As part of the project to update the system under which compensation fees for private copying are paid it is proposed that the fees should be collected from three different sources. This means that the compensation fees would also be collected from consumers who would have to pay it in a series of small payments. The Finnish Consumer Agency is of the view that before rushing into major changes, Finland should first see how the issue is being dealt with in other countries.

In the model proposed by Markus Leikola, the compensation fees would be collected from three different sources: equipment and storage platforms, cloud content and storage services and unsecured content products and services that consumers must pay for. According to the proposal, the consumers would not have to pay a multiple fee as the charges would be collected in a series of payments.

Would compensation fees also be charged for service purchases?

It its opinion on the proposed model to the Finnish Ministry of Education and Culture, the Consumer Agency draws attention to the principle laid down in the Finnish Copyright Act: Consumers only pay a compensation fee for private copying when they produce a copy. Thus, under the Finnish Copyright Act, no compensation fee should be required for services or similar activities where consumers do not produce copies. Likewise, fees should not be charged when copying is impossible on account of such factors as technical protection or other similar copy protection systems. Neither is any compensation fee paid for unauthorised copying (such as copying taking place in peer-to-peer networks).

This means that the “Leikola model” is not in line with the letter, purpose or systematics of the Finnish Copyright Act. After all, under the proposal, the obligation to pay a compensation fee would also cover areas that do not involve copying by consumers for private purposes but activities such as purchasing of services.

The prospect that a consumer might have to pay many times for the use of the material would also be in violation of the systematics of the Finnish Copyright Act. This could happen when a consumer buys licensed contents at market prices and on top of that would also have to pay a compensation fee for the storage platform.

In administrative terms, the system should be substantially more streamlined. The proposed simplification of the payment arrangements is, however, a positive feature and would lighten the administrative burden.

Developments in other European countries should be considered

In the view of the Finnish Consumer Agency, the model presented by Markus Leikola would mean a fairly radical change to the existing compensation system and after assessing the proposed changes, which would have a wide-ranging impact, it has reached a conclusion that the model should not be introduced as speedily as proposed by Leikola.

International developments in the field of compensation fees should be closely followed. The European Commission has appointed a one-man committee to examine the matter, which is expected to complete its work in 2013. The Court of Justice of the European Union has also issued a number of rulings that can be considered as precedents in the matter. Naturally, the model proposed by Markus Leikola is a useful contribution to the discussion going on in Europe.

However, the Finnish Consumer Agency is of the view that there is no reason to introduce the model in Finland as a temporary system that would be in effect until the end of 2016. Instead Finland should wait and follow the developments elsewhere, particularly what is being done in other European countries.