European Court of Justice: A hotel operator which broadcasts phonograms in its rooms must pay equitable remuneration to producer

EU law requires the Member States to provide, in their legislation, a right to a single equitable remuneration for producers of phonograms published for commercial purposes, to be paid by the user of such phonograms for broadcasting or for any communication to the public. However, such equitable remuneration need not be paid in the case of ‘private use’.In its judgement of 15 March 2012 in case C-162/10 – Phonographic Performance (Ireland) Ltd v Ireland, the Court first considers whether a hotel operator which provides in guest bedrooms televisions and/or radios to which it distributes a broadcast signal is a ‘user’ making a ‘communication to the public’ of a phonogram which may be played in a broadcast for the purposes of Union law.In that connection, the Court recalled that it has held that the concept of ‘communication to the public’ requires an individual assessment and that, for the purposes of such an assessment account has to be taken of several complementary criteria, including, first and foremost, according to the case-law of the Court, the indispensable role of the user.The court held that the term ‘public’ refers to an indeterminate number of potential listeners and a fairly large number of persons, and that the profit-making nature of ‘communication to the public’ is also a relevant criterion.The role of a hotel operator who provides televisions and/or radios in guest bedrooms is indispensable, since the guests of such a hotel are able to listen to those phonograms only as a result of the deliberate intervention of that operator. As regards, next, the guests of that establishment, they constitute an indeterminate number of potential listeners, insofar as the access of those guests to the services of that establishment is the result of their own choice and is limited only by the capacity of the establishment in question. As regards the number of potential listeners, the Court has held that the guests of a hotel constitute a fairly large number of persons, such that they must be considered to be a “public”3. Finally, the broadcasting of phonograms by a hotel operator is of a profit-making nature. Indeed, the action of the hotel by which it gives access to the broadcast work to its customers constitutes an additional service which has an influence on the hotel’s standing and, therefore, on the price of rooms. Moreover, it is likely to attract additional guests who are interested in that additional service.Consequently, such an operator is a ‘user’ making a ‘communication to the public’ of a phonogram which may be played in a broadcast for the purposes of EU law.On that basis, that operator is obliged to pay equitable remuneration for the broadcast of a phonogram, in addition to that paid by the broadcaster. Moreover, according to the Court, although EU law provides for a limitation to the right to equitable remuneration in the case of ‘private use’, it does not allow Member States to exempt a hotel operator which makes a ‘communication to the public’ of a phonogram from the obligation to pay such remuneration.Source: ECJ press release 26/12; find full text of judement here>>.Interestingly, in another judement of the same day (case C-135/10 – Società Consortile Fonografici (SCF) v Marco Del Corso), the court held that a dentist who broadcasts phonograms free of charge in his private dental practice is not making a ‘communication to the public’ within the meaning of EU law and such broadcasting does not, therefore, give rise to a right to remuneration for phonogram producers.

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