Hotels are not cable network operators
ECJ ruling shakes up established licensing system / High legal uncertainty for hotels
Prof. Dr. Stefan Sporn, Honorary Professor at the TH Cologne and Spokesman of the Advisory Board of the Cologne Research Center for Media Law*
Hotels are not cable network operators! This was decided by the European Court of Justice (ECJ) in Luxembourg in a landmark ruling on the Cable and Satellite Directive (CabSat) (C-716/20 v. 8.9.2020). TV broadcasters cannot thus invoke a „cable retransmission“ ancillary copyright if they want to prohibit the illegal use of their signals in hotel rooms in the EU. This puts a provisional end to a case RTL has been waging against the Portuguese hotel chain Pestana for almost ten years. The ruling has considerable implications: it puts an end to an established licensing system for all rights holders, is probably a Pyrrhic victory for the hotels, and clarifies the TV broadcasters‘ strategies for further legal enforcement. However, the use of TV signals in hotel rooms remains illegal in principle.
The core question of the ECJ’s ruling was whether it constitutes „cable retransmission“ when a hotel receives TV signals via satellite antenna and then retransmits them to the hotel rooms via a cable network within the hotel. Almost all hotels in the European Union refuse to pay license fees to „free-to-air“ broadcasters for use in hotel rooms. This was also the case with the Portuguese hotel chain Pestana, which used the German TV station in guest rooms. RTL then sued Pestana to clarify the legal issues. After the two courts of instance dismissed the broadcaster’s action, the Portuguese Supreme Court decided to submit the question of a hotel’s status as a cable network operator to the ECJ.
With its decision, the Court declared CabSat’s established rules of the game for rights advertising in hotels to be inapplicable. What does this mean? Until now, the hotels received all the copyright from the collecting societies and the rights of the TV broadcasters from them directly. This was clear, simple, tried and tested, and legally secure. This is now over for certain constellations.
First of all, the obligation of all copyright holders such as composers, authors, etc. to be able to enforce their rights only through collecting societies has been removed. Thus, the collecting societies can most likely no longer guarantee to fully license rights to hotels and are weakened in their position. Strong rights holders could take their chance and contact the hotels directly with demands, possibly even with claims for omissions from broadcasts. From now on, hotels will have to work with a high degree of legal uncertainty and a large number of claimants; it is unlikely to get any cheaper for them. And to top it all off: they are not rid of the TV stations either. For two reasons: While the broadcasters cannot invoke „cable retransmission“ in the described constellation, in almost all EU countries „cable retransmission“ is merely a specially regulated part of an overarching all-general right of „retransmission“ (without „cable“). With the ruling, it is true that the special exercise rules in the area of hotels now no longer apply. However, the right itself, i.e. the ancillary copyright of „retransmission“ is not affected by this and undoubtedly continues to apply to hotels. And if, exceptionally, such a right does not exist (as is probably the case in Portugal), then the broadcasters are still left with their own copyrights, which – as mentioned – they can also assert directly against the hotels.
The ruling creates strategic clarity for TV broadcasters as to which tools can be used against illegal use in hotels. Hotels, on the other hand, have gained nothing in principle; in fact, they face greater challenges than ever before in licensing TV broadcasters for their guest rooms in most countries in Europe.
*The author represented RTL as a party in the proceedings described above in his capacity as managing director of RTL International GmbH.