European hotels must pay royalties for the music and television programs they offer in their rooms, according to a ruling Thursday (Dec. 7) by the European Union's Court of Justice.

The Luxembourg-based court -- the highest in the EU -- upheld a complaint by Spanish society of authors, composers, and publishers, SGAE, against hotel chain Rafael Hotels.

SGAE argued that the hotel chain broke copyright law by installing TV sets in hotel rooms and playing ambient music within the hotel. The court agreed, stating: "The distribution of a signal by means of television sets by a hotel to its customers is protected by copyright."

The EU's 2001 Copyright Directive says authors have exclusive right to authorize or ban any communication to the public of their works, the court said. "The private or public nature of the place where the communication takes place is immaterial, as the directive requires authorization by the author for communication," the court said.

The court said that when a communication is made by an organization other than the original one, a fresh authorization is needed -- so a hotel receiving TV signals must pay separate copyright fees to rebroadcast them into the guest rooms. "If, by means of television sets thus installed, the hotel distributes the signal to customers staying in its rooms or present in any other area of the hotel, a communication to the public takes place, irrespective of the technique used to transmit the signal," the court said.

A hotel's provision of TV programs was done with an economic benefit in mind and the potential audience is sufficiently great for this service to be considered as communication to the public, the court added. It rejected the argument that a hotel room is a private space.

The ruling was greeted with dismay by HOTREC, which represents European associations of hotels, restaurants and caf?s. "It is an unfortunate decision for the whole industry," said HOTREC chief executive Marguerite Sequaris. "Hotels should not have to pay copyright fees for making TV programs available to their guests in the private sphere of a hotel room."