IT giants fight copying levies

By Anna McLauchlin

Date: 06/04/06

Makers of consumer electronic goods are stepping up their opposition to copyright levies imposed on their products in preparation for a European Commission recommendation expected later this year.

The Copyright Levies Reform Alliance (CLRA), representing companies including Microsoft, Apple, IBM and Philips, was launched on Wednesday (5 April) demanding that the Commission put more pressure on member states to phase out levies.

The levy system was introduced in the 1960s to compensate artists for legitimate private copying. Fixed by so-called collecting societies that then redistribute them as royalties for artists, they can vary widely across the EU. On a 30-gigabyte iPod music player for example, levies range from 2.56 euro in Germany to 90.60 euro in Spain.

Under a 2001 EU law on copyright, compensation for artists should take account of digital rights management (DRM) - technology that controls access to on-line music or movies. In practice, this means that as DRM increases levies should decrease.

But CRLA claims that this has not yet been the case in many countries, and the makers of consumer electronic goods are paying around 2 billion euro to collecting societies each year in European levies. The levies are imposed not just on media players but also on multi-function devices, said Mark MacGann, director-general of the European Information & Communications Technology Industry Association (EICTA), one of five industry associations in the CRLA. This means, he claimed, that the consumer pays several times over, he added, highlighting the case in Germany, where a consumer can pay around 150 euro in levies on personal printers, scanners, computers and DVD drives.

"We are asking the Commission to come up with strong guidelines on the implementation of the EU copyright directive," MacGann said. "Five years after it came into force, it is still not being properly applied and this is leading to serious problems for our industry."

But collecting societies argue that while DRM technology controls access to online content, it does not yet remunerate artists for the private copying that ensues.

For example, iPod owners can download a song for 99 euro cents from the Apple iTunes website. But the licence fee paid to collecting societies by Apple which is included in this cost only covers the initial download and makes no allowance for the possibility that the consumer can then make several copies.

Under national law in all but five member states - the UK, Ireland, Luxembourg, Cyprus and Malta - artists are entitled to royalties on private copies and as such, collecting societies say, the levy system is fair.

"If DRM allowed artists to be directly remunerated each time a private copy was made, then getting rid of levies might be fair. But this is not the case today," said Isabelle Prost from GESAC, the European association of collecting societies.

The Commission is currently working on an impact assessment on the fairness of levies, which will be published after Easter at the same time as the launch of a public consultation on the issue. Based on the findings, Internal Market Commissioner Charlie McCreevy will publish a recommendation in the autumn as to when and how DRM should replace levies.

Article reports that producers of consumer electronic goods were stepping up their opposition to copyright levies imposed on their products in preparation for a European Commission recommendation expected later in 2006.

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