The validity of the residual right of remuneration under Articles 17 and 18 CDSMD: Opinion of the European Copyright Society in Streamz (Case C-663/24)

The European Copyright Society (ECS) recently published its Opinion on the interface of rights to access public sector information and copyright.  The Executive Summary is reproduced below and the full Opinion is available here.

Executive Summary

In its questions for preliminary ruling to the CJEU, the Belgian Constitutional Court asks for clarification as to whether the remuneration rights enacted by the Belgian lawmaker when implementing the Directive 2019/790 on Copyright in the Digital Single Market (CDSMD), in the field of streaming service providers and of open content sharing service providers, are compliant with EU law.

In the present Opinion, the European Copyright Society takes the view that an inalienable and non-transferrable right or remuneration is a lawful mechanism under EU copyright law to ensure that authors and performers receive fair remuneration for the exploitation of their works and performances. The fair remuneration rationale rests on fundamental rights protection and constitutes an objective and key principle of EU copyright law, as affirmed in recent CJEU case law.

Article 18 CDSMD requires Member States to ensure that authors and performers are entitled to an appropriate and proportionate remuneration, where they license or transfer their exclusive rights, but states that Member States are free to choose the mechanisms to achieve that purpose. This flexibility allows national copyright laws to complement obligations of remuneration in the contractual sphere with residual rights of remuneration (RRRs), that authors and performers, generally through a collective management organization, can directly assert against economic operators exploiting their works and performances. Article 18 provides only minimum harmonization and is formulated in a way that does not require remuneration to be achieved solely through contractual arrangements between creators and their immediate contractual partners.

RRRs are well established within EU and Member States copyright law. The Rental and Lending Rights Directive already provides authors and performers with an unwaivable right to equitable remuneration for rentals. Similar remuneration mechanisms exist in several Member States for diverse modes of exploitation.

The mechanism of RRR does not unduly interfere with exclusive rights. Authors and performers benefit from full exclusive rights but retain a right to remuneration (hence called residual) after they transfer or license them. This legal technique dissociates the exclusive right, necessary to authorize the reproduction, communication or making available to the public, from a right to get remunerated for such exploitation.

The ECS also rejects the claim that RRRs create double payment obligations. Legally speaking, the remuneration paid under exploitation contracts concluded with producers or publishers and the remuneration paid under an RRR arise from different legal bases. Rather than requiring platforms to pay twice for the same use, the mechanism reallocates part of the overall revenue stream to creators. It is therefore a redistribution mechanism rather than an additional layer of compensation. It is in line with EU copyright law and CJEU case law admitting that the many entitlements and rights under copyright and related rights can be unbundled and separately assigned for distinct modes of exploitation.

The RRR is not an exception or limitation to copyright either: it does not replace or substitute an exclusive right (as is the case with the right performers and phonogram producers to claim remuneration for broadcasting of phonograms) and it is not a compensatory system for a legally authorized use (as in the case of private copying). Regarding freedom of contract and freedom to conduct a business, the Opinion acknowledges that RRRs may require the economic operators concerned to deal with collective management organizations despite the conclusion of an exploitation contract. However, such limitations pursue legitimate public-interest objectives, namely correcting structural bargaining imbalances and ensuring fair remuneration for creators, in a proportionate manner.

The RRR, provided for in Belgium in the field of online content-sharing, is not contrary to Article 17 CDSMD, which governs online content-sharing service providers. The maximum harmonization pursued by Article 17 only pertains to the obligation for online content sharing service providers to obtain an authorization for the making available of works and other subject matter, and to the specific liability regime it lays down. It does not regulate how artists should be remunerated once authorization has been obtained. Remuneration issues remain governed by Articles 18–23 CDSMD, which expressly allow Member States flexibility in implementing fair-remuneration mechanisms. National RRR systems therefore complement, rather than conflict with, Article 17.

In conclusion, Member States may lawfully introduce RRRs as a means of ensuring that authors and performers receive a fair share of the economic value generated by the exploitation of their works and performances.

The European Copyright Society (ECS) was founded in January 2012 with the aim of creating a platform for critical and independent scholarly thinking on European Copyright Law and policy. Its members are scholars and academics from various countries of Europe, seeking to articulate and promote their views of the overall public interest on all topics in the field of authors rights, neighbouring rights and related matters. The ECS is neither funded nor instructed by any particular stakeholders. Its Opinions represent the independent views of a majority of ECS members.