The European Court of Justice ruled today that European Union countries are allowed to collect a tax
on blank media to fairly compensate artists under certain circumstances. The ruling comes after an Austrian copyright agency billed Amazon À1.9 million ($2.4 million) for sales of magnetic media sold in Austria in the first six months of 2004.
Thursday's ruling from Luxembourg found that the existing EU law does not allow the levy to be applied where the intended use of the media is not the duplication of copyrighted media, but it is unclear on how use cases would be distinguished at the point of sale. "However, under certain conditions, EU law does not preclude such a system of a general levy with the option of reimbursement in cases where the intended use is not the making of private copies," the court declared in its ruling.
The ruling is not the end of the legal skirmish between Austro-Mechana
and Amazon, but does set precedent in other EU cases. Amazon believes the levy violates EU law, and filed the appeal.
The copyright agency has asked the court to examine Amazon sales for other charges due between 2002 and 2004. The court agreed and is forcing Amazon to turn over documentation, but has not ruled on the payment demand itself.