Europe rules Spanish digital copyright tax 'illegal'

The Court of Justice of the European Union (CJEU) on Thursday ruled that a small tax or ''canon'' which Spain currently imposes on all digital recording material is out of line with European Community Legislation. Spain enforces a small levy on all digital media by way of pre-emptory damages to artists for the private copy of their creative material (music CDs, DVDs etc).

"The application of a ''private copying tax'' on playback media purchased by companies and professionals for purposes other than making private copies does not conform with European Union law," an EU court in Luxembourg ruled on Thursday.

However, the court left it to the Provincial Court of Barcelona to determine whether the Spanish canon is "imposed indiscriminately".

The statement refers to a dispute between the General Society of Authors (SGAE) and a company called PADAWAN, which sells electronic storage devices, including CD-R, CD-RW, DVD-R and MP3 players. SGAE demanded payment of a lump sum from PADAWAN in compensation for private copying, to the amount of 16,759.25 Euros for storage devices marketed by PADAWAN between September 2002 and September 2004. PADAWAN refused to pay and took the matter to court.

The case ended up going to the Provincial Court of Barcelona, who then referred it to the Court of Justice of the European Union in order to determine whether the current Spanish normative was in line with EU law. The Court indicated that the ruling of the CJEU would depend on whether SGAE had a right to claim compensation for all storage devices marketed by PADWAN, or only on whose which were presumably designed to make private copies.