Recommendation 1

HM Government Deferred

Copyright private copying exceptions and compensatory levy schemes are complex policy issues with implications for consumers, technology providers, and the creative industries. Broadly speaking, they allow people to copy and share copyright material in private circles (e.g. close family members), without infringing copyright. In return rights holders are compensated for actual or perceived harm, typically through a levy on storage media and devices used for copying. There is a spectrum of views on some of the complex questions around private copying, such as: what qualifies as private copying; how harm to copyright rights holders is assessed; how a statutory copyright exception is framed; and the scoping of any compensation scheme, including who would ultimately bear the cost. In countries that have such a scheme, exceptions and levies were originally a response to home-taping, CD-ripping and similar practices. Jurisdictions vary in their approaches: the United States, Canada and Japan have compensatory levies only on older media types, such as CDs; the UK, India and Australia have no levy scheme, whereas France and Germany have broad levies and the largest revenue generation. With changes in technology, jurisdictions have also taken different approaches about whether to extend or update their levies for the digital age. Canada decided not to extend their scheme beyond reproduction on blank carriers (e.g., recordable CDs) whereas France includes digital devices and storage (smartphones, tablets, external hard drives etc.). Levies relate specifically to private copying and the reproduction right. They are not intended to compensate rights holders for licensed uses such as streaming, for which they are compensated by alternative means. As outlined in the Select Committee’s report, the Government sought in 2014 to introduce a narrow private copying exception, allowing copying of content lawfully owned by an individual (e.g., a CD) to another medium or device (e.g., a mobile phone, MP3 player, or external hard drive) owned by them. The decision to introduce the exception was overturned by the High Court which concluded that the evidence relied upon to justify that the exception caused minimal harm was inadequate. In the decade since, technology has delivered significantly better connectivity between devices, impacting on how individuals access, browse, or privately copy different types/forms of media. Streaming is now the dominant UK business model for accessing content, whether subscription, ad-based, or free-to-access. The last decade has also seen a shift towards creating content (e.g., photographs) on smartphones and accessing or downloading short-form video that may include licensed music and images. Alongside this, streaming platforms are increasingly enabling users to store licensed offline copies available to the individual while subscribed. Noting the analysis commissioned from Frontier Economics and the report on the practical and technical aspects of the Smart Fund levy proposal, the government considers that the increased take up of streaming services over the past decade may have led to an overall decline in private copying by individuals. Although we are not ruling out the introduction of a private copying exception and levy, we believe that further evidence is needed to better understand current user behaviour. The Intellectual Property Office (IPO) will therefore meet with representatives from the UK’s creative industries to discuss how to strengthen the evidence base on private copying, both domestically and in relation to trade. This is vital for assessing the case for and against any new measures in this area. We are aware that certain EU copyright licensing bodies have since the UK’s EU Exit ceased making private copying remuneration payments to their UK counterparts under their commercial agreements. This was raised by the UK at the 3rd Trade Specialised Committee on Intellectual Property under the EU-UK Trade and Cooperation Agreement on 23 October 2023 and the minutes were published on gov.uk. The government is analysing the approaches being taken in these Member States to inform future discussions with the EU and help improve the evidence base. The government remains committed to continuing its dialogue with the British Equity Collecting Society (BECS) and others about steps to resolve matters in relevant jurisdictions.