Copyfails bonus track: Copyright levies

By EDRi · July 29, 2016

The EU is reforming its copyright rules. We want to introduce you to the main failures of the current copyright system, with suggestions on how to fix them. You can find all the Copyfails here.

This article is an additional one – a “bonus track” – to the series presenting Copyfails.

How has it failed?

The “private copying levy” is a surcharge on the price of media capable of making copies. For example, when buying a blank DVD, the price includes a private copying levy (in most EU Member States).

Rights holders, for example record companies or publishers, claim that people making copies of, for example, CDs or DVDs for private use causes them a financial loss. Even if, in some EU Member States, citizens have the freedom to make private copies, levies were created to compensate for these alleged losses. The harm to rights holders has not been clearly proven – no independent credible study on this has been published. Maybe sometimes there really is a cost, but maybe there is a benefit: who would buy a music CD these days if they couldn’t copy it onto an MP3 player or a smarthphone?

Copyright rules, including private copying levies, are implemented quite differently across the EU. This leads to a risk that you end up paying several times for the same thing. You will pay a levy when buying a blank CD to which you copy the music as a backup, a levy on the external hard drive of the computer that you use to make the copy, and as a levy on the device (a tablet or mP3 for example) that you use to listen to the music.

The fact that the rules are not the same everywhere in Europe, gives unfair advantages to some, and hampers fair competition. In the digital “single market”, 22 of the 28 EU Member States impose a levy. Six do not.

The internet has brought with it the possibility to exchange all sorts of files not only copyrighted ones. New compensation models and new business models need to be encouraged, rather than imposing a random payment which does not fit the purpose for which it was invented.

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Why is this important?

It has been argued that the levy will support creation. However, under the current situation, it seems to be rather an obstacle. The private copying levies distort the market; it compensates economic loss that has not been clearly demonstrated and appears to have a negative impact on new business models.

Furthermore, consumers might buy products with copyright levies, and even if they never use them for private copies of copyrighted works, they still have to pay.

The cost of levies varies wildly around Europe, which makes the same product more costly for consumers in one country, and cheaper in another. For example, in 2010, there was a levy of 36 euro on a mobile phone with 32MB of memory in Germany. The levy on the same phone was forty times more expensive than the one in Italy, and there was no levy at all in Ireland.

Finally, a study published by Digital Europe shows that it costs 51,2 cents to collect each Euro for EU copyright levies. This is absurd. We need to find new ways to remunerate authors!

Unfortunately this chaos is likely to continue. A meaningful reform is not planned in the upcoming legislation on the creation of a “digital single market”.

How to fix it?

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