Private copying levy in EU’s firing line

Users can copy CDs for their own use without breaching copyright law. [glacial23/Flickr]

The private copying levy, invented in France in the 1980s and now commonplace across the EU, is a subject of friction between rights holders and distributors. Critics highlight the system’s lack of transparency and unequal application across the EU. EURACTIV France reports

Private copying is set to become a growing irritant in the copyright reform debate currently under way in Brussels. The issue brings rights holders out in a cold sweat, and has hardware manufacturers and distributors rubbing their hands with glee.

Private copying is one of the exceptions to copyright law. Countries can decide not to apply copyright rules when a user reproduces a work for their own personal use, when burning a CD or transferring music to a hard drive, for example.

This is a gain for the consumer, but clearly a loss for the artist that owns the rights.

Disparate situation

To counter this financial loss, member states have put in place their own systems of compensation for musicians and producers whose works circulate without any financial benefit.

But compensation systems vary considerably from one member state to another.

In France, consumers have to pay a private copy levy whenever they buy a USB stick, an external hard-drive or any other hardware that can be used to store music or films. This levy is then paid to rights holders via copyright management companies.

“Each member state has a different approach to these levies. The United Kingdom, Finland and Spain have simply got rid of them, while Germany and France have drastically increased them,” industry association DigitalEurope said in a statement.

The industry group, which represents tech giants such as Apple, Dell and Google, has called on Brussels to “completely abolish” the system.

“In Spain, the abolition of the levy slashed the fund from tens of millions of euros to only €5 million,” said Hervé Rony, the president of the Civil Society of Multimedia Authors (SCAM), which defends author’s rights.

The United Kingdom also abolished the levy without implementing another mechanism, and Finland replaced it with a state-financed compensation fund.

The French private copying levy raised €208 million in 2013, which represents almost 60% of the total collected in the European Union. In 2010, these levies raised €600 million across the EU, according to the European Commission.

Adaptation to the cloud

One of the challenges of reforming private copying legislation is to ensure it is flexible enough to adapt to the evolution of technology.

One subject up for reconsideration is the fact that this tax is currently not applied to “cloud” storage, which shares many of the same characteristics as the electronic devices and hardware to which the levy does apply.

Loïc Rivière, the delegate general of the French Association of Software and Internet Solutions Editors (representing Google, Amazon and others), said, “We are nearing the end of private copying by users, especially with the increased use of the cloud. We should no longer talk about private copying because today’s users buy access to creative content, not the content itself.”

Harmonisation on the horizon

In her draft report on copyright reform, the German MEP Julia Reda, of the Pirate Party, called for the “adoption of harmonised criteria” on the definition of harm caused to rights holders from private copying.

“Julia Reda’s proposals go in the right direction because in France our system has been adrift for years, to the point where it causes competition problems between countries,” said Rivière. Consumers can easily get around the differences in the price of hardware from one EU member state to another.

But not everyone is impressed by the arguments of the Pirate Party, which is famous for supporting a completely free internet.

“The Pirates think we should have free access to everything,” said Jean-Marie Cavada, a French MEP who is president of the European Parliament working group on copyright reform. He believes multinational companies have more to gain from the abolition of private copying levies than consumers do.

Distributors of hardware could see their profits increase. Under the current system they tend to align their prices from one country to the next, regardless of the private copying laws, and absorb the losses from the tax in their profit margins. 

Copyright holders hold the exclusive right to authorise or prohibit the reproduction of their works (books, films, music, etc), under the 2001 Directive on the harmonisation of certain aspects of copyright and related rights in the information society.

The text allows member states to make exceptions to this right, for example with private copying. But exceptions are not harmonised across the EU.

The owners of rights must be compensated for lost revenue if their works are copied as one of these exceptions.

It is common for member states to provide this compensation by levying a tax on electronic hardware that can be used to store copies of cultural works (like blank DVDs, recording equipment, MP3 players, photocopiers, etc). 

  • 12 March: Auteurs&Co 2015 meeting: Single market... Single culture? - Scam
  • 16 April: European Parliament Committee on Legal Affairs votes on amendments to the report by Julia Reda.
  • 20 May: Plenary vote on report. 

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