The Central Court at Madrid annuls the Order regulating the controversial digital levy

14 April 2011

In the decision dated March 22, 2011, Executive Order PRE/1743/2008 detailing the equipment, devices and storage media subject to payment of the equivalent compensation for private copy, the applicable amounts for each one and the distribution between the different methods of reproduction was declared null and void.

Following on the European Court of Justice and the Barcelona Provincial Court rulings, the private copy equitable compensation system was hit with another legal setback, this time from the contentious-administrative jurisdiction. The Central Court at Madrid division ruled that said Order is actually a Regulation, since it is aimed at producing general obligatory effects, and as a consequence should have been passed following a series of formal requirements which were not adhered to at the time the rule was drafted; thus the rule is null.

Specifically, the ruling determines that the required report was not prepared for the State Council, nor was the necessary economic studies and justifying memorandums, all formal requirements that the ruling deemed should have been fulfilled.

The ruling does not annul the institution of equitable compensation for private copies itself, rather the current rule that regulated it, and therefore the consequence of the declaration of nullity is the application of the previous legal system as foreseen in Act 23/2006.

Notwithstanding same, the nullity of Executive Order PRE/1743/2008 can lead to lawsuits in the event that, in application of same, amounts in excess of that established by law were unduly collected.

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