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EU's McCreevy seeks “fair deal” on music player fees

Analysis

European Union regulators are worried that consumers aren't getting a “fair deal” when artists' groups charge fees for private music copying, said Charlie McCreevy, EU internal market commissioner.

McCreevy said artists' groups may not be taking “full account” of anti-piracy software used by Internet sites when they set their fees on music players and PCs. An EU copyright law on the books since 2001 requires the artists' groups, known as royalty collecting societies, to reduce their levies as more devices and services use software to thwart unauthorized copying. “We want a system of compensation that is predictable, fair and sustainable into the future,” McCreevy said in a speech yesterday at the European Parliament. “We also wonder whether consumers are getting as fair a deal as they should.” McCreevy's comments comes as hardware makers, such as Intel Corp. and Apple Computer Inc., put pressure on the commission to get the artists groups to lower the fees, which they claim put an unfair tax on devices. The commission plans to issue recommendations on copyright levies “shortly,” McCreevy said. McCreevy said the fees, which vary from country to country in the 25-nation EU and can add as much as €90 ($115) on Apple Computer's 30-gigabyte iPod, “may be disrupting trade in the internal market.”

In 2005, artists' groups collected €560 million in nine EU countries on the sale of computer equipment. The figure would have been as high as €950 million had hardware makers not filed court appeals, according to the Business Software Alliance, which represents equipment makers. McCreevy said the commission questioned whether the artists' groups are considering the increase use of “technical means” to prevent illegal copying when they set fees on iPods and PCs. A draft commission proposal calls on EU governments to ensure that the amount of fees “takes into account the degree of use of a technological measure by comparing the licensed use with any other actual use on a sliding scale.” The draft also said nations should outlaw fees for minimal private copying. The recommendations back efforts by computer equipment makers such as Intel to limit copyright fees as newer technologies protect against illegal downloads.

Equipment makers say consumers are often forced to pay copyright fees when they buy PCs and again when they download music legally from online services including Apple Computer's iTunes and Napster Inc. A group called Culture First, representing composers, singers and filmmakers, argues that new technologies fail to stop illegal copying. Songs downloaded from iTunes can be put on disks and copied without limit, the group says. Illegal downloads cost the music industry $4.6 billion last year, according to the International Federation of the Phonographic Industry. (Bloomberg)

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