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Private copying is one of the most contested areas of EU copyright law. This paper surveys that nebulous area and examines the issue of copies made from unlawful sources in light of the ECJ’s ACI Adam decision. After describing the legal background of copyright levies and the facts of the litigation, the paper scrutinizes the Advocate General’s Opinion and the Court’s decision. The latter is analyzed against the history of copyright levies, the ECJ’s extensive case law on the private copying limitation and Member States’ regulation of unlawful sources. This paper further reflects on the decision’s implications for end-users, rights holders, collective management organizations and manufacturers/importers of levied goods. It concludes that, from a legal and economic standpoint, the decision not only fails to be properly justified, but its consequences will likely diverge from those anticipated by the Court. Most worrisome is the Court’s stance on the three-step test, which it views as a restrictive, rather than enabling, clause. In its interpretation of the test, the decision fails to strike the necessary balance between competing rights and interests. This is due to multiple factors: overreliance on the principle of strict interpretation; failure to consider the fundamental right of privacy; lack of justification of the normative and empirical elements of the test’s second condition; and a disregard for the remuneration element in connection with the test’s third condition. To the contrary, it is argued that a flexible construction of the three-step test is more suited to the InfoSoc Directive’s balancing aims

Private Copying and Downloading from Unlawful Sources