On November 10, 2016, the Spanish Supreme Court ("TS") issued a ruling annulling Royal Decree 1657/2012 of December 7, which regulates the payment of fair compensation for private copying financed from the General State Budget (the "Royal Decree"), as it does not guarantee that the cost of fair compensation is paid by the users of private copies.

As mentioned in this blog, the European Court of Justice ("TJUE") stated several times (in Padawan, Stichting de Thuiskopie, Amazon, etc.) that compensation schemes for private copying adopted in Spain are contrary to the law of the Union (first the so-called "digital canon" charging compensation in the form of a higher purchase price of reproduction equipment and later, the system based on including a specific account in the General State Budget).

The TJUE argues that article 5.2 b) of Directive 2001/29/CE should be interpreted as meaning that the fee cannot be applied to users other than natural persons acting for purposes other than those of making copies for private use. The current compensation scheme financed from the General State Budget, which applies indiscriminately, contravenes the law of the Union. Furthermore, the Spanish scheme does not establish an effective mechanism, like, for example, the Italian scheme, for exoneration or for the fee to be returned to the users that are exempt from paying the fee (even though the TJUE also declared the Italian scheme contrary to the law of the Union, as discussed here).

Based on the above and, in particular, in accordance with the TJUE ruling of June 9, 2016 (C-470/14) issued in response to the question referred to it by the TS, the TJUE has annulled the Royal Decree.

In conclusion, pursuant to the principle of primacy of Union law, and the Simmenthal case law, it is the courts’ duty not to apply legal rules that are contrary to it. Therefore, it is not necessary to wait until the appeal filed with the Constitutional Court under article 1.2 of Law 21/2014 is resolved, to consider it inapplicable.