Copyright levies

Copyright levies are surcharges placed on various technologies, consumer electronics and media storage devices such as MP3 players and printers to compensate writers, artists, and musicians for any copyright infringement of their material.

Although copyright infringement remains illegal, the copyright levies are intended to cover copies in the private sphere, which many countries allow. According to EU law, a private copy is a copy of legally acquired content on any medium by a natural person for private use and for ends that are neither directly nor indirectly commercial. The EU Copyright Directive of 2001 allows countries to introduce levies on products to compensate artists for private copies made of their work.

The fees are collected by national collecting societies, which then pass the money back to copyright holders. Naturally, the consumer electronics industry hates these levies, arguing that they are inconsistent, confusing and above all very expensive. Moreover, fees vary greatly from country to country. For an MP3 player, for example, the levy is €25 in France, but just €3.15 in Spain.

In fact, the current copyright levy regime is a mix of tariffs randomly applied to different goods, at different levels, in different ways in the EU member states. Private copying levies are collected in almost all member states, with the exception of the UK, Cyprus, Ireland, Luxembourg and Malta.

A long-standing battle in the EU, the copyright levies regime has represented a tough point of contention among the EU member states. Back in 2006, there was a proposal to remove these levies but it was shot down due to intense pressure from collecting societies. Current EU copyright rules do not provide guidelines on which products are subject to levies and how much is charged. Instead, EU rules allow member states to have exceptions or limitations to the reproduction right for certain types of audio, visual and audio-visual material for private use, accompanied by fair compensation.

Recent negotiations between on the one hand collecting societies, which represent authors, performers, and other rights-holders, and consumer electronics companies on the other, have failed. The EU is now expected to find the solution by putting in place through legislative intervention some form of harmonised system for private copying compensation that is fair and proportionate, thus enabling consumer electronics companies to sell products at reasonable prices.

The main issues that the EU legislative initiative will have to deal with are the level at which the private copying remuneration will be set and whether such remuneration should be determined at a fixed tariff, and a proper mechanism for the collection of levies and their distribution.

Most importantly the legislative measures should provide a workable solution that assures the rights holders their due compensation and at the same time applying the levies in a way that is commensurate with the loss caused by private copying.

Dr Grech is an associate with Guido de Marco & Associates and heads its European law division.