensation: European Creators under attack from Apple, Huawei, Samsung

European creators’ organisations and unions urge the EU decision-makers to support European interests and take a firm stand against aggressive lobbying by device manufacturers to weaken EU legislation providing for private copying compensation.

The system that compensates creators for the private copying exception existing in most European countries has contributed to their remuneration and the funding of European creation for decades.

Today, manufacturers of electronic devices through their trade organisation in Europe (Digital Europe) are aggressively attacking this long-standing practice and formulating unacceptable proposals to deprive creators from their rightful compensation.

Apple, Huawei, LG, Samsung and Xiaomi are the biggest selling brands of mobile devices in Europe in 2018. None of them are European companies.*

Market research has shown time and again, that prices of devices are not impacted by the application of private copy compensation schemes. A smartphone might be more expensive in the UK where there is no private copy remuneration (because UK law does not have a private copying exception) than in France, where there is long-established and well-functioning compensation scheme.

Companies from China, South Korea and the US, under the name of Digital Europe, are asking to change EU law so that they should not have to contribute, as is currently the case, to the remuneration of creators and creativity in Europe, with no perspective of benefitting EU consumers and with a single purpose: maximising their profits by not paying for private copy compensation and by keeping their prices the same, if not higher!

Organisations and unions representing creators in Europe urge the European Commission and the Members of the European Parliament to reject these outrageous demands with determination and to defend European interests in this high economic value sector.

*When looking at the worldwide market, top ten vendors of devices are again completely non-European companies. Only Nokia is considered as being in the 10th place according to some statistics and even for that the manufacturing take place in Taipei through a Taiwanese company who bought the right of manufacturing the Nokia devices from Microsoft for the sale and distribution of such devices by HMD Global a Finnish company that is exclusive licensee of the Nokia brand for mobile phones.

Background information:

What is the private copying compensation?
This system is based on European copyright legislation which provides an exception to copyright to allow consumers to make private copies of music or movies they lawfully acquire (Article 5.2(b) of Directive 2001/29/EC). The law requires that when this optional exception is introduced at national level it should be accompanied by a compensation scheme for the creators and other rightholders. Most EU countries implemented a private copying exception via a remuneration included in the price of the consumer devices on which such copies are made. Thanks to those systems, creators and other rightholders are compensated when their works are reproduced for private purposes (copies on smartphone, tablets, computers, USB sticks, etc.).

Despite the changes in consumption, private copying still remains one of the methods through which creative works (musical, artistic, literary, journalistic, audiovisual, visual arts, etc.) are enjoyed. Whereas this compensation system was initially limited to the copying of content onto blank tapes, it evolved in time to embrace technological developments and was extended to CDs, USBs, PCs, mobile music players, smartphones, tablets and even certain online services, through the rulings of CJEU.

Who pays?
The principle is that the user, i.e. the consumer, is liable for the private copying remuneration, as it is the beneficiary of the exception. In practice, and as approved by the case law of the CJEU, such remuneration is paid by manufacturers and/or by distributors of electronic copy-enabling devices. Many studies have proven that the private copying remuneration does not have any tangible influence on the price of consumer products (neutral or null effect, non-elasticity of consumer prices). The price of smartphones or tablets is not higher in countries where the private copying remuneration applies than in those where it does not. In other terms, private copying remuneration does not affect the price of the product to which it applies.

Currently, consumer electronics are manufactured outside Europe by a limited number of very large North American or South-East Asian companies such as Apple, Samsung, Huawei, Xiaomi, LG, Lenovo, OPPO, ONEPlus. These goods are then distributed directly by them or by online retailers like Amazon. These companies are responsible for the payment of private copying remuneration to European creators.

An economic challenge for Europe
The European cultural and creative industries (CCIs) are one of the major assets of the European economy. They account for 12 million jobs, which is 4 times more than the automotive industry, and 6 times more than the telecommunications industry. The CCIs are among the spearheads of the European digital economy, as creative content is an undeniable driving force in the digital market. The CCIs export and contribute to the vitality of the European digital market.

Creators are at the core of the CCIs’ value chain. Without them, there is no creation of value. Authors and performers, as individuals, are vulnerable and depend on their rights to be remunerated for their creative work. The private copying remuneration is an integral part of this fragile ecosystem.