There is something inherently sinister about the practice of copyright levies in Europe. It’s a practice that has gone on for centuries and Europe, and European Commission attempts to curb it or eliminate it were thought to be unwise.
The system has never been available to scrutiny, with the charges for collecting the levies making century old institutions fatter, and the distribution process being opaque, with the money going to those companies big enough and local enough to stake a claim, while smaller companies, and overseas interests and individuals are ignored. They appear to be run very much like a mafia, but that’s just our opinion.
The concept of a levy is straightforward. If you have any recording media (except a blank sheet of paper) so that includes flash memory, tape cassettes, disk drives and any device that contains them, they are taxed, depending upon which country and which levy organizations are dominant, and the tax being based on the device price or the storage capacity. And since all the money distributed tends to go local companies, and since it is charged to companies manufacturing mostly outside the EU, it looks and feels like an import duty on electronic goods.
Not that this is strange, some countries, such as Brazil have 80% Consumer Electronics import duties, but the money goes to the government, not to unaccountable copyright societies.
Now the European Union is looking to at least unify the process across 27 European countries. Hardware manufacturers are giving their input to politicians and the reverent levy agencies are doing the same.
At present levies vary wildly across member states with some levies charged on MP3 players being more than the price of the player itself. In Spain and Germany it is known that there are particularly heavy charges, and often this is due to a levy being charged for every minute of content a particular device can hold. As digital technologies have increased storage sizes, the levies have gone sky high.
The overall result is that some countries have a thriving consumer electronics retail industry because people from neighboring countries find they can drive across the boarder and buy a device for sometimes as low as half the price of their own country.
Which is why in June 2006 the European Commission put down proposed rules and began asking member states what they thought about them. Companies which sell players with storage devices, say that by incorporating Digital Rights Management, they are ensuring that all the copies of content on their devices are paid for in full, so that no device levy should be charged.
But this flies in the face of the fact that iPods have about 80% of their content ripped from unprotected CDs despite having an effective DRM (although in the pre-Digital Millenium Copyright Act world that is considered fair use in many countries and not illegal). Secondly levies were never supposed to be compensation for piracy, but they were in fact compensation for fair use copying from device to device around the home, piracy is another effect entirely, altogether new, so DRM should not offset the levies.
At present only the UK, Ireland, and Luxembourg do not impose levies, but then again their laws do not allow personal use copying even with unprotected content.
The pressure for reform originally came from the powerful device community in Europe with Apple, Nokia and Motorola especially sensitive. What will levies do to the iPhone now that it has 8 GB of flash memory onboard, especially in countries that charge per megabyte.
In the Netherlands during 2005, emulating German law, legislation was proposed which would add levies of €3.28 ($5.1) per gigabyte of disk storage which would have had the effect of almost doubling the price of a top end iPod.
In Germany there has always been a levy on PC hard drives, which relates to storage capacity. If this was left in place it would soon outweigh not just the cost of the drive, but the cost of the device. Germany also charges a TV license to any mobile phone that can take mobile TV, despite the fact that the public broadcasting channels have not yet been put on a mobile TV.
Now the European Commission seems to have gained agreement from the major device manufacturers that as long as the rate is reasonable and common across the entire market, they could live with a universal levy. This will mean that the UK and other non-levying countries will have to begin arrangements for suddenly collecting and distributing levies.