Flat-rate remuneration, also known as a flat-rate levy or device levy, is a concept in copyright law that provides for flat-rate remuneration for the private copying of copyrighted works. In Germany, this system is enshrined in law and serves to compensate authors and rights holders for loss of income caused by permitted private copying.

Legal basis

The legal basis for flat-rate remuneration in Germany is formed by: 1. section 54 of the German Copyright Act (UrhG) 2. sections 54a-54h UrhG, which regulate the details of the remuneration obligation and amount 3. case law of the Federal Court of Justice (BGH) and the European Court of Justice (ECJ) The concept is based on the assumption that certain devices and storage media are mainly used for making private copies.

Functionality and area of application

1. devices and media subject to remuneration: – computers, tablets, smartphones – printers, scanners, copiers – blank CDs, DVDs, USB sticks, hard disks – other devices and media suitable for reproduction 2. collection of the levy:
– The levy is collected by the manufacturers, importers or distributors of the devices and media.
– It is usually added to the sales price and thus indirectly borne by the end consumer. 3. administration and distribution:
– Collecting societies such as GEMA, VG Wort or VG Bild-Kunst are responsible for collecting and distributing the royalties.
– The distribution is made to the rights holders according to fixed keys.

Amount of remuneration

The amount of the flat-rate remuneration varies depending on the device or medium and is regularly adjusted. It is determined in negotiations between the collecting societies and the associations of device manufacturers and importers. If no agreement is reached, an appeal can be made to the Arbitration Board at the German Patent and Trade Mark Office. Examples of remuneration levels (as at 2023):
– Smartphones: EUR 6.25
– Tablets: EUR 6.25
– PCs: EUR 13.1875
– External hard drives: graduated according to capacity, e.g. EUR 1.56 for 1 TB

Advantages and disadvantages

Advantages:
1. practicable solution for the remuneration of private copying 2. avoidance of monitoring of private copying activities 3. ensuring remuneration for authors Disadvantages:
1. flat-rate remuneration can lead to injustices in individual cases
2. Potential overcharging of consumers who do not use devices for copying
3. Challenges in setting the appropriate level of remuneration

Current developments and challenges

1. digitalization: The increasing use of streaming services and cloud storage poses challenges for the traditional model of flat-rate remuneration. 2) European harmonization: Efforts are underway to harmonize the flat-rate remuneration system at EU level. 3) Technological development: The rapid development of new devices and storage technologies requires constant adjustments to the system. 4. legal discussions: There are ongoing debates about the appropriateness and legality of certain aspects of flat-rate remuneration.

Significance for the German market

Flat-rate remuneration has a special significance for the German market: 1. cultural promotion: part of the revenue flows into cultural promotion programs. 2. competitive factor: the levies can influence the pricing of devices and media. 3. legal certainty: the system offers consumers legal certainty when making private copies. 4. source of income for creators: For many authors, the distributions from the flat-rate remuneration represent an important source of income.

Conclusion

Flat-rate remuneration is an established but not uncontroversial system in German copyright law. It represents a compromise between the right to private copying and the author’s right to remuneration. In view of advancing digitalization and new forms of use, the system faces the challenge of further development and adaptation. Despite criticism and discussions, flat-rate remuneration remains an important part of the German copyright system and a significant factor in the remuneration of creative services. Future developments will largely depend on how flexibly the system can react to technological changes and new usage habits.