Sunday, January 27, 2013

IViR Has Some Numbers for CJEU

One of Huťko's favorite European Internet law Institutes, Dutch IViR, recently published an interesting survey-based study on downloading and streaming from illegal sources in the Netherlands (including the effects of website blocking on consumers behaviour). Some of the findings might be really interesting for CJEU, who will be deciding two related cases this year. Namely:
Both Aci and UPC are at least implicitly (UPC) concerned with the narrowing effect of the three step test. However similar the problem of streaming and downloading from illegal sources may look like, there is a substantial difference between the two. Whereas the first is concerned with a compulsory transient copy exemption, the second with optional personal use exemption under InfoSoc framework. Those who remember the debate about InfoSoc and it's structure would also point out that transient copy exception should be rather treated as a clarification of the reproduction right, not as an exemption to this right. In other words, and in contrast to personal use exemption, transient copy should have been part of Art. 2(a), rather than Art. 5 and thus also not subject to three step test. If this would have been the case, the question like UPC would never pop up. But the reality is different and we can only rely on the CJEU that it will repeat it's ratio decidendi from Infopaq II C-302/10, where it held that "if those acts of reproduction fulfil all the conditions of Article 5(1) of Directive 2001/29, as interpreted by the case-law of the Court, it must be held that they do not conflict with the normal exploitation of the work or unreasonably prejudice the legitimate interests of the right holder". This situation has to be distinguished from Art. 5(2) exemptions, that are only optional and leave more space to the member states. BGH recently filed few cases that exactly ask whether the national transposition of Art. 5(2) type of exemption, comply with the three step test. Thus in my opinion, CJEU will give private copying exemption different three-step-test-treatment that it gave to transient copy exemption in Infopaq II. And this is where study of IViR comes into the play. Executive summary of the study reads:

This report presents the results of a consumer survey on the downloading and streaming of music, films, TV series and programmes, games and books. The authors make a distinction between four channels: buying material on physical formats in an offline or online store, paid-for downloading or streaming from a legal source, free downloading or streaming from a legal source and  downloading or streaming from an illegal source. In May and June this year 3,118 members of the CentERpanel, an online household panel that is representative of the Dutch population, were invited to take part in the survey. The response rate was 64.4%, or 2,009 fully completed questionnaires.

IViR study treats downloading and streaming probably for practical reasons together. According to IViR's findings, around 27 % percent of Dutch respondents engage in downloading or streaming from illegal sources. IViR also found that:

About one in five people who download from illegal sources had in the past year bought a CD or LP that they had previously downloaded from an illegal source. The same was found for DVDs, Blurays and for printed books. The opposite – downloading a book from an illegal source that had been previously purchased in print – is also very common. This shows that for a substantial group of consumers printed books and e-books are complementary. Personally uploading purchased material is done by no more than 5% of the Dutch population.
Here we see that those who download from legal and illegal sources without paying are younger than those who pay for downloads and streams. In the case of books, the popularity of illegal content hardly declines with age up to 54 years. Men are more likely to use free legal sources and illegal sources than women. [..] Downloading from an illegal source, on the other hand, shows no significant correlation with level of education. [..] People who download from an illegal source are more frequently also consumers from legal sources, and they are more likely go to concerts and the cinema and to purchase derived products.

Further interesting finding is one about the website blocking. The study states that:

The recent blockade of the file sharing site The Pirate Bay has had next to no effect on consumers. More than three quarters of XS4ALL and Ziggo subscribers said they had never downloaded, or had stopped downloading from an illegal source before access to the site was blocked. So the blockade has no implications for them. Of the remaining 23.8% of Ziggo and XS4ALL customers, about three quarters said the blockade had not affected their downloading habits and a mere 5.5% said they now download less, or had stopped downloading altogether. The expected reaction of customers of providers that had not yet enforced the court-ordered Pirate Bay blockade at the time of the survey was found to be comparable.
Quite interesting finding. If this is the case, than all the website blocking injunctions are basically big waste of resources on the both sides (ISPs and rights holders). Consider that from 100 % of the infringing customers that are the target group of the block of an ISP (24 % of all customers), only 20 % percent (5.5 % of all customers) would change their behaviour. In other words, the increased transaction costs needed to obtain the illegal material after the website blockage (as argued by Mr. Justice Arnold in NewzBin 2), will have only 20 percent effect among the relevant public. The website block will be thus issued only for 5.5 % percent of all the customers of an ISP.

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