EU seeks end to double tax for private music copies

Analysis

Consumers who pay copyright fees on PCs and portable music players shouldn't be taxed a second time when they download music or films on the Internet, EU regulators said in a draft recommendation.

The fees, which can add as much as €30 ($38) to computer prices, are imposed by artists' groups to compensate for private music copying. The recommendations back efforts by computer equipment makers such as Intel Corp. to limit copyright fees as newer technologies provide an insurance policy against illegal downloads. „No obligation for further payment in another form may arise in relation to the private copying by the consumer” following an initial fee, according to the Brussels-based European Commission's 13-page draft, which was obtained by Bloomberg News. 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 Inc.'s iTunes and Napster Inc. 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.

The draft calls on European Union 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.” It also said nations should outlaw fees for minimal private copying. The recommendation was circulated among departments in the commission, the 25-nation EU's executive arm, last week. Final recommendations, which won't be binding on EU governments, will be made before the end of the year. An EU copyright law on the books since 2001 requires the artists' groups, known as royalty collecting societies, to reduce fees as more devices and services use software to thwart unauthorized copying. 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.

Depriving artists of the fees would be a „legalized holdup,” award-winning Belgian filmmaker Luc Dardenne said at an October 18 Culture First press conference. PC makers have complained that copyright fees distort trade in the EU because the charges vary widely between countries. The UK, Ireland, Malta, Cyprus and Luxembourg don't impose any charges, while fees in 19 countries differ widely. EU law bars governments from putting up barriers to internal trade. The draft says artists' groups and copyright holders should come up with a new system to collect fees „that does not result in obstacles to the free movement of goods and services.” The draft also opposes copyright fees on „small consignments” of blank discs and digital music players. (Bloomberg)

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