The Belgian collecting society SABAM claims that the internet service providers Belgacom, Telenet and Voo should pay a royalty of 3.4% of their turnover for music that is downloaded or streamed by their customers. Because the service providers refuse any such payment, SABAM sued them in court and the Brussels court of first instance will now examine whether internet service providers are liable to pay royalties to the owners of copyright protected music.
The Belgian collecting society SABAM issued a press release on 30 April 2013 to inform the public that it is suing internet service providers Belgacom, Telenet and Voo because they should, according to SABAM, pay royalties for music that is downloaded by their customers.
According to SABAM, the internet service providers or ISPs have developed a business model that is based on the infringement of copyright but the providers do not pay compensation for this exploitation. Therefore, SABAM claims royalties that it will distribute among its members, mainly music composers. An equitable royalty amounts to 3.4% of the ISPs turnover, SABAM stated.
The claim is being brought before the Brussels Court and is very controversial.
Under EU and Belgian copyright laws, the owners of copyright have two exclusive economic rights: the reproduction right and the right of communication to the public. Everyone who reproduces a copyright protected work or who communicates it to the public, must obtain the consent of the copyright owner and pay the royalty imposed by the copyright owner.
Broadcasting or making works available via the internet are examples of communicating works to the public and these acts of exploitation require the copyright owners’ consent. In the case that is currently pending before the Brussels Court, SABAM will have to show that the ISPs are communicating copyright protected works to the public and this will not be easy.
The internet service providers are intermediaries that provide technical assistance but do they communicate works to the public? The answer to this question seems to be negative: the ISPs do not initiate any communication to the public nor do they know which works are being communicated via their networks. Their customers are communicating works to the public and most of them already pay compensation for this to the copyright owners or to their collecting society. Every website owner, for instance, who uses music to welcome visitors to his site, currently has to pay royalties to SABAM.
The case against internet service providers is a new attempt by SABAM to generate a new revenue stream in compensation for revenue lost as a result of the decline of CD sales. In the past SABAM tried to force internet service providers such as Belgacom and NetLog to take special measures to reduce copyright infringements via their networks, but the Court of Justice twice rejected SABAM’s claims. The CJEU protected the internet service providers to avoid the claims of the copyright holders unnecessarily limiting the use and expansion of the internet.
The decision of the Brussels Court in the case against the ISPs Belgacom, Telenet and Voo is not expected before the end of 2014. It is possible that the Court will refer the case to the EU Court of Justice if there are legal questions that need an EU-wide interpretation. But it is also possible that the Brussels Court bluntly rejects SABAM’s claims merely for the reason that the ISPs cannot be held liable for copyright infringement since they do not themselves communicate any copyright protected work to the public.
