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A private copying levy (also known as blank media tax or levy) is a government-mandated scheme in which a special tax or levy (additional to any general sales tax) is charged on purchases of recordable media. Such taxes are in place in various countries and the income is typically allocated to the developers of "content". (A distinction is sometimes made between "tax" and "levy" based on the recipient of the accumulated funds; taxes are received by a government, while levies are received by a private body, such as a copyright collective.)
Levy system may operate in principle as a system of collectivisation, partially replacing a property approach of sale of individual units.
Such levies were first introduced in Germany in the 1960s. [1] With the advent of the audio cassette, legislators were persuaded that cassette recorders would decimate sales of records as friend after friend would then make copies of only one purchased album. Levies today are assessed on recordable compact discs, a form of media that did not exist when levies were first conceived. Although the bulk of unrecorded compact discs are actually used in the computing industry, they are still "taxed" to provide a revenue stream to the recording industry.
A common misconception is that levies are compensation for illegal copying such as file sharing. This is incorrect, however, levies are only intended to compensate for private copying that is legally allowed in many jurisdictions. For example, uploading a purchased CD on to another personal device such as a laptop or MP3 player. Generally, legislators allow private copies for two reasons: firstly, because otherwise, the enforcement would be unfeasible for private reasons, and secondly, because the administrative burden would be disproportionate.
In the European Union, the legal basis for levies is the 2001 InfoSoc Directive. It mandates that EU countries must put in place a compensation scheme to compensate rightsholders for harm caused where there is a private copy exemption.
In 2015, the European Parliament approved a non-binding resolution (Reda Report) asking a review of the levy in the European Union, building on previous resolutions and studies. [2] [3] However, there has been no change in the EU legal framework since. Industry players continue to lobby for reform of the system which they argue is outdated and does not reflect the rise in streaming services which has caused a drop in private copying.
A difficulty that immediately arises is the practical impossibility of devising a mechanism for distributing the proceeds to copyright holders that is considered "fair" by all copyright holders and consumers. Implemented systems are typically restricted to music and may distribute the proceeds proportionally to a measurement of sales of CDs in music shops or amount of air-play on radio or the like. This ignores other distribution channels such as the Internet, and it disproportionally benefits popular artists and publishers of the related products. Fairer methods would arguably involve extensive sampling of purchasers to determine actual recording behaviour, or alternatively paying all musicians at a simple flat-rate (the preferred method will depend on one's political views).
While the prime purpose of levy systems is to compensate authors, some part of the collected money is also used for general cultural funding purposes. In Germany this is even required by law. It acknowledges the purpose of cultural diversity - which is not necessarily identical to free market effects. This funding is usually executed by the same entities (collecting societies) that distribute the levy money to individual authors. One may question however whether these entities are properly qualified to make culture policy.
Levy systems assume that all authors want to exploit their work for money. However this is not always true, especially on the internet. Many authors do not write to entertain, but to inform readers, listeners and viewers. Often their purpose is to reach the widest possible audience rather than make the maximum profit from the copyrighted work by itself. The discrepancy between reality and the assumption underlying a levy system is growing as the World Wide Web matures, with pervasive user-supplied content, from Wikipedia to YouTube.[ original research? ]
A further problem is to find a proper tariff base for levies. Conceivably the levy may be a percentage of storage media sales price (e.g. 3% in the US). The implication of such a scheme is however that the author gets ever less as technology proceeds and becomes less expensive. But a price based on units of information (bits, or megabits) is not fair either, as for instance a DVD can be used to store a film, a computer game, a large amount of documents, or measurement data. The cost of producing a certain amount of bits widely varies by type of information. Measurement data is even not copyrighted at all. Yet in today's world of converging technology, storage media can be used for a wide range of purposes.
An implementation question that arises is whether the tax applies to any type of copyrighted work or is restricted to a limited field such as music. If it is restricted then the issue arises of how to collect the tax on media which can also be used for other purposes. The options include:
Contrary Fairness arguments
It is theorized that such levy may be linked to a corresponding relaxation of copyright law, by permitting the recording of copyrighted works on media for which the tax has been paid. However, there is little evidence to support this theory. On the contrary, lobbyists representing publishers and copyright holders have increased pressures to implement more restrictive laws, even on countries that have implemented private copying levy. In 2007, it was reported that International Intellectual Property Alliance put 23 of the world's 30 most populous countries into Priority Watch List, even though the United States, which was not in the list, has laws that are more liberal than the laws from the countries within the list. [4]
Even when restricting levy system to devices that primarily play music, this itself creates loopholes that prevents collecting levies from cellphones, PDAs, and other all-in-one portable electronic devices. As a result, copyright holders will have to rely on even more laws to collect levy, and to increase rates of already levied product to recover perceived losses, which run against the political trends toward eliminating levy systems. [5]
Examples of countries operating such schemes:
Australia had a public levy on cassette tapes. The legislation establishing the levy was passed in 1989, challenged in the High Court of Australia in Australian Tape Manufacturers Association Ltd v Commonwealth . The court found the tax legal even though it went to private sources because it served a public purpose.
Copyright Amendment Act 1989 (Cth) introduced the Levy on blank tapes but was later repealed by Copyright Amendment (Re-Enactment) Act 1993 following the "blank tapes levy case" in the HCA in 1993.
In Belgium a fee is charged on both blank media and recording equipment which is passed on to "Auvibel", which is in charge of distributing the funds. As of 1 February 2010, these fees are applicable for the following: [6]
A blank media levy was introduced in Canada in 1997, by the addition of Part VIII, "Private Copying", to the Canadian Copyright Act. The power to set rates and to set the distribution allocation is vested in the Copyright Board of Canada. The Copyright Board has handed the task of collecting and distributing the funds to the Canadian Private Copying Collective, which is a non-profit private organization.
In Canada:
Canada's current private copying levies are as follows: $0.29 per unit for CD-R, CD-RW, CD-R Audio, CD-RW Audio disks. [10] The Pirate Party of Canada, or the PPCA, has called for the scrapping the levy, as there are plenty of non-piracy related uses for CDs and it is unjust to punish Canadians who don't use them for these purposes. [11]
Finland had a blank media levy 1984-2015. From 2015 on the funds come directly from the state budget. [12]
As of beginning of 2012, the fees were (in Euros): [13]
There was no levy fee on mobile phones, computers, memory cards, game consoles, USB flash drives and 8 cm (3 in) CDs/DVDs. VAT of 9% is added to the levies.
The world's first private copying system was created in Germany in 1965. It was a result of earlier successful litigation by GEMA against an audio equipment manufacturer in GEMA v. Grundig.
Luxembourg is the only EU member state on the continent without a private copying levy, [14] making it a popular "copying levy haven" for blank media buyers from countries such as France and Germany.
In the Netherlands a fee is charged on blank media which is passed on to "Stichting Thuiskopie" (Foundation Homecopy), which is in charge of distributing the funds. Fees for January 1, 2021 until December 31, 2023 are as follows: [15]
Portugal established a levy on CDs and DVDs in 1998.
Article 1245 of Civil Code of Russian Federation "Remuneration for free reproduction of phonograms and audiovisual products for private purposes" ("Вознаграждение за свободное воспроизведение фонограмм и аудиовизуальных произведений в личных целях") mandates a fee, which is to be distributed in the following proportion: 40% to the authors, 30% to the singers, 30% to the manufacturers of the media. In practice, this fee had not been charged until after the Regulation of the Government of Russian Federation 829 from October 14, 2010, which mandated a uniform 1% tax on computers, blank optical disks, memory sticks, TVs, video and audio recorders, radios, mobile phones, etc. The controversial decision of the government to award the collected funds to the Russian Union of Rights-Holders for further distribution was criticized by the public and disputed in a lawsuit.
In Sweden there is a fee called "privatkopieringsersättning" (private copy remuneration) earlier called "kassettersättning" (cassette tape remuneration) on storage media. The levy is handled by Copyswede. The extent of what is included in the copy levy has changed several times the past decade. In September 2019 the copy levy looks as follows https://www.copyswede.se/elektronikbranschen/produkter-och-ersattningsnivaer/:
17 U.S.C. § 1008, as legislated by the Audio Home Recording Act of 1992, says that non-commercial copying by consumers of digital and analog musical recordings is not copyright infringement. Non-commercial includes such things as resale not in the course of business, perhaps of normal use working copies which are no longer wanted. It is unlikely to include resale of copies in bulk; Napster tried to use the Section 1008 defense but was rejected because it was a business.
From House Report No. 102-873(I), September 17, 1992: "In the case of home taping, the [Section 1008] exemption protects all noncommercial copying by consumers of digital and analog musical recordings" .
From House Report No. 102-780(I), August 4, 1992: "In short, the reported legislation [Section 1008] would clearly establish that consumers cannot be sued for making analog or digital audio copies for private noncommercial use".
The United States music industry[ citation needed ] administers the Audio Home Recording Act and foreign hometaping royalties for artists on US sound recordings as well as US record labels. These royalties were previously administered by the Alliance of Artists and Recording Companies (AARC) for Featured Artists and Copyright Owners until it ceased operations in 2021 and is now administered by SoundExchange, [19] ASCAP/BMI/SESAC for writers, Harry Fox Agency for publishers, and The AFM/SAG-AFTRA Intellectual Property Rights Distribution Fund (Joint venture of AFM and SAG-AFTRA ) for non-featured artists. All societies also collect foreign remuneration for their respective funds.
17 U.S.C. § 1008 bars copyright infringement action and 17 U.S.C. § 1003 provides for a royalty of 2% of the initial transfer price for devices and 3% for media. [20] The royalty rate in 17 U.S.C. § 1004 was established by the Fairness in Music Licensing Act of 1998. This only applies to CDs which are labeled and sold for music use; they do not apply to blank computer CDs, even though they can be (and often are) used to record or "burn" music from the computer to CD. The royalty also applies to stand-alone consumer-grade CD recorders, but not to professional CD recorders or CD burners used with computers. Most recently, portable satellite radio recording devices contribute to this royalty fund.
Thanks to a precedent established in a 1998 lawsuit involving the Rio PMP300 player, most MP3 players are deemed "computer peripherals" and are not subject to a royalty of this type in the U.S.
Currently, private copy royalties are generated in the US by the sale of "blank CDs and personal audio devices, media centers, satellite radio devices, and car audio systems that have recording capabilities." [21]
Currently there is no proper private copy exception in the United Kingdom, there is only a narrow exception regarding broadcast time-shifting (s70(1) of the Copyright, Designs and Patents Act 1988 (CDPA)).
On 1 June 2014, the UK implemented art. 5(2)b of the Infosoc Directive via the Copyright and Rights in Performance (Personal Copies for Private Use) Regulations 2014. This provided an exception limited to the personal use, to the owners of a personal copy and with the exclusion of indirectly commercial uses. It did not provide for compensation. The UK Government's view was that "levies or other compensation are neither required nor desirable in the context of a narrow provision that causes minimal harm. Levies are an unnecessary and inefficient tax on consumers. They are unfair to consumers in that they are payable regardless of the use to which a levied device (for example a hard disk) is put and regardless of whether a user has already paid for the copies they store on a device. Furthermore, particularly in the current economic climate, it is not right to extract more money from the pockets of hard pressed consumers." [22] The British Academy of Songwriters, Composers and Authors (BASCA), the Musicians' Union, and UK Music challenged the introduction of these regulations, and brought an application for judicial review. Their application succeeded when, in June 2015, the High Court ruled that the regulations were unlawful because of a flawed impact assessment. [23]
The compact disc (CD) is a digital optical disc data storage format that was co-developed by Philips and Sony to store and play digital audio recordings. It uses the Compact Disc Digital Audio format which typically provides 74 minutes of audio on a disc. In later years, the compact disc was adapted for non-audio computer data storage purposes as CD-ROM and its derivatives. First released in Japan in October 1982, the CD was the second optical disc technology to be invented, after the much larger LaserDisc (LD). By 2007, 200 billion CDs had been sold worldwide.
CD-R is a digital optical disc storage format. A CD-R disc is a compact disc that can only be written once and read arbitrarily many times.
MiniDisc (MD) is an erasable magneto-optical disc-based data storage format offering a capacity of 60, 74, and later, 80 minutes of digitized audio.
Digital Audio Tape is a signal recording and playback medium developed by Sony and introduced in 1987. In appearance it is similar to a Compact Cassette, using 3.81 mm / 0.15" magnetic tape enclosed in a protective shell, but is roughly half the size at 73 mm × 54 mm × 10.5 mm. The recording is digital rather than analog. DAT can record at sampling rates equal to, as well as higher and lower than a CD at 16 bits quantization. If a comparable digital source is copied without returning to the analogue domain, then the DAT will produce an exact clone, unlike other digital media such as Digital Compact Cassette or non-Hi-MD MiniDisc, both of which use a lossy data-reduction system.
The Serial Copy Management System (SCMS) is a copy protection scheme that was created in response to the digital audio tape (DAT) invention, in order to prevent DAT recorders from making second-generation or serial copies. SCMS sets a "copy" bit in all copies, which prevents anyone from making further copies of those first copies. It does not, however, limit the number of first-generation copies made from a master.
Digital Compact Cassette (DCC) is a magnetic tape sound recording format introduced by Philips and Matsushita Electric in late 1992 and marketed as the successor to the standard analog Compact Cassette. It was also a direct competitor to Sony's MiniDisc (MD), but neither format toppled the then-ubiquitous analog cassette despite their technical superiority, and DCC was discontinued in October 1996. Another competing format, the Digital Audio Tape (DAT), had by 1992 also failed to sell in large quantities to consumers, although it was popular as a professional digital audio storage format.
In computing, an optical disc drive (ODD) is a disc drive that uses laser light or electromagnetic waves within or near the visible light spectrum as part of the process of reading or writing data to or from optical discs. Some drives can only read from certain discs, while other drives can both read and record. Those drives are called burners or writers since they physically burn the data onto on the discs. Compact discs, DVDs, and Blu-ray discs are common types of optical media which can be read and recorded by such drives.
A magneto-optical drive is a kind of optical disc drive capable of writing and rewriting data upon a magneto-optical disc. 130 mm (5.25 in) and 90 mm (3.5 in) discs are the most common sizes.
A flash drive is a data storage device that includes flash memory with an integrated USB interface. A typical USB drive is removable, rewritable, and smaller than an optical disc, and usually weighs less than 30 g (1 oz). Since first offered for sale in late 2000, the storage capacities of USB drives range from 8 megabytes to 256 gigabytes (GB), 512 GB and 1 terabyte (TB). As of 2024, 4 TB flash drives were the largest currently in production. Some allow up to 100,000 write/erase cycles, depending on the exact type of memory chip used, and are thought to physically last between 10 and 100 years under normal circumstances.
DVD-RAM is a DVD-based disc specification presented in 1996 by the DVD Forum, which specifies rewritable DVD-RAM media and the appropriate DVD writers. DVD-RAM media have been used in computers as well as camcorders and personal video recorders since 1998.
Ripping is the extraction of digital content from a container, such as a CD, onto a new digital location. Originally, the term meant to rip music from Commodore 64 games. Later, the term was applied to ripping WAV or MP3 files from digital audio CDs, and after that to the extraction of contents from any storage media, including DVD and Blu-ray discs, as well as the extraction of video game sprites.
Maxell, Ltd., commonly known as Maxell, is a Japanese company that manufactures consumer electronics.
A DVD recorder is an optical disc recorder that uses optical disc recording technologies to digitally record analog or digital signals onto blank writable DVD media. Such devices are available as either installable drives for computers or as standalone components for use in television studios or home theater systems.
Optical storage refers to a class of data storage systems that use light to read or write data to an underlying optical media. Although a number of optical formats have been used over time, the most common examples are optical disks like the compact disc (CD) and DVD. Reading and writing methods have also varied over time, but most modern systems as of 2023 use lasers as the light source and use it both for reading and writing to the discs. Britannica notes that it "uses low-power laser beams to record and retrieve digital (binary) data."
DVD recordable and DVD rewritable are a collection of optical disc formats that can be written to by a DVD recorder and by computers using a DVD writer. The "recordable" discs are write-once read-many (WORM) media, where as "rewritable" discs are able to be erased and rewritten. Data is written ("burned") to the disc by a laser, rather than the data being "pressed" onto the disc during manufacture, like a DVD-ROM. Pressing is used in mass production, primarily for the distribution of home video.
Optical disc authoring requires a number of different optical disc recorder technologies working in tandem, from the optical disc media to the firmware to the control electronics of the optical disc drive.
File sharing in Canada relates to the distribution of digital media in that country. Canada had the greatest number of file sharers by percentage of population in the world according to a 2004 report by the OECD. In 2009 however it was found that Canada had only the tenth greatest number of copyright infringements in the world according to a report by BayTSP, a U.S. anti-piracy company.
Blu-ray Disc Recordable (BD-R) and Blu-ray Disc Recordable Erasable (BD-RE) refer to two direct to disc optical disc recording technologies that can be recorded on to a Blu-ray-based optical disc with an optical disc recorder. BD-R discs can only be written to once, whereas BD-RE discs can be erased and re-recorded multiple times, similar to CD-R and CD-RW for a compact disc (CD). Disc capacities are 25 GB for single-layer discs, 50 GB for double-layer discs, 100 GB ("XL") for triple-layer, and 128 GB for quadruple-layer.
The DVD is a digital optical disc data storage format. It was invented and developed in 1995 and first released on November 1, 1996, in Japan. The medium can store any kind of digital data and has been widely used to store video programs, software and other computer files. DVDs offer significantly higher storage capacity than compact discs (CD) while having the same dimensions. A standard single-layer DVD can store up to 4.7 GB of data, a dual-layer DVD up to 8.5 GB. Variants can store up to a maximum of 17.08 GB.
A CD-ROM is a type of read-only memory consisting of a pre-pressed optical compact disc that contains data computers can read, but not write or erase. Some CDs, called enhanced CDs, hold both computer data and audio with the latter capable of being played on a CD player, while data is only usable on a computer.
CPCC shall distribute the amounts it collects, less its operating costs, as follows: (a) 58.2 per cent, to be shared between the Society of Composers, Authors and Music Publishers of Canada (SOCAN), the Canadian Musical Reproduction Rights Agency (CMRRA) and the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC), on account of eligible authors; (b) 23.8 per cent to Re:Sound Music Licensing Company on account of eligible performers; and (c) 18.0 per cent to Re:Sound Music Licensing Company on account of eligible makers.
the levy rate shall be 29¢ for each CD-R, CD-RW, CD-R Audio or CD-RW Audio.
We will seek to abolish the copyright levy.