The CJEU Ruling on Royalty Payments for Music Broadcasting on Public Transport

On the 20^th April 2023, the Court of Justice of the European Union (the “CJEU”) ruled on the subject of royalty payments for music broadcasted on public transport in the joined cases C‑775/21, Blue Air Aviation SA (‘Blue Air’) vs. UCMR – ADA Asociaţia pentru Drepturi de Autor a Compozitorilor (the 'UCMR – ADA’) and C‑826/21, Uniunea Producătorilor de Fonograme din România (‘UPFR’) vs. Societatea Naţională de Transport Feroviar de Călători (SNTFC) ‘CFR Călători’ SA (the ‘CFR’).

 

Blue Air vs. UCMR – ADA

In the case of Blue Air vs. UCMR - ADA, the Romanian copyright collective management organisation, the UCMR — ADA, initiated legal proceedings before the national courts of Bucharest against the airline Blue Air, claiming that music had been broadcasted on the airline's flights without payment for the use of copyrighted musical works. The plaintiff sought payment of the outstanding royalties and the penalties due for the alleged unauthorised use of such works which were communicated to the public. The national court of Bucharest ruled in favor of UCMR – ADA, stating that Blue Air's provision of devices for background music created a presumption of copyright infringement. Blue Air appealed the decision, arguing that it had not broadcasted unlicensed music and that the presence of equipment did not constitute a communication to the public.

 

UPFR vs. CFR

A similar case to the above is UPFR vs. CFR. In this case, the UPFR - the Romanian management organisation responsible for handling the related rights of phonogram producers - initiated legal action before the court in Bucharest against the CFR, a railway company, seeking remuneration and penalties for the unauthorised communication to the public of musical works on board passenger carriages operated by the CFR. While the domestic court stated that the mere installation of a sound system that enables public access to sound recordings technically does constitute a communication to the public, it dismissed the action by declaring that the UPFR had not provided sufficient evidence to prove that the trains in service were equipped with such a system. The UPFR lodged an appeal against this decision before the Court of Appeal in Bucharest. Both the appellate courts in Bucharest stayed proceedings and the cases were subsequently referred to the CJEU for a preliminary ruling on the interpretation of EU copyright law.

 

CJEU Preliminary Ruling in the Joined Cases

The first question the CJEU addressed was whether playing background music on public transport constitutes a communication to the public under Article 3(1) of Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society, which article gives authors the exclusive right to authorise or prohibit any communication of their works. To assess if the communication constituted a communication to the public, the CJEU considered two cumulative criteria: whether the act constituted an act of communication of a work and the communication of that work to the public. On the basis of these criteria, the CJEU concluded that playing background music on public transport constitutes a communication to the public under Article 3(1) of Directive 2001/29/EC.

 

Secondly, the CJEU considered whether the installation of sound equipment and software on board a means of transport constitutes a communication to the public under Directive 2001/29 and Directive 2006/115/EC on rental right and lending right and on certain rights related to copyright in the field of intellectual property. The CJEU concluded that while the concept of "communication to the public" should be broadly interpreted, the mere provision of physical facilities for communication does not qualify as communication according to recital 27 of Directive 2001/29. Therefore, the CJEU concluded that the installation of sound equipment on transport does not constitute a communication to the public in terms of the above directives. Lastly, the CJEU examined the compatibility of national legislation with that of the directives. In order to harmonise copyright and prevent market fragmentation, Member States must not provide broader copyright protection than that specified in Directive 2001/29 and Directive 2006/115, while Article 8(2) of Directive 2006/115 also prohibits national legislation, as interpreted by national courts, from establishing a rebuttable presumption of a communication to the public due to the presence of sound systems in means of transport.

 

Conclusion

The CJEU's ruling on royalty payments for music broadcasting on public transport has significant consequences for EU copyright law. Besides ensuring harmonisation and preventing broader protection beyond EU Directives, the ruling also provides legal clarity, strikes a balance between authors' rights and a coherent copyright framework, and promotes fair practices in the evolving digital content distribution landscape.
 

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