The matter at hand

Austro-Mechana is an Austrian copyright-collecting society whose objects include collecting the ‘fair compensation’ for private copying provided for in Austrian law pursuant to Article 5(2)(b) of the Copyright Directive. Under the Austrian law, this fair compensation is collected from “persons who, acting on a commercial basis and for consideration, are first to place recording material or reproduction equipment on the market from a place located within or outside the national territory”.

Amazon, with headquarters in Luxembourg and Germany, sells recording materials through the internet in (inter alia) Austria. According to Austro-Mechana, Amazon is first to place recording materials on the market in Austria, and as a result is liable to pay the fair compensation. On this basis, Austro-Mechana brought proceedings before the courts in Austria seeking payment of the fair compensation from Amazon.

The dispute before the ECJ concerns the question of whether the Austrian courts have international jurisdiction in these proceedings under Article 5(3) of Brussels I, which provides that a person domiciled in a Member State may, in matters relating to tort, delict or quasi-delict, be sued in the courts of the Member State where the harmful event occurred or may occur.

The judgment of the ECJ

The ECJ recalls that according to settled case law (including Brogsitter, C‑548/12 and Kolassa, C‑375/13), the concept of ‘matters relating to tort’ covers all actions which seek to establish the liability of a defendant and do not concern ‘matters relating to a contract’ within the meaning of Article 5(1)(a) of Brussels I (paragraph 32). Therefore, the ECJ starts by determining whether Austro-Mechana’s claim for payment of the fair compensation concerns a ‘matter relating to a contract’ within the meaning of Article 5(1)(a) of Brussels I.

In that connection, the ECJ holds that, although the conclusion of a contract is not a condition for the application of that provision, it is required that there exists a “legal obligation freely consented to by one person towards another and on which the claimant’s action is based” (paragraph 36). Considering that the obligation to pay Austro-Mechana the fair compensation for private copying was not freely consented to by Amazon, but was imposed on Amazon by law, the ECJ concludes that this obligation does not constitute a ‘matter relating to a contract’ within the meaning of Article 5(1)(a) of Brussels I (paragraphs 37 and 38).

The ECJ continues by assessing whether Austro-Mechana’s claim constitutes an action which seeks to establish the liability of Amazon within the meaning of the case law cited above. With reference to (inter alia) its judgment in DFDS Torline (C‑18/02), the ECJ holds that such is the case “where a ‘harmful event’ (…) may be imputed to the defendant” which requires “that a causal connection can be established between the damage and the event in which that damage originates” (paragraphs 40 and 41).

The ECJ rules that this is the case here, considering that “the action brought by Austro-Mechana seeks to obtain compensation for the harm arising from non-payment by Amazon” of the fair compensation provided for in the Austrian law pursuant to Article 5(2)(b) of the Copyright Directive (paragraph 42) and that this fair compensation “intends to compensate authors for the private copy made without their authorisation of their protected works, so that it must be regarded as compensation for the harm suffered by the authors resulting from such unauthorised copy” (paragraph 43).

In that light, the ECJ rules that the failure by Austro-Mechana to collect the fair compensation from Amazon constitutes a harmful event within the meaning of Article 5(3) of Brussels I (paragraph 44) and that Austro-Mechana’s claim seeks to establish the liability of Amazon, since that claim is based on an infringement by Amazon of the Austrian law, which is an unlawful act causing harm to Austro-Mechana (paragraph 50).

It therefore “follows that, if the harmful event at issue in the main proceedings occurred or may occur in Austria, which is for the national court to ascertain, the courts of that Member state have jurisdiction to entertain Austro-Mechana’s claim” (paragraph 52).

The ECJ concludes that “the answer to the question referred is that Article 5(3) of [Brussels I] must be interpreted as meaning that a claim seeking to obtain payment of remuneration due by virtue of a national law, such as that at issue in the main proceedings, implementing the ‘fair compensation’ system provided for in Article 5(2)(b) of [the Copyright Directive], falls within ‘matters relating to tort, delict or quasi-delict’, within the meaning of Article 5(3) of that regulation” (paragraph 53).