VIENNA (Reuters) - EU countries can under some circumstances collect a levy on blank recording media as a tool to ensure artists get fair rewards for their work, a levy that Amazon.com Inc had fought, the European Court of Justice ruled on Thursday.
The case arose from an Austrian copyright collection agency's attempt to bill Amazon nearly 1.9 million euros ($2.4 million) for blank media such as cassette tapes, CDs, memory cards and MP3 players sold in Austria in the first half of 2004.
The ruling does not decide the dispute, which is still before the Austrian supreme court, but does become binding on other national courts handling a similar issue.
It was not immediately clear which artists stand to benefit from the collection of any levy from Amazon.
Amazon did not immediately respond to an email seeking its reaction to the ruling.
The Austro-Mechana agency had also sought a look at Amazon's books to see what other charges were due from 2002 to 2004. A Vienna court agreed Amazon should produce records, but reserved judgment on the payment claim, a ruling upheld on appeal.
Arguing that the levy violates EU law, Amazon took the case to Austria's supreme court, which then asked the EU court to interpret whether this was the in fact the case.
In its ruling published on Thursday, the Luxembourg-based Court of Justice said EU law does not allow the private copying levy to be collected in cases where the intended use is clearly not the making of private copies, according to a press release.
"However, under certain conditions, EU law does not preclude such a system of a general levy with the option of reimbursement in cases where the intended use is not the making of private copies," it added.
Austria's supreme court now has to verify whether practical difficulties justify such a system and "whether the right to reimbursement is effective and does not make repayment of the levy paid excessively difficult".
It allowed the "rebuttable presumption" that individuals are using recording media for private purposes on two conditions: practical difficulties in determining whether the use is private must warrant such a presumption, and the presumption must not trigger the levy in cases where media are clearly used for non-private purposes.
Editing by David Holmes