The ECJ ruled in its judgment of March 24, 2022 in Austro-Mechana ./. Strato AG (C-433/20) that Article 5(2)(b) of Directive 2001/29 covers the saving, for private purposes, of copies of works protected by copyright (e.g. works in the field of music, movie, image and lyrics) on a server on which storage space is made available to a user by the provider of a cloud computing service, i.e. these copies with "a cloud” are private copies. As is apparent from the Court’s case-law, a Member State which has introduced such an exception into its national law has, in that regard, an obligation to achieve a certain result, in the sense that that State must ensure the effective recovery of the fair compensation for the harm suffered by the holders of the exclusive right of reproduction owing to the reproduction of protected works by end users who reside on the territory of that State.

Certainly, according to the Court’s settled case-law, since the provisions of Directive 2001/29 do not provide any further details concerning the various elements of the fair compensation system, the Member States enjoy broad discretion in that regard. It is for the Member States to determine, inter alia, who must pay that compensation and to establish the form, detailed arrangements for collection and the level of that compensation. However, in so far as the national legislation of a Member State does not provide for the payment of a fair compensation of the rightsholders for copies with “the cloud”, the cloud service providers are not released from their obligation of paying an adequate remuneration.

Until now, the rightsholders are not being paid an appropriate remuneration for private copies and copies for other personal uses (cf. Section 53 (1) and (2) and Sections 60a to 60f German Copyright Act (UrhG)) by use of a cloud in Germany. Indeed, the cloud is another product used for private copies and copies for other personal uses, see e.g. https://www.zpue.de/download-center/107-cloudnutzung.html. However, neither manufacturers and importers of devices and storage media (e. g. pcs, tablets, mobile phones, hard disks) covered by the tariffs published by the collecting societies nor other market participants such as manufacturers and importers of the cloud servers are paying an adequate remuneration for copies made by means of “a cloud”. Moreover, these copies are no subject of the existing umbrella agreements and the tariffs of ZPÜ based on them. With that in mind and in view of the ECJ case-law, there is now need for action in order to implement the remuneration as quickly as possible.

With respect to this and based on the regulations in Sections 54 ff. UrhG, ZPÜ, VG Wort and VG Bild-Kunst are asserting claims to disclosure and remuneration against cloud service providers who provide the product/service package with digital online storage space to a cloud customer in Germany for use on a contractual basis by using cloud computing (“clouds”).

In this respect, cloud service providers are asked to provide full information per calendar year on the quantities of clouds that were brought into the German market and/or have been provided to customers in Germany since 2019. The provided information has to clearly state how many of those clouds are demonstrably provided to private end users and commercial end users. As matters stand, the following information is thereby relevant for each cloud brought into the market to private end users and commercial end users:

• Quantities and nature of the clouds (Brand, product name and/or information on the respective variation/(contract) category/product/subscription)
• The respective minimum and maximum number of cloud users allowed and the maximum number of registered users (for at least one month) per cloud variation/(contract) category/product/subscription
• The duration of the making available in months, in fact the sum of all months about all registered users per cloud variation/(contract) category/product/subscription
• The maximum storage capacity/usable storage in gigabyte per cloud variation/(contract) category/product/subscription
• The amount of the price (net) for the cloud customer per cloud variation/(contract) category/product/subscription.

Furthermore, the collecting societies claim the payment of an appropriate remuneration pursuant to Section 54 UrhG for the period from 2019. Pursuant to Section 54a UrhG, the amount of remuneration depends on the extent to which clouds are used for reproductions within the meaning of Section 53 (1) and (2), Sections 60a to 60f UrhG.

The collecting societies will publish a tariff for clouds, as soon as the requirements are fulfilled, i.e. an empirical study is conducted, or an umbrella agreement is concluded, cf. Sections 40 (1) 2, 93 Collecting Societies Act (VGG) and Sections 40 (1) 3, 38 sentence 2 VGG. ZPÜ has already taken all measures to ensure that a tariff for clouds can be implemented in the future.

If the cloud service providers do not attend to their obligations of disclosure and remuneration, ZPÜ will take all necessary measures, judicial and extrajudicial, in order to enforce the claims of the rightsholders or to suspend the statute of limitations. For this, cloud service providers are informed separately by ZPÜ.

Munich, 09/28/2022