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Private Copying Levy: Hardware Makers Ready For Europe-Wide ‘iPod Tax’?

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Hardware makers meet politicians and copyright societies in Brussels today to discuss introducing a Europe-wide levy on media devices, offsetting revenue apparently lost from personal copying. Since 2001, 22 of Europe’s 27 countries have made technology manufacturers pay the surcharge on products that allow music, books, movies and other copyrighted content to be copied. Despite the companies having fought the obligation for years, the levy reaped €568 million for rightsholders in 2004.

SEE ALSO: Music Biz Would Rather Tax iPods Than Legitimise Format Shifting

Now the European Commission’s internal market and services directorate is hosting a public hearing on the topic. FT.com says Nokia (NYSE: NOK) CEO Olli-Pekka Kallasvuo and Motorola (NYSE: MOT) CEO Greg Brown are amongst gadget makers to have signed a letter to the EC saying they are willing to “explore new ways forward” (since mobile phones nowadays are music players, too). The paper also lumps Apple (NSDQ: AAPL) and Sony (NYSE: SNE) in that mix, adding the companies “appear more open to a compromise”: “They are thought to be willing to accept surcharges if they are harmonised in Europe.”

Whether such harmonisation would include countries exempt from the levy law - Ireland, UK, Malta, Cyprus and Luxembourg - is not clear. In the UK, the Music Business Group (MBG) - representing pretty much the entire music industry - last month called on the UK government to let it introduce the so-called “iPod tax”, rather than follow an earlier recommendation to legalise format-shifting. One fact that may oblige hardware makers to accept the fees: the gradual vanishing of DRM copy protection.

In some countries, the EC levy is even applied to CD writers and blank discs, and manufacturers are forced to add up to €15 to the price of an iPod; France uses the levy to greatest financial effect. Today’s hearing will hear from representatives of Nokia and HP, disc drive maker Imation, website Younison, parliamentarians and national culture ministers.

 

May 27, 2008 4:48 AM ET

Posted In: Legal, Regulatory, EC

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