Dutch private copying levy may apply to tablets and smartphones by 2013
In the Netherlands, the debate on the so-called private copying levy has been fired up again this week by 'Stichting Thuiskopie'. Stichting Thuiskopie is the organisation that collects and redistributes funds generated by this controversial levy on empty media carriers, intended to compensate the creative industry for the fact that these devices are being used to make private copies of copyright protected works. Stichting Thuiskopie wants to increase the fees and, in addition, they have proposed to expand the range of devices that are subject to this levy to include almost any item capable of carrying media.
The private copying levy has its origin in the European Copyright Directive (Directive 2001/29/EC). Article 5, section 2(b) of this directive states that authors have to be protected against unauthorized use of their works. With regard to copies for private use, member states have two choices: either private copying is only allowed with the permission of the right holder, or member states can exempt private copying and provide the right holder with a fair compensation. Meanwhile, all use of copyrighted work other than for private purposes has to be compensated of course. This means a user ends up paying extra for an empty CD, and will still need to pay when buying an ebook or downloading music online.
In the Netherlands, the compensation for right holders is collected by a levy on empty media carriers, like CD-ROMs or DVDs. Since 2007, the private copying levy system was frozen, so no new carriers could be added to it. The freezing was meant to facilitate the debate about the future of the private copying levy. Surely, this debate is fierce. Critics say the levy creates a huge amount of red tape, only a limited portion of the money is actually collected by artists and it generates unreasonable costs for the consumer.
This led to a lawsuit between artists, creative industry stakeholders and the government. The artists and stakeholders stated that it was unfair that the private copying levy was not charged for devices like mp3 players and hard disk recorders, because they would miss income from their copyrights. The Court of Appeal agreed with them and ruled that the freezing of the private copying levy system is unlawful towards the stakeholders. Devices which are, to a significant extent, used to exchange copyright protected materials should be added to the list. The government appealed to the Supreme Court. The court procedure is currently pending. It is not likely that the ruling will be before 1 January 2013.
Meanwhile, the Dutch government has to comply with the law, so the Secretary of Security and Justice Fred Teeven intends to revitalize the private copying levy from 1 January 2013. It is likely he must now charge a levy over additional devices, that fell outside the scope of the private copying levy until now. Mp3 players and hard disk recorders were already mentioned by Mr. Teeven. Otherwise, a loophole would exist in the system when files are copied onto modern devices like iPads.
Currently, the Ministry and other stakeholders are engaged in talks with Stichting Thuiskopie over this issue. Stichting Thuiskopie has now announced they intend to charge the levy on all PCs, smartphones, tablets and memory cards, as these device are in use to transfer copyrighted material. Thuiskopie expects this policy will generate some €60 million for the creative sector.
ICT-Office, a trade organisation for the internet and ICT sector, called the proposal by Stichting Thuiskopie absurd: "The end user will pay more for their device -and that also means additional VAT- while we cannot check what the actual damage of the entertainment sector is and we don't know where this money will go, that is unfair and the social costs of this system are disproportionate."
The fee is by no means a license to copy: Users that have paid the PCL are still required to pay for subsequent downloads. The risk of double charging consumers is realistic. Furthermore, a compelling question is what to tell people that buy a smartphone with the intent to only use it for phone calls, emails and sharing their own files with others. Why must they compensate anyone? To be continued...
Sources: Webwereld, Nu.nl, Ministry of Security and Justice
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