Page 164 - 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

qualitative analysis should be combined with subjective surveys to more accurately assess
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the popularity of work. CMOs can conduct sample surveys with UGC creators and ask
them to write down or tick out copyright works that have made substantial contributions to
their UGC creation according to their contribution level.
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As an advantage of a levy scheme is its promotion of cultural progress, the proposed
levy scheme should also reserve a certain percentage of levies for social, cultural and
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educational purposes, which is already practiced by many EU countries. For instance,
French law and Lithuanian law both require 25% of the collected levies to be used for
social and cultural purposes, and Portuguese law sets the percentage as 20%. In the 2013
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Amazon v Austro-Mechana decision, the CJEU found that distributing half of the collected
revenue to social and cultural funds was not incompatible with the ‘fair compensation’
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requirement under the InfoSoc Directive. Rather, it treated the allocation to social and
cultural institutions as indirect forms of collective remuneration. Indirect remuneration was
not prohibited by any EU legislation or case law, provided that copyright holders could
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actually benefit from this fund on a fair and non-discriminatory basis. At the same time,
the CJEU required that strict rules be established to regulate such indirect remuneration to
ensure that, ‘(1) there is a fair balance between the sums allocated to social institutions and
those allocated to cultural institutions; (2) in the case of social establishments, it is possible,
primarily, to provide support for rightholders suffering hardship; (3) the sums allocated to
cultural establishments are used to promote the interests of rightholders’. 228

5.5.3 Collective management organizations for collecting and distributing
levies

Some academics have argued that levies should be distributed to copyright owners
directly from leviable devices and services, bypassing copyright CMOs. Direct distribution
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could save the significant administrative costs incurred by CMOs. However, it would be
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inefficient or even difficult to search for different copyright owners and calculate the levies

222 Byungil Kim, ‘Distribution Among Right Holders’ in Kung-Chung Liu and Reto¬ M.¬Hilty (eds), Remuneration of
Copyright Owners: Regulatory Challenges of New Business Models (Springer, 2017) 146.
223 Section 5.4.4
224 Kretschmer (n 74) 29.
225 IFRRO and WIPO (n 206) 39.
226 Austro-Mechana v. Amazon, Court of Justice of the European Union, C-521/11 (11 July 2013) para 7 <http://curia.europa.eu/
juris/document/document.jsf?doclang=EN&text=&pageIndex=0&part=1&mode=DOC&docid=139407&occ=first&dir=&c
id=7739717> accessed 14 May 2019.
227 IFRRO and WIPO (n 206) 22.
228 Austro-Mechana v. Amazon, Court of Justice of the European Union, C-521/11 (11 July 2013) para 8. <http://curia.europa.eu/
juris/document/document.jsf?doclang=EN&text=&pageIndex=0&part=1&mode=DOC&docid=139407&occ=first&dir=&c
id=7739717> accessed 18 May 2019.
229 Netanel (n 73) 58; Litman, ‘Sharing and Stealing’ (n 113) 40.
230 IFRRO and WIPO (n 206) 20; Kretschmer (n 74) 64.

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