Market Insight

Spanish anti-piracy law enacted by new government

January 12, 2012

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Spain's Sustainability Economic Law - which includes clauses covering intellectual property rights and online piracy and is popularly known as the Ley Sinde - has been ratified by the new centre-right Partido Popular Government after just two weeks in office.

The Ley Sinde was officially voted through the Spanish Parliament in March 2011 and was scheduled to come into effect by summer 2011. However, faced with public pressure and a worsening general economy, the former Socialist Government postponed the introduction of the controversial law until after the General Election (November 2011). The new Government, voted in on a landslide populist mandate, quickly pushed through Ley Sinde in its first month of power.

The anti-piracy legislation that has now been made law is broadly the same as that proposed by Spain's previous government. As reported by IHS Screen Digest in March 2011:

'The Ley Sinde aims to protect IP rights on the internet by allowing IP rights owners to report suspected IP breaches on the internet formally to a newly-created body, the Intellectual Property Committee (IPC). The approved version of the law enables the IPC to request websites suspected of being in breach of IP rights to remove offending content within 48 hours, during which the defendant may also present opposing evidence. Within three days the IPC must issue a resolution and the appointed judge will rule whether the suspected website is guilty of breaching IP rights. The IPC may also request court orders in order to identify owners of suspected piracy websites and order websites to withdraw pirated content on websites. In these latter instances the appointed judge must approve or decline court orders within 24 hours. Therefore, any final decisions by the IPC must be ratified by a judge.'

In addition to passing the original Ley Sinde proposal, the new Government has also removed with immediate effect the so-called 'digital canon', a controversial levy on blank recordable media to compensate right holders for any illegal copying of content. Critics of the digital canon have long argued that this tax misleads consumers into thinking that copying of copyright files is acceptable since a tax had already been paid to rights owners. The Spanish Government has said it will come up with an alternative tax to substitute for the digital canon.

Spain has long been a hotspot for content piracy. In the 1990s, the country was plagued by street sellers of counterfeit optical discs and more recently internet piracy has become widespread. The lack of effective copyright protection laws - coupled with the arguably ambiguous message propagated by the digital canon tax - has been blamed for lax attitudes to online intellectual property rights among Spanish consumers.

IHS Screen Digest research indicates that the Spanish video business has more than halved in value since 2006. 2010 was the fourth consecutive year of decline in consumer spending on physical video, with total spending on the sector down by 14% year-on-year to €339.0m ($450.0m).

The wider industry will be keenly observing the Spanish market in 2012 to see whether the new laws have any impact on levels of illegal downloading and/or the double digit declines experienced by the legitimate physical home entertainment market.

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