IT hardware lobbies and rights holders like music collecting societies have been at war over the amount of levies that can be slapped on devices like CDs and USB keys, which can copy music, books and audiovisual material.
Broadly speaking, rights holders want higher levies on more devices, while the hardware industry wants lower levies on fewer devices.
As part of the EU's Intellectual Property Rights Strategy, unveiled yesterday, the European Commission said it would invite a high-level independent mediator to get the disagreeing lobbyists to find a compromise on levies and the devices that have them.
Last year the European Court of Justice ruled out levies on Apple's iPods as these were not strictly made for copying, like printers or MP3s, but a Commission source said all devices would be part of the upcoming dialogue.
Getting the rate right
Currently, the difference in levies between countries can be very large. The tax on an inkjet printer is €12 in Germany and a staggering €178.84 in Belgium, according to figures from Hewlett Packard.
According to the same study, levies on mobile phones which have an in-built music player smaller than 4GB are less than a euro in Italy, just over €2 in Belgium and €12 in Austria.
The IT hardware industry claims it pays €1.88bn in administrative costs related to levies annually as it tries to satisfy different regimes in different member sates, according to a study conducted by the Free University of Brussels (ULB).
As soon as he or she is appointed, the EU mediator will take over where the Commission left off: to get the hardware producers and rights holders representing the creative industries to agree on how levies should be fixed and on which devices.
Stakeholders allegedly disagree on the fine points of these calculations, such as whether memory size or frequency of use should determine the levy's amount.
The chosen candidate, who will ideally have a handle on IPR law, will be appointed this year and will need the right "engaging personality and personal authority" to get the two sides back on the right track, a Commission source told EurActiv.
Since the outset of talks brokered by the European Commission in 1995, not one single note of progress has been made, the source added.
GESAC, the European umbrella group of collecting societies, disagrees. Since 2008 the two sides were beginning to see eye to eye on how to fix levies, what kind of devices should have them and on whether exporters should pay levies, Veronique Desbrosses, GESAC's general-secretary, told EurActiv. Talks then spectacularly broke down in 2010.
Desbrosses insists that rights holders like GESAC will not give in to demands from industry to drop levies entirely.
The Business Software Alliance, an industry group, has long called for the phasing out of private copying levies, while other lobbies want an alternate system which would increase the cost of the original copyrighted material, like a movie, but slash levies on copies made.
GESAC also faces criticism that collecting societies reaping profits from levies do not remunerate artists unless they are harassed to do so. "Often artists don't even know their work is being copied," said an industry source, who did not wish to be named.
According to a report by Younison, a lobby representing musicians, on average, private copying levies represent between 4 and 10% of European collecting societies' income, while artists see only a tiny fraction of the money.
Like most contested regulation, there are studies which can prove either point. Depending on their loyalties, lobbyists are producing studies which can show either that levies don’t make it to artists' bank accounts or that they do, but that online piracy is decreasing record company profits and with that, collecting societies' revenue.
These are the many questions the mediator will have to weigh.