European Federation of Journalists’ Response to the Stakeholder consultation on copyright levies in a converging world

EC consultation

The European Federation of Journalists is Europe’s largest organization of journalists, representing about 260.000 journalists in over thirty countries. It defends press freedom and social justice through strong, free and independent trade unions of journalists.

The EFJ aims in particular at strengthening authors’ rights for journalists and photographers throughout the EU and calls for journalists and photographers to be recognised as authors of the work they create, control further use of their work and receive an equitable remuneration for it. The collection and distribution of levies to journalists is essential to compensate them for secondary use of their work while maintaining free flow of information in the analogue and digital environment.

The distinction between the analogue and the digital environment is important to note.

In the analogue arena it is difficult for authors to control certain types of uses of their works. Consequently, the role of collective societies is essential for journalists in all EU Member States.

In the digital environment journalists may wish to choose between individual and collective management of their rights depending on their ability to manage rights themselves. However, the use of individual Digital Rights Management (DRM) is challenged by the fact that journalists -particularly when they work as freelancers- have no capacity to manage their rights effectively. For this reason, collecting societies are also essential for the living income of journalists in the digital environment.

Levies on journalistic products have had and still have a positive effect on the creation and protection of intellectual works of journalists…Phasing them out or scaling them down would result in a considerable loss of income for authors. This can be drawn from the calculations available at national collecting societies homepages i.e.

We thank the European Commission for giving us the opportunity to comment on the revision of the remuneration schemes for private copying and the levy system in particular. The EFJ welcomes the additional follow-up consultation on copyright levies although we regret that this latest document remains quite ICT friendly and does not rightly reflect the advantages that levies represent for creators. We are indeed concerned by the way the stakeholder consultation and the questions therein were formulated and we find them biased. Nor do we find that the Consultation or the “Road map” provide evidence for a need to launch a ”Copyright Levy Reform”.

Question 1. What are copyright levies

The description of the situation in the stakeholders’ consultation is incomplete and inadequate in several respects. In the first place levies are not a “tax”. In the history of private copying of protected material judgements and legislators throughout Europe decided for a legal license for private copying in order to be able to compensate authors for the ubiquitous infringement of the exclusive reproduction rights by the acts facilitated through the widely available new technique. Therefore the introduction of levies legalised and facilitated the sale of such equipment. In this meaning the introduction of levies as a political decision was also in favour of industry’s interests.

It is essential to recall the purpose and reasons for levies, i.e. to fulfil the obligation to compensate authors fairly for exceptions to exclusive rights that exist under national legislation. Member states may only introduce exceptions under article 5(2) (a) and (b) of the Directive 2001/29. Exceptions introduced in these cases without a system for fair compensation would be in breach of the Directive.

Furthermore, only the consumer -and not the industry- pays the levies. The industry (understood as manufacturers, importers and retailers) only collects levies and forward them to the collecting societies for distribution to right holders (which are represented by their collecting societies). By stating that levies are “imposed” on the industry, the consultation only reflects the industry’s position - not the authors’. Authors feel their directive-granted claim for remuneration is under permanent pressure. It is worth stressing that authors-represented by collecting societies- had to go to court for all new machines and devices to get adequate remuneration for private copying of their works. In many countries levy remuneration has not increased for many years. In Germany, for instance, levy remuneration remained the same for the past 22 years-although the German index on living expenses in that same period rose for over 33 %. Back in 2000 the German government called for re-assessment of the remuneration paid to rightholders and considered it to be too low and therefore no longer adequate.

Depending on the country targeted, journalists benefit from levies collected mainly on photocopy machines, blank tapes, CD-Roms and DVDs. Levies enable reproduction of journalistic works and wide use and access for all consumers, including creators, to copyright protected works. They represent a core element to maintain free circulation of information, especially in new media but difficulties remain in collecting remuneration for electronic re-use. Journalists receive amounts collected via individual payments or via their unions.

Question2. Who administers copyright levies

a) Copyright levies are administered by collecting societies. A problem remains as to the lack of representation of journalists in some collecting societies. For instance, there is no collecting society for journalists in Portugal. On the other hand, there are good representations of journalists in the bodies and boards of collecting societies in other EU-Member states. Good governance should include representation opportunity in all collecting societies. Remuneration in form of lump-sum payment to collecting societies and the distribution to authors is at the very core of collective rights management. The same practice occurs in countries, where remuneration for reprography is not paid via a levy but under e.g. extended licenses such as in Scandinavian countries. Direct payment to national and international right holders would not be possible for the debtors. Would any manufacturer be willing to distribute amounts individually to authors and publishers?

The collective rights management system offers a great advantage to debtors of remuneration: remuneration from all debtors is centralised and distributed by the collecting societies. It is true to say that collective rights management bodies such as collecting societies bear administration costs but these costs are not added to the remuneration paid but deducted from the allocations. The decision on administration costs is taken by right holders who form the collecting societies. Moreover, these costs remain quite low since electronic data processing makes administration ever more efficient. .

b) Collecting societies are mostly governed by authors’, publishers or jointly by authors’ and publishers’ representatives. They enable journalists to exercise control over the use of their works and maintain control over their economic and moral rights. This is particularly important for small right holders such as journalists who do not have the resources to control reuse of their works. The German collecting societies for instance have to comply with the Act on Collective Rights Management which subjects them to transparent and non-discriminatory criteria. The EJF would welcome similar rules to apply to collective rights management all over Europe and regrets that the European Commission gave up the idea of harmonizing the legal framework of collective rights management in favor of recommendations regulating fragmented areas of rights management.

(c) – (e) With regard to secondary uses where national legislation foresees an exception, levies are a practical method to provide authors with fair compensation with low administration costs which benefits the whole range of rights holders from authors of occasional articles to large contributions for broadcasting use. Collecting societies have built expertise and have compiled data which enable them to assist authors in establishing a fair and transparent distribution system. Without fair compensation, there can be no exception. The compensation belongs to rights holders who will decide on the distribution key.. In practice, the distribution plans are usually determined on the basis of statistical evidence within a system of objective availability. Collecting societies do not discriminate foreign authors. The payments for levies are made through a bilateral agreement with another collecting society. Joint agreement between all rights holders on the distribution key is therefore essential to ensure distribution of remuneration collected abroad.

f) There should be accountability of collecting societies both to authors such as journalists and to national governments. This requirement should be set by law as it does in Germany though the German Act on Collective Rights Management (UrhWG).

Question 3: Distribution of copyright levies

This section relates to the music sector only. But we fail to understand the finding on page 4 of the Stakeholder Consultation according to which management costs for the provision of the distribution services are distinct from costs for the collection service: Collecting societies collect and distribute money for the uses made of their member’s rights. This is a comprehensive service where costs for collection and costs for distribution for technical reasons can not be separated.

Question 4: Digital Rights Management and Digital Music Sales

This section relates to the music sector. The printed media simply can not be protected by technical protection measures or DRMS. Printed material will always be a source for copying - be it analogue copies on paper or digital copies made with scanners and PCs.

In the DRM debate one may never forget the scope of copyright to guaranty equitable remuneration to authors when their works are used and marketed by third parties. Last but not least public broadcasting is and will remain a major source for private copying and will always make the broadcasted content accessibly unencrypted.

Moreover, DRMs do not solve the big concern of uneven bargaining power faced by journalists. We feel it is of utmost importance for all right holders to be involved in deciding on the use of DRMs. These devices cannot be applied unilaterally. We also believe that DRMs could work effectively where managed by collecting societies systems.

Question 5 Copyright levies and the notion of harm based on private copying

We fail to understand the alleged connection between “economic harm” and levies. We believe that harm, as mentioned in Recital 35 of the Directive 2001/29 is only one of the criteria to evaluate the level of fair compensation. The directive does not require right holders to prove actual harm. The prejudice sustained by the right holder is therefore neither compulsory, nor an exclusive criteria.

The second paragraph of the assessment is incorrect in stating that levies are to be paid by the manufacturers of equipment or media. In fact, the debtor of the levies is the user who pays the levies as compensation for the copies s/he makes with the device. The manufacturers collect this remuneration from the consumers and forward them to right holders via the collecting societies.

Question 6 Criteria

We believe that remuneration should be paid for any device which can produce a private copy of a copyright protected work. The remuneration should be done in accordance with objective, transparent and non discriminatory criteria.

The dedication of equipment is no valuable criterion to define whether or not certain equipment or media is to be levied. The affluent German case law on the levy issue has always stressed that the only criterion valid is whether or not the equipment or media can be used for private copying. We see no concrete reason in the consultation to believe that levies should be limited in scope.

On the finding that “ 69% of internet users have used their computer to play digital music files” we would like to stress that these files are copied at minimum into the RAM of the PC before they can be played. Therefore we strongly assume that music files are being stored on the hard discs and we therefore see no objections in introducing levies on such devices.

This clearly shows that the notion of dedication to copying is a wrong approach: the only valid criterion is whether or not equipment and media are used for copying.

Question7 Copyright and convergence

We disagree with the analysis provided by the Commission.

Levies introduced in the analogue environment were not collected for equipment and devices that had a copying function only. For instance, magneto graphic recording machines were equally used for primary sound recording, for recording broadcasts and vinyl-discs and for playing these recordings - they were borne multifunctional devices. The same applies to fax machines which could from the very beginning be used as photocopiers.

Convergence is not a new phenomenon of the digital environment but a constant evolution from the beginning of analogous copying techniques.

While the setting of levies must take into account the existence of Technological Protection Measures (TPM) and DRM, especially to avoid double payment by the user, we believe that these devices have to date proved to be unsafe. Moreover, as set above, these solutions do not work for the print sector. Therefore convergence of media is no argument against levying the different elements in a chain of equipment used for copying the visual material we represent.

Question 8 Differences in copyright levies systems

Collecting societies are best placed to answer this question.

Question 9 Transparency for stakeholders

We share IFRRO’s position on this question and would like to stress the lack of reliability of the “Levies Collection Study: “Market Value of Private Copying Levies on Digital Equipment and Media in Europe” of April 2006 commissioned by the Copyright Levies Reform Alliance. We strongly urge the Commission not to rely on the data released in that study which provides a false assessment of the levy situation in Europe, not only regarding tariffs for levies, but also to the amount collected and the sales figures used. The figures released in the study do provide a worst case scenario based on incorrect projections. Reliable figures on levy collection and sales figures could have easily been obtained from national governments that are closely supervising the collecting societies activities. The collecting societies business reports can give further accurate information on collection and distribution.

Question 10. Right holders

We agree with the Commission’s assessment that “especially for those individual right holders whose work is not commercially successful either nationally or community wide, a revenue stream via copyright levy has a perceived societal value” for the rightholders. Not only do levies compensate journalists for the reuse of their work, but the amounts collected by collecting societies can contribute to additional training, grants, scholarships for our colleagues.

It is also worth stressing that distribution keys are decided in consultation with all rightholders represented in collecting societies.

Lastly, let alone the fact that DRMs are not truly efficient for the time being we believe that journalists should remain free to decide on DRMs use and their authorisation should always be sought in that respect.

Brussels, 7th July 2006

European Federation of Journalists

Résidence Palace

Rue de la loi 155

1040 Brussels

Tel: 02 235 22 00