Page 162 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 5 Formulating a Non-commercial UGC Creation Levy Scheme
An Intermediary-oriented Approach

Copyright owners should also seek and enforce copyright against every unauthorized access
and use, and cannot get remuneration that is available under the proposed levy schemes.

5.5.2 Criteria for collecting and distributing levies

Under the current levy schemes, the bases on which levies are calculated include the
memory capacity of the device (€0.6 per 4.7GB), the number of devices manufactured/
imported/sold (€2 per unit), and the manufacturing/import/sale price of the device (2% of
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sale price). The last method provides more incentives for copyright owners than the former
two. The former methods impose a fixed price on each device or the character of the device,
but the number of devices used or the memory capacity of the device has little relevance
to the use of the device to create UGCs. A user can buy a computer and use the computer
to create many UGCs, whereas an increase in UGC creation does not bring increasing
levies. Because UGC creation does not require complex programming or high memory
capacity, even devices with the most basic setup can meet the requirements for UGC
creation. Further, the fixed price scheme entails a huge cost of adjustment to keep the price
in step with changing technology and the market. In contrast, collecting levies based on the
manufacturing/import/sale price of the device focuses on the revenue the device gains from
facilitating the leviable use. The greater the ability of consumers to deploy the device to use
copyrighted works, the higher price they should be willing to pay for the device.
Nevertheless, none of the above three methods is tailored to the context of UGC creation
because UGC platforms provide services rather than devices for UGC creators and it is
difficult to determine the price of the service or count how much the service was sold.
Drawing on the previous experience of revenue-based levies, this thesis suggests collecting a
certain percentage of revenues from UGC-related services and devices, with separate levels
of levies for different services and devices based on the degree to which their value has
been enhanced by facilitating UGC creation. The current levy system ranges from 0.1%-
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4% of the import price and 1%-5% of the sales price. I suggest that UGC platforms and
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software primarily designed to make UGCs could be ranked in the first echelon, with a levy
of approximately 3% of annual revenue. Computer hardware, smart phones, Internet links
and WiFi communication equipment could be ranked in the second echelon, with a levy of
around 1% of revenue. Specific tariffs on different devices and services should be determined
by copyright royalty judges or similar authorities based on robust empirical studies and
statistical surveys. As the CJEU confirmed, making empirical surveys is the only way to set
fair tariffs. 214
As for the allocation of levies, the popularity of a copyrighted work is the proper

211 Kretschmer (n 74) 28-32.
212 Netanel (n 73) 71.
213 Ibid.
214 Kretschmer (n 74) 15.

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