Brussels, 23/06/2006 (Agence Europe) - The Commission is currently consulting with industry over a special system for private copies, whereby Member States can authorise copies for private use as long as the copier makes a payment in the form of a tax on blank cassettes, CDs and DVDs and electronic equipment (iPODs, MP3 players and mobile phones). The Commission is planning to publish a recommendation by the end of the year recommending that some kinds of electronic equipment be exempt from the new levy system. Concerned about the loss of income such changes would entail for copyright holders, organisation representing artists (collective management groups, royalties collection agencies and authors and musicians' federations) argue that the current fee system does not hamper the sale of electronic equipment or the development of online music and broadcasting in any way. User groups (broadcasters and online music suppliers) and industry, however, slam the system at archaic and distorted, leading to loss of income.
Addressing the European Parliament's Legal Affairs Committee on Wednesday 21 June, EU Internal Market Commissioner Charlie McCreevy said: 'Levies - on media and equipment - impose a cost on both producers and consumers. We need to be sure that this is the most appropriate way to reward rights holders and to examine whether it is putting a brake on innovative products and services. Through digital rights management, there are new technological means through which rights holders can, more directly, protect their interests. The key question is whether existing levies imposed on digital devices should be reduced or phased out and be replaced by direct payment systems. We have launched a consultation to get the views of consumers and stakeholders.' A spokesperson for the Commissioner said the next day that this was a priority area for the Commission but no decisions had yet been taken regarding how and when. The Commission appears at this point to favour the idea of exempting mobile phones from the fee system, however, because their main use is not make copies.
GESAC, the European Group of Societies of Composers and Authors, whose main task is collecting royalties for protected work by artists or fees for making private copies, believes the current system and the current financial level of levies on media and electronic equipment do not hinder the development of the electronic industry in any way or the development of online music services. Based on forecasts for the year 2005, it notes that there were similar proportions of households owning iPODS or MP3s in the UK (25%), France (22%) and Germany (22%), but the UK is the only one of these three countries not using a levy system.
Neither would this system seem to have any effect on blank CD sales or downloading of music from the internet: in 2004, 398 million blank CDs were sold in Germany, compared with 237 million in the United Kingdom in the same year; at least 30.5 million pieces were downloaded legally in Germany on 2005, compared with 26.4 million in the UK. Finally, performing rights societies say that they are constantly adjusting copyrights in line with market forces, for example reducing from €43 to €8 the tax on a “nano iPod” in France in November 2005.
In a joint press release, AEPO ARTIS, which unites 27 collective management organisations, and the international federations of actors (FIA) and musicians (FIM) say that the current system of payment for private copying is vital revenue for artists representing some 35% of the total sum taken in by collective management organisations and is of significant support to the cultural sector. According to these organisations, a survey by the British Consumer Council showed in the United Kingdom, where private copying is illegal, that more than half the British population break the law by copying CDs for their private use.
The industry analysis is quite different. Speaking on behalf of the Business Software Alliance (Apple, Hewlett-Packard, Sony), European-American Business Council (EABC), part of the record industry (RIAE) and the European Digital Media Association (EDiMA), the Alliance for the Copyright Levies Reform Alliance considers that “the €1.2 billion” in copyrights collected in 2005, in fact, brought about losses of about “€2.1 billion” for the economy as a whole (see EUROPE 9198). It also believes the copyright system indirectly affects music sales on line and telephone ringtones at the expense of the creators. According to the industry, the sums lost have gone from €500 million in 2001 to €1.2 billion in 2005, says the Financial Times.
The battle between the two camps is also technological: representatives of claimants and consumers and the industry have clashed on the effectiveness of new methods of rights protection, digital rights management (DRM). Developed by the industry, this technology allows control of the use and distribution of works protected by copyright, by for example, limiting the number of copies possible and the length of use. They can be built into the physical distribution of CDs, DVDs or the online distribution of music, book or electronic games files.
GESAC says that the management of digital rights through DRM technology is a precious tool in limiting private copying but does not allow remuneration and so cannot replace collective management of rights. It considers that this technology is not foolproof, insofar as it does not prevent “peer-to-peer” sharing of works. The development of technical protection measures, implemented by the industry alone, has already shown how it affects private life and individual freedom, add AEPO ARTIS, FIA and FIM. On the consumer side, BEUC, the European consumers' organisation says that hitherto DRM technology has mainly been used to the detriment of consumers and restricts traditional usage, in particular because there is still no standard to force the industry to give any information on this technology being added to works or to the medium on which they are recorded (http: //http://www.consumersdigitalrights.org/ ).
The industry considers, however, that DRM technology provides viable alternatives to the archaic system of copyrights in an increasingly digital environment. For the consumer, DRM technology ensures a purchase in line with his/her wishes and easy to manage (http: //http://www.europe4drm.com ). As for the Commission, it seems to side more with the industry. “Through digital rights management, there are new technological means through which rights holders can, more directly, protect their interests,” Charlie McCreevy told MEPs on the legal affairs committee. In line with directive 2001/29/EC on the harmonisation of certain aspects of copyright and ancillary rights in the information society, Member States can authorise copies on any medium by a physical person for private and non-commercial use, on condition that copyright holders receive fair compensation. Nineteen have so far put this system in place. Cyprus, Ireland, Luxemburg and the United Kingdom have not done so, while Greece and Malta have the legislation but are not applying it. Under directive 2001/29/EC, Member States have to take account of the use of DRM technology when awarding compensation under the copyright system. It is theoretically illegal to circumvent technological protection measures when they can prevent any private copying.