European Commission Proposes Forum On Future Of Copying Levies

By David Cronin for Intellectual Property Watch
BRUSSELS – The European Commission has recommended that a forum involving creative artists and the consumer industry should be established to determine the future of private copying levies.

Twenty-one of the European Union’s 27 countries impose oft-criticised surcharges on equipment – ranging from blank cassettes to MP3 players and mobile phones – that may be used for recording or copying images or sound. While such levies are officially designed to compensate musicians or authors for the use of their work, they have attracted much criticism for allegedly being imposed in an arbitrary manner and for hampering cross-border trade within the EU.

Charlie McCreevy, the EU commissioner for the internal market, has suggested that a forum of those directly affected by private copying levies should be set up with a view to finding “common ground” on the surrounding issues between the collecting societies, which administer levies, and electronics firms, which are required to pay them. Artists and consumers groups should take part in this forum, too, he told a Brussels conference on 27 May.

Among the topics that the forum could address, according to the Commission, are how companies that succeed in not paying the levy can be tackled. Such “free-riders”, he said, place an unfair burden on legitimate companies.

The Commission also said that the forum should examine how the practicalities of collecting a levy on goods exported between countries that apply differing levies can be improved and whether broad principles can be worked out to determine how levies can be calculated to take into account new technological developments.

The forum will not have a mandate to draw up a legislative proposal but simply to present a report to the Commission, which has suggested that another conference on private copying should be held in six months time so that any progress made can be assessed.

In a paper published earlier this year, the Commission estimated that 6 percent of all imports and exports traded within the EU potentially attract a private copying levy.

Yet several participants in this week’s conference complained that the use of the levy is opaque.

Kelvin Smits, a Belgian songwriter and founder of the music industry lobby group Younison, said that artists rarely receive payments as a result of the levies, even though “collecting societies are – in our name – collecting humungous amounts of money.”

After conducting a survey of Belgian acts, all of which have featured in the country’s top 100 best-selling record charts, he estimated that the levies account for as little as 0.75 percent of their total earnings.

But Thierry Desurmont, vice-president of the French collecting society SACEM, said that 5 percent of the incomes of artists in his country derive from copying levies. “Artists and authors are by no means rich, contrary to what some people believe,” he added. “This is a substantial sum and should not be undermined.”

The proliferation of music and video downloading has made collecting copyright levies more difficult, he added, stating that SACEM’s revenues fell from 150 million euros in 2003 to 120 million last year.

“I wonder why the development of digital technology calls into question the private copying levy,” he said. “My question is whether authors have less need of protection in the digital world than in the analogue world. It’s not hard to say no to this question.”

Irena Bednarich, government affairs manager in Hewlett Packard’s Brussels office, said that the “lack of clarity” over how levies are calculated is “bringing us to a lot of litigation.” Between 1999 and 2005, she said, 85 percent of all levies sought in Germany were contested, citing estimates that industry would have to pay out over 3 billion euros if all the levies in questions were upheld in court.

A computer printer with an average price of 100 euros would be subject to a levy of 102 euros in Germany but just 15 euros in Spain, she noted.

Joe Gote, a spokesman for the Recording-media Industry Association of Europe (RIAE), said there is “widespread market distortion caused by the levy differences” between EU countries. For example, he added, there is a 500 percent difference between a levy on a rewritable DVD sold in France and one sold in Germany.

“Levies on products are not working and will never work because products move across borders,” he said. “A product-based levy system is a game of ‘catch me if you can’.”

Contending that illegal downloading from the internet is a far greater problem than authorised private copying, Gote advocated that the current system should be replaced with one whereby a flat rate is imposed on home internet connections.

British member of the European Parliament (MEP) Sharon Bowles said that private copying levies were first introduced in the 1960s at a time of analogue recordings and that their scope has widened considerably in the intervening decades.

“They were never intended as compensation for illegal bulk copying,” she added. “The remedy for that is prosecution.”

Mark MacGann, director-general of the European Information and Communications Technology Industry Association (EICTA), said that a system based on transparency and “on the basis of real harm” to artists caused by private copying should be worked out across the EU.

Marco Pierani from BEUC, the European Consumers Association, said that no EU government had yet carried out an assessment of harm caused to artists by private copying.

Isabelle Feldman, legal affairs director with ADAMI, a French association of musical and theatrical performers, said that the private copying levy system in her country is “fully transparent”.

Nonetheless, she agreed that remuneration to artists from levies across Europe is “insufficient and perhaps also incomplete.”

David Cronin may be reached at info@ip-watch.ch.