Difference between revisions of "Levies Questionnaire"
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Revision as of 22:23, 5 April 2008
The European Commission has started a consultation with questionnaire on levies for private copying. We decided to give them a joint response. This page is there to draft our response which should be done until April 4th. 2008. Please discuss things on the discussion page.
The EC consultation page with background documents and questionnaire can be found here
- 1 Draft
- 1.1 Cover letter
- 1.2 General
- 1.2.1 An basic question about levies
- 1.2.2 The premise of copyright levies
- 1.2.3 The inner market
- 1.2.4 Professional users
- 1.2.5 The grey market
- 1.2.6 Paying the levies multiple times
- 1.2.7 Collection issues
- 1.2.8 Distribution issues
- 1.2.9 Media convergence
- 1.2.10 Transaction costs
- 1.3 Questionnaire
- 1.3.1 A. Main characteristics of the private copying levy systems
- 126.96.36.199 1) Does Table 1 on equipment and blank media levies reflect the situation correctly? Is the information contained in Table 1 still correct?
- 188.8.131.52 2) How could the legal uncertainties as to which equipment is levied in different jurisdictions be dealt with?
- 184.108.40.206 3) What would be the fairest method to determine the private copying levy rate that applies to digital equipment and blank media?
- 220.127.116.11 4) Have new levies on either equipment or media have been introduced or abolished since 2006?
- 1.3.2 B. Economic, social and cultural dimension of private copying levies
- 18.104.22.168 5) Can you provide updated figures for 2007 on the amount of levies collected in those jurisdictions that apply a levy scheme?
- 22.214.171.124 6) Are you aware of further economic studies on the topics discussed in the Document?
- 126.96.36.199 7) Table 5 reflects the percentage of private copying levies and the resulting amounts that are allocated to cultural and social funds. Does this table summarise the situation correctly? Could you provide updated figures for 2007?
- 188.8.131.52 8) What kind of events are funded by the sums set aside for cultural funds in the different jurisdictions? Who are the main beneficiaries of these monies?
- 184.108.40.206 9) What percentages of cultural funds are spent on cultural events and what percentages on pensions or social payments?
- 220.127.116.11 10) Should there be a Community-wide (binding or indicative) threshold for cultural fund deductions?
- 18.104.22.168 11) What share of individual rightholders' revenues do private copying levies represent?
- 1.3.3 C. Cross-border trade and e-commerce issues
- 22.214.171.124 12) Is there a refund system available in your jurisdictions when particular equipment or media is exported to another Member State? If so, are there limitations as to the category of traders or individuals who are entitled to such a refund upon exportation?
- 126.96.36.199 13) What is the most suitable system of refunds upon exportation? Who is the most suitable party to claim those refunds?
- 188.8.131.52 14) Does Table 6 on national refund and exemption systems reflect the situation correctly? Please complete and update the table.
- 184.108.40.206 15) Who is the most suitable party to pay private copying levies? Should private endconsumers be exempt to self-report intra-community purchases of blank media and equipment?
- 1.3.4 D. Professional users of ICT equipment
- 1.3.5 E. Grey market
- 1.3.6 F. Consumer issues
- 220.127.116.11 20) Are you aware of consumer surveys on private copying behaviour which are used as a basis for setting the levy rates? And consumer surveys on the main sources of works or sound recordings that are privately copied?
- 18.104.22.168 21) How should private copying levy schemes evolve to take into account convergence in consumer electronics?
- 1.3.7 G. Double payment
- 1.3.8 H. Alternative licensing
- 1.3.9 I. Distribution issues
- 1.3.1 A. Main characteristics of the private copying levy systems
- 1.4 Links
This is still a draft. If you don't agree to some of the responses or know better formulations, just edit it!
The pirate party is an international movement initially founded in Sweden to work on a copyright reform and to stop the criminalization of file sharers. Until now pirate parties have been founded in many countries and the focus has expanded from copyright to patent and civil liberties issues. The pirate parties are composed of many different individuals among them musicians, songwriters, writers, graphical artists, software developers and many copyright-related professional groups which are or could be legitimate stakeholders for levies. Because of its background and history, the pirate movement has of course developed a special point of view to copyright issues and levies.
FIXME: General discussion about the levy system. Needed as we cannot support the premises of the questionairy.
An basic question about levies
Why is who going to be compensated for what, and how?
This seemingly superfluous questions has many unanswered elements. In the opinions of Pirate Parties International, not all of them have satisfactory answers. To make our views clear, we present a rather thorough discussion before even beginning with answering of the questions, because the premises of this questionnaire all rely on this one, simply question having an answer supportive of levies.
Unless the above questioned can be answered in a way that is reasonable, a copyright levy system will only serve to take money from someone to give it to others without a clear rationale. Although a copyright levy system is not formally a tax because the money does not go to the state, it works just like a tax for those paying it, and should therefore be subject to the same scrutiny as taxes.
The above question can be divided into several questions:
This is the most basic question. without it there is no room for levies.
The background paper supplied for the questionnaire states that: "a 'private copying levy' is a form of compensation for rightholders based on the premise that an act of private copying cannot be licensed for practical purposes and thus causes economic harm to the relevant rightholders". We suggest that the premise of economic harm to relevant rightholders is incorrect. Presently, there are a number of ways in which private copying may occur:
- timeshifting a TV broadcasted film/series;
- copying the music from a CD bought in a shop to another CD, or to a MP3 player, or to any other device/media;
- sharing copyrighted works through peer-to-peer technology for non-lucrative uses (peer-to-peer is meant here to indicate the act of transferring a certain file from one computer to another, in most cases where both computers are owned by private individuals).
In all of these cases, we can safely say that nothing is lost to the copyright holder. There is no loss of money as the time, effort and supposed medium of copying is all provided for by the private individual. There is also no loss of material media - i.e. CDs, DVDs, vinyls, books or other material media of copyrighted material. Therefore, we can legitimately ask where the supposed economic harm lies?
The assumption of economic harm rests in this case, falsely, on the claim that cultural works can be compared to material property. It can't. Even as this questionnaire shows, the cultural works themselves cannot be levied. They are intangible, and with new technology they are able to be multiplied a indefinitely with no cost. Distribution costs would not, for anyone, have to be considered an economic harm ever again. This abundance of information causes an antithesis to the scarcity principle.
Pirate Parties International are of the strong belief that it would be unwise for the future of the Union to rest its future legislation on the assumption that an infinite supply should be treated as a finite one. In particular, the Union should be loath to resting its legislation on such unwise assumptions when it risks striking against consumers by doing so.
It lies -falsely- on the assumption that cultural works are assimilable to private property, when it cannot be because of a main issue that is pointed out by even the highest private property supporters -let this be highlighted, as filesharing supporters & private copying levies oppositors are we falsely and unfairly accused of being private property oppositors; nothing more far from reality-: scarcity principle. From Stephan Kinsella's words:
- "What is it about tangible goods that makes them subjects for property rights? Why are tangible goods property? A little reflection will show that it is these goods’ scarcity -the fact that there can be conflict over these goods by multiple human actors-. The very possibility of conflict over a resource renders it scarce, giving rise to the need for ethical rules to govern its use. Thus, the fundamental social and ethical function of property rights is to prevent interpersonal conflict over scarce resources"
- "Property rights must be demonstrably just, as well as visible, because they cannot serve their function of preventing conflict unless they are acceptable as fair by those affected by the rules. If property rights are allocated unfairly, or simply grabbed by force, this is like having no property rights at all; it is merely might versus right again, i.e., the pre-property rights situation."
- "your taking my lawnmower would not really deprive me of it if I could conjure up another in the blink of an eye. Lawnmower-taking in these circumstances would not be “theft.” Property rights are not applicable to things of infinite abundance, because there cannot be conflict over such things [...] like the magically-reproducible lawnmower, ideas are not scarce [...] if you copy a book I have written, I still have the original (tangible) book, and I also still “have” the pattern of words that constitute the book. Thus, authored works are not scarce in the same sense that a piece of land or a car are scarce. If you take my car, I no longer have it. But if you “take” a book-pattern and use it to make your own physical book, I still have my own copy. The same holds true for inventions and, indeed, for any “pattern” or information one generates or has. As Thomas Jefferson -himself an inventor, as well as the first Patent Examiner in the U.S.- wrote, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me"
We are also falsely accused of being against author's interests; we actually support author's rights -moral and material rights, as they are part of the human rights (article 27.2)-, what we fully reject is the intellectual property concept -because of the mentioned above-.
We are not the only ones: in the infamous Sony vs Universal case -also nicknamed Betamax case; it's not time to talk about the unbearable duality of being suffered by Sony, now Sony-BMG, a company which at the same time both offences users (Sony-BMG Spain Chairman, in Spanish) who make private copies of their copyrighted works and supply the required equipment to perform such copies-, US Supreme Court stated that -exact quotation-:
- "The record and the District Court’s findings show [...]
- that there is no likelihood that time-shifting would cause nonminimal harm to the potential market for, or the value of, respondents’ copyrighted works [...] private, noncommercial time-shifting in the home satisfies this standard of noninfringing uses both because respondents have no right to prevent other copyright holders from authorizing such time-shifting for their programs, and because the District Court’s findings reveal that even the unauthorized home time-shifting of respondents’ programs is legitimate fair use"
Why -again-, then, should exist a levy to compensate a nonexistent harm?
Finally, because of the probatio diabolica principle, we aren't the ones who have to prove the nonexistence of such harm, but the beneficiaries of private copying levies are who have to prove the existence of such harm. Whilst the only reason for private copying levies to exist remains being because rightholders want to, as Kinsella says, we will stay trapped in the might versus right -a scenario quite far from what comes to be fair-.
What is the compensation for?
- Unless the compensation is for some kind of real financial loss, a financial compensation is unjust. As shown in the next section, we believe that the premise that private copying is causing copyright holders economic harm is untrue.
Let us use reductio ad absurdum -as long as the why question about the very existence of private copying levies remain without answer-: what would happen if levies continue existing?
In civil law, compensation arises when concrete -supposedly harmful- actions happen, and regarding private copying levies, those actions are obviously private copying -name becomes the clue-; because of that, no compensation should arise from any other actions. If no single private copying levies system observes this simple rule, then there wouldn't be room for any single private copying levies system.
Who should be compensated?
The obvious answer would be "copyright holders". However, Pirate Parties International claim that this does not fully answer the question.
For one, the purpose of a copyright levy should be to nurture the purpose of copyrights, which is to stimulate new creativity and more culture. The copyright industry as it currently functions does not work like that. The current copyright system employed in the EU, by its Member States and in the WTO all show the tendence of copyrights being stockpiled goods rather than a means for creators to gain compensation or attribution for their works. In essence, a copyright levy defined under such a system would only serve to promote the standing of already well-compensated copyright trolls. Therefore, a copyright levy could, by critical analysis, be seen as a way of undermining the spirit of copyright by centralizing financial assets around such businesses as stockpile copyrights.
Second, a copyright levy suffers from the inability to decide how such a levy would be distributed. Even if there would have been a real financial - or even moral - loss to be compensated, it would inevitably be impossible to find a true basis for the distribution of the income from such a levy so that it benefits all the creators who are being copied, with or without their own acknowledgement. In particular, the Internet is an arena where much copyrighted material is distributed, where you run a severe risk of colliding with fundamental human rights like privacy and the sanctity of private communication should you wish to get complete records for a basis of distribution. Therefore, a copyright levy could further be seen as a way of centralizing financial assets either around such businesses are unscrupulous enough to obtain such records, or such businesses as already control the non-Internet arenas.
In the views of our coalition. Neither of these possibilities are enticing or even serving of the purpose of copyright, and therefore the levy system should be promptly turned down.
Let us keep using reductio ad absurdum.
In civil law, arisen compensations have specific beneficiaries, and regarding private copying levies, those beneficiaries are the rightholders of the copied works; because of that, no compensation should be received by rightholders of non copied works, and the amount of the compensation should be kept proportional to the supposedly caused harm -it doesn't matter if (for instance) Alejandro Sanz sold 10 million copies of his last album for only 10.000 copies of the relatively unknown group X's last album; if the same amount of private copies were made from both albums, rightholders of both albums should receive the same amount of compensation-. If no single private copying levies system observes this simple rule, then there wouldn't be room for any single private copying levies system.
How should the compensation work?
- This question includes the questions of which media and equipment a levy should be placed on, how much the levy should be for different types of media and equipment, who should administrate the levy system and who should audit the levy system to ensure it stays fair and that levies are distributed according to the rules set up for the levy system.
Let us finish using reductio ad absurdum.
We've found out that in civil law, no compensation should arise from any other actions than the supposedly harmful ones -i.e., private copying-, and that no compensation should be received by rightholders of non copied works, as well as the amount of the compensation should be kept proportional to the supposedly caused harm. If no single private copying levies system observes this two simple rules, then there wouldn't be room for any single private copying levies system.
However, there is an extra rule to be observed: rule of the law. It means that all laws have to be observed, thus -and quoting the article 30 of the Universal Declaration of Human Rights-, "nothing in this Declaration may be interpreted as implying for any State, group or person any right to engage in any activity or to perform any act aimed at the destruction of any of the rights and freedoms set forth herein". Which are such rights and freedoms?
- Article 1, UDHR: "All human beings are born free and equal in dignity and rights"; no single rightholder should receive less compensation than others if suffering the same harm; no single citizen should surrender any kind of compensation if not causing any harm.
- Article 7, UDHR: "All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination"; same from article 1 applies here.
- Article 12, UDHR: "No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence"; any private copying levies system that, pursuing to observe the two previous articles, fails to observe this one, becomes invalid.
Thus, if our claims for reasons -that may show why private copying levies should supposedly exist- come to be ignored; if private copying levies come to be imposed following the might versus right path; if it happens, then everyone who would be willing to do it should stop and check if any proposed private copying levies model meets the forementioned criteria. if no model meets the criteria, then not only private copying levies would result unfair, but also the mere act of defending their existence would become absurd.
The premise of copyright levies
A 'private copying levy' is a form of compensation for rightholders based on the premise that an act of private copying cannot be licensed for practical purposes and thus causes economic harm to the relevant rightholders.
All copyright levy schemes are based on the above premise. But is this premise really true? If the premise is not true, copyright levies is nothing but money-grapping by copyright holders who are too good at lobbying.
Unfortunately there is no credible scientific research that shows the premise to be true. On the contrary, we know of a lot of credible scientific research on both legal and illegal private copying that indicates that the premise of economic harm to the copyright holders could be wrong. Take for example the study about file sharing by Harvard Business School professor Felix Oberholzer-Gee which shows that file sharing as a popular form of private copying doesn't hurt legitimate CD sales in any way. [FIXME: Examples]
The inner market
As the background document states, a total of over 6 percent of all intra-EU imports and exports are subject to copyright levy systems. As the intra-EU imports of these goods are subject to national import restrictions (payment of levy fees), the inner market does not work for these goods. This is simply unacceptable.
The Commission should work to ensure that private citizens of the EC can freely buy these goods in any other member country. And the commission should work to ensure that professional wholesale traders can import there goods from other member countries where a levy has already been paid without paying a levy again in the member country they import the goods to. This would make the free market forces work for harmonization of the size of the levies across member countries.
The background document notes a problem with regard to professional users of goods subject to copyright levies, and we agree that there is also a problem here. The problem is that if people who create culture are subject to the levies, the free market is disturbed because these cultural creators are paying a levy to their competition. This problem does not only exist for professional creators, but also for non-professional cultural creators.
For example, think of a group of young independent (without a recording contract) musicians who record a music album. With the low cost of recording this is possible today even if the young musicians do not have a lot of money. But if the equipment (for example computers) they use to create their album is subject to copyright levies, they pay the levies to the existing music industry (their direct competition) but gets no part of the levies. This disturbs and biases the free market. If the young musicians think that selling copies of digital content is not the way to make money in the information age (as many young creators of cultural works think today), they might want to spread their album for free as widely as possible so they get popular and can make money from doing concerts. But if they copy their album to a large number of CD-recordables to send to radio stations to get publicity, they again pay levies that goes to their direct competition (the existing music industry). Thus the system of levies work to protect the existing music industry against competition from new and creative musicians.
Some may argue that allocating part of the levies for collective purposes could help this problem, as the young musicians in the example could ask for part of the collective funds.
We do not think so, for several reasons: The distribution of collective funds is rarely widely announced in member countries that allocate part of the levies for collective purposes, so the young musicians in our example would not know of this possibility. And even if they knew, the procedure for asking for part of the collective funds is not often announced, so they would not know how. If they knew how to ask for part of the collective funds, the decision on who should have parts of the collective funds is often done in a secretive committee controlled by older established copyright holders. Is it likely that copyright holders who make their earning from selling copies of music would give money to somebody who wants to compete with them by giving every customer who wants it free copies of their music? We do not think so.
Currently it looks like almost all of the collective funds are given to other people in the established copyright system (ie. to friends and associates of the people who decide on the distribution of the collective funds).
So there is not just a problem for professional users. The problem exists for everybody who create cultural works. Because the levies increase their cost of creating and distributing new cultural works, the copyright levy system works to limit cultural development. To ensure that cultural development in Europe is not limited by the copyright levy system, the Commission should work to ensure that levies do not apply for goods purchased with the intent of creating or distributing cultural works.
The grey market
[FIXME: Discuss problems with grey market.]
Paying the levies multiple times
[FIXME: Discuss problems when a levy is paid several times (ie. on computer, CD-recorder, and CD media, or when importing from other EU-countries where a levy has already been paid.]
[FIXME: Discuss issues on which goods to put a levy on, and how much the levy should be.]
Fair distribution of the funds collected by the levies is a prerequisite for a copyright levy system. If the funds are not fairly distributed, the levy system will just be money grapping by those who are best at getting part of the funds.
An example: In Denmark a levy has to be paid for digital cameras with a removable memory module. The rationale for this is that the memory module can be removed and used in a mp3 player. Although it is obvious that such a memory module is meant to be used for storing photographs, no photographers get any of these funds. Instead most of the funds goes to the music industry.
This is an example of the music industry being better of getting a part of the funds than the photographers. In fact the photographers are not even represented in the organization that distributes the levies in Denmark. And their only way of getting representation is if they can pressure the danish government to put enough pressure on the organization (Copydan Båndkopi) to make them accept a new member. Most likely the danish photographers do not think it is fair for them to get funds from a levy on a camera, as this obviously is not for their pictures, but for pictures the purchasers of the cameras make. We thing that levies should be avoided on all equipment used to create new cultural works, as such levies would only work to restrict cultural development in Europe.
In Denmark and Spain (and possibly other member countries) the regulations for the levies say that the state can audit the collection and distribution of funds from the levies. But in neither Denmark nor Spain this has ever happened. We fear that the governments refuse to audit because they know that their local copyright levy systems are so unfair that any audit would expose serious irregularities and make the people responsible for the distribution of the levies (who are usually very influential in the media) enemies of the government that audits.
A fair distribution of the funds from the levies is only possible if it accurately reflects how the goods the levy is put on is used for private copying of various copyrighted works. But this can only be accurately known if independent research is done. We know of no such credible independent research.
[FIXME: Discuss the problem that digital media can be used for all works in digital form.]
[FIXME: Discuss the financial cost of maintaining the levies. In Denmark it is generally 8-15 percent of the levies for each copyright holder organization the money is passing through. Also note that the levy creates a new kind of organization that only exists to collect and distribute the levy, and that part of their "cost" of distributing the levy is for political lobbying for even more unbalanced copyright.]
A. Main characteristics of the private copying levy systems
1) Does Table 1 on equipment and blank media levies reflect the situation correctly? Is the information contained in Table 1 still correct?
For Germany, Spain and add your country, the information is correct. Though, there is a nuance about what is pointed out in the Table 1 footer -about hard disks-: in Spain, computer hard disks are supposedly -we'll check it after the new digital levies become pass by Spanish government- exempted; however, autonomous hard disks -designed to directly play their audiovisual contents- would actually have levies.
2) How could the legal uncertainties as to which equipment is levied in different jurisdictions be dealt with?
Not. We prefer the current loopholes to evade levies to exists until the system of levies can be completely abolished on grounds of its general unfairness, ineffectiveness in resolving the market-failure issues at hand, and the considerable barriers it introduces for access to cultural life.
The best way to deal with those uncertainties, according to what we have explained in this paper, would be harmonizing levies all across the European Union ... to zero -i.e., abolishing levies-.
3) What would be the fairest method to determine the private copying levy rate that applies to digital equipment and blank media?
Abolish. The economical harm done by the fundamental unfairness of the system does not justify the small increase of income for a few "big name" artists.
As we explained about a basic question about levies, if our claims for reasons -that may show why private copying levies should supposedly exist- come to be ignored; if private copying levies come to be imposed following the might versus right path; if it happens, then everyone who would be willing to do it should stop and check if any proposed private copying levies model meets two essential requirements from civil law:
- no compensation should arise from any other actions than the supposedly harmful ones -i.e., private copying-,
- no compensation should be received by rightholders of non copied works, as well as the amount of the compensation should be kept proportional to the supposedly caused harm
So if no model meets the criteria, then not only private copying levies would result unfair, but also the mere act of defending their existence would become absurd.
4) Have new levies on either equipment or media have been introduced or abolished since 2006?
In Spain, though it has not been passed by Spanish government -due to recent general election, current government is just temporary-, new levies (Spanish version) are going to be applied. Despite of lowering levies on DVD-Rs, CD-Rs and printers, the new levies on mobile phones, autonomous hard disks, pendrives and MP3/4 players show estimations -according to consumer associations like Asociación de Internautas (Spanish version)- of a 75 % percent of levies raise for 2008 -from 80 to 145 million €, without considering levies paid by public offices (because of public offices would may become exempted according to your previous resolutions; if they wouldn't, amount would raise up to 225 million €)-; such raises would come specially from mobile phones, as most of newly sold mobile phones include MP3, and there is a huge mobile phone devices market in Spain -in 2006, Nokia estimated (Spanish version) 22 million units sold only in Spain-. These are, undoubtedly, significant changes on levies.
5) Can you provide updated figures for 2007 on the amount of levies collected in those jurisdictions that apply a levy scheme?
6) Are you aware of further economic studies on the topics discussed in the Document?
In some countries like Spain and add your country comes to be impossible to say, as RMOs haven't been audited for the last twelve years; so, though they are supposed to allocate 20 % of collected levies in cultural and social funds and activities, no single authority has verified this. So, in some countries lik Spain and add your country, RMOs are managing hundreds of millions of euros because of levies and with too much permission from authorities.
8) What kind of events are funded by the sums set aside for cultural funds in the different jurisdictions? Who are the main beneficiaries of these monies?
In some countries like Spain and add your country, determining what kind of events are funded by the sums set aside for cultural funds comes to be impossible to say until RMOs become audited. Until that day, the daily activities of RMOs are an example of opacity; a situation that should be fixed inmediately.
As it has been said before, in some countries like Spain and add your country, determining what percentages of cultural funds are spent on cultural events and what percentages on pensions or social payments comes to be impossible to say until RMOs become audited. Until that day, the daily activities of RMOs are an example of opacity; a situation that should be fixed inmediately.
10) Should there be a Community-wide (binding or indicative) threshold for cultural fund deductions?
Nowadays, many national constitutions like Spanish or Portuguese entitle States to promote culture, thus that role shouldn't be entitled to RMOs -specially if later those RMOs are not audited-; a EU revision of VAT for cultural works would may allow Member States to, for instance, turn the current 16 % V.A.T. into a 4 + 12 % V.A.T, having the 4 % as normal V.A.T. and up to 12 % -not needed to reach 12 %; if lesser percentage is used, it may contribute to reduce prices- to be used directly in cultural events, pensions, social payments, cultural infrastructures, etc. Also, Member States would may encourage tax deductions to private persons and companies which decide to spend money funding such events, infrastructures and social issues; there are so many ways for encouraging culture, from a public and also from a private viewpoint, that this cultural fund deductions issue seems to be just a smoke curtain.
Cultural fund deductions for RMOs? It may be found to be as an excuse to recognize private copying levies -like arguing that by having such deductions levies become (false) automatically acceptable-. Let's stop using this kind of supposed reasonings: let's get to the point, and the point is why levies have to be collected -and only if the answer to that question comes to be true and satisfactory, then who should receive them (and how would be it determined), and who should pay them (and how would be it determined)-.
C. Cross-border trade and e-commerce issues
12) Is there a refund system available in your jurisdictions when particular equipment or media is exported to another Member State? If so, are there limitations as to the category of traders or individuals who are entitled to such a refund upon exportation?
13) What is the most suitable system of refunds upon exportation? Who is the most suitable party to claim those refunds?
14) Does Table 6 on national refund and exemption systems reflect the situation correctly? Please complete and update the table.
15) Who is the most suitable party to pay private copying levies? Should private endconsumers be exempt to self-report intra-community purchases of blank media and equipment?
Nobody. End consumers should not be bothered by reporting purchases done inside (or for that matter) outside the EU, as Treaty of Rome explicitly encourages free movement of goods and persons -thus forcing private endconsumers, even retailers, to self-report intra-community purchaes of blank media and equipments is clearly against the European Union's spirit. Also, any such requirement introduces bureaucratic overhead that seriously distort markets.
D. Professional users of ICT equipment
16) How do private copying levies affect professional users (SMEs, others)?
As we have already explained in this document, statistics from RMO's may not per default be relied upon as unbiased or correct. For instance, Table 3 with data supplied by GESAC -a very unbiased source- about levy rates and retail prices of blank DVD-R.
Table 3 depicts a Spanish scenario where levies represent approx 35 % of final prices - in itself that is already a very huge rate-, but those rates are not true. Rough estimations on the current levy on DVD-Rs in Spain leads to a more correct assertion of levies representing 43'55 % of the final price, and also 77'16 % of net price.
For big, broad retailers this in itself might not present a problem. A multi-purpose electronics store can gain income from other enterprises. For a smaller, narrower enterprise it might cause unbalanced competition as well as a big loss in trade. It might also be said that retailers and/or business owners who do not, in general, come in touch with copyright will be indirectly affected by such levies. Therefore, one could consider it a risk that businesses not directed at private individuals may suffer from such a levy.
Finally we are not commenting abuses made in the past, in the present and -if nobody prevents it- in the future by RMOs on SMEs, because we are talking -for the answer to this concrete question- about rule-of-the-law scenarios; lack of auditings to RMOs, lack of protection for SMEs, and other absurdities that happen in some EU countries are more an issue for different questions -also to be answered-.
'Backing up levies in Spain'
- 4'7 GB DVD-R: 0'60 €/unit
- retailing price, 25 DVD-R Memorex, at El Corte Inglés (as per 1-IV-08):
- 34'95 € per 25 units, included 16 % V.A.T., also included levies
- 30'1293 € per 25 units, excluded 16 % V.A.T., but included levies
- 1'205172 € per unit, excluded 16 % V.A.T., but included levies
- levies represent 49'78 % of final price, and also 99'14 % of net price
- retailing price, 25 DVD-R TDK, at FNAC España (as per 1-IV-08):
- 39'95 € per 25 units, included 16 % V.A.T., also included levies
- 34'439655 € per 25 units, excluded 16 % V.A.T., but included levies
- 1'377586 € per unit, excluded 16 % V.A.T., but included levies
- levies represent 43'55 % of final price, and also 77'16 % of net price
17) How should collecting societies take into account professional users? Should professional users be exempted from payments in the first place or should such users be entitled to a refund after payment?
As we have already discussed in this paper, it becomes useless to discuss whether to exempt anyone from payments, when the very existence of such payments -levies- has not been credited, supported by evidences of real economic harm to be compensated -unless such evidences arise, there will be no room for levies-.
If such harm becomes proven -we deeply believe it won't but ... let it be tried-, then only the ones who directly cause the supposed harm will be the ones who would become levies' debtors. And if nobody is able to precisely identify those debtors without conculcating civil rights and liberties, we won't talk about exemptions, we will talk about entire abolition of levies.
E. Grey market
18) Has the size of the grey market increased since 2006?
It comes to be difficult to precisely estimate the size of the grey market; statistics from RMOs come to be mere speculative efforts.
It also depends on what is meant with grey market; the definition included in the background paper, "the term 'grey markets' usually refers to the flow of goods through distribution channels other than those authorised or intended by the manufacturer or producer [..] are those trade flows that avoid levies by not declaring these trades at import", mixed with the using of Table 7 -where such grey market is directly labelled as illegitimate-, becomes unacceptable for us. Grey market should be interpreted merely as "the flow of goods through distribution channels other than those authorised or intended by the manufacturer or producer", channels that remain LEGAL in scenarios like the one of the European Union.
19) What are the measures Member States, collecting societies and the ICT industry are taking to reduce the size of grey market in their jurisdictions?
By the executive branch of an European Union that in the Treaty of Rome, encourages the "prohibition, as between Member States, of customs duties and quantitative restrictions on the import and export of goods, and of all other measures having equivalent effect", and also "an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital"? From the above accounts, it would be surprising should the member states take any action in these issues.
Unfortunately, this is not the case. The free movement of goods is largely restricted by member states when it comes to immaterial creations like audio, video and computer software. Some of the restriction on the movement of such goods has come straight from the EU, others are legislations prompted by RMO:s in the member states.
F. Consumer issues
20) Are you aware of consumer surveys on private copying behaviour which are used as a basis for setting the levy rates? And consumer surveys on the main sources of works or sound recordings that are privately copied?
No, at least in Spain and add your country opacity is rule when those countries determine levy rates.
Reports, surveys and other papers are not made public; we are just told to pay, without a solid why -if we are forced to pay a compensation to civil parties, usually in civil law the debtor is told the reasons for such payments; well, not in this case-, only a bunch of demagogic set phrases -private copying causes (supposedly) much harm (though such harm has not been proven, nor those surveys made public), culture is dying (though live concerts increase their incomings each year, and copyleft industry is a raising one), etc-.
If we were told how levy rates are determined, we would able to defend ourselves if -as we actually think- such reasons are not solid nor true anymore. The feeling that the actual system causes in civic groups like Todos Contra el Canon (Everyone Against Levies, a Spanish civic group with more than 2 million collected signatures against levies) and many others is that the supposed harm, apart from being invented, is boldly and imprecisely determined in a way that it doesn't actually gives money to the rightholders of the most privately copied works, but just ends giving the collected levies to bestsellers artists; in Spain, the biggest RMO, SGAE, gives the voting rights according to the incomes received from each associate ... less than 1.000 associates, from a more than 80.000 associates RMO, have more than 51 % of voting rights ... and those associates are usually the bestselling ones. Then it turns levies to be a mere surplus for best selling artists, and for the entertainment industry.
Laws are meant to harmonize everyone's rights, not to serve a tiny minority by harshing a huge majority; and public offices are meant to work transparently, not to behave with such opacity -in Spain, since 1996 RMOs haven't been audited; RMOs only collect levies and later give no explanations about how do they spend the money-. If surveys used to determine levy rates are not made public, this only confirms that private copying levies follows the might vs right model.
21) How should private copying levy schemes evolve to take into account convergence in consumer electronics?
They shouldn't. If as we have explained in this paper, reasons for levies to exist have not been given to us, specially talking about levying devices because of convergence in consumer electronics comes to be offensive.
Because a mobile phone remains to be a mobile phone whether it has another features like MP3, digital camera, voice recorders, etc; absurdity becomes law when RMOs try to put levies on every single thing that may perform reproductions of copyrighted works -for instance, blank leafs may be used to write down copyrighted song lyrics and books, should it be levied? also, if blank leafs are thus compared with DVD-Rs, should pencils, pens and other writing tools be compared with DVD recorders and be levied?-; and we talk about absurdity because even working with current laws -in spite of us clearly disagree with the very existence of levies-, levies are currently meant to be put on devices and media specifically meant to perform reproductions of copyrighted works.
We encourage you to answer if you believe that devices like mobile phones -even when considering convergence in consumer electronics- are devices meant to perform reproductions of copyrighted works. We know the answer -the answer is no, they aren't-, as well as we know that RMOs and entertainment industry just search for new sources of incomes; the question is, why should those sources be surrendered to them without any reason, and at the cost of causing real prejudice -real, not as the fake harm supposedly caused by private copying- to the huge majority of citizens, SMEs, also authors -most of them don't see a cent from levies-, etc?
G. Double payment
22) What are the main issues that consumers face when paying for digital downloads?
In many cases it is just impossible to pay for downloads. There are only very few stores were digital goods can be bought and downloaded legally and their product proposal is rather limited. The situation has improved a bit in the field of music downloads but for example books or movies just can't be downloaded in a legal way in most cases. But even if the consumer finds a shop that offers the content her or she wants it is not easy to buy it. First it is necessary to leave a lot of personal information then he or she needs to download a software for the Windows operating system. Users of alternative operating systems are therefore excluded from legal downloading. But even if the customer has Windows installed on his PC, the software works and he is able to purchase and download the wanted content, there is most likely some kind of DRM on it which locks up the work into the software and limits the opportunities of the user. Therefore many customers are driven to so-called "piracy" where it is much easier to download content, operating system independent and the can use the downloaded files without any restrictions.
It should be the task of the content-industry to change their offers according to the needs of the consumers instead of asking for more and more criminalisation of private copiers and higher levies for imagined losses.
H. Alternative licensing
24) If rightholders decide that their works can be disseminated for free, how should this be taken into account when collecting private copying levies?
Rightsholders that disseminate their work for free take an positive approach to improving cultural life, and feel that the levy collected on media on which their works are to be copy are an barrier against their work. Such rightsholders are therefore often taken the stance that collecting societies are in no way authorized to collect such levies on their account, and consider the collecting of levies a harmful limitation of their rights.
I. Distribution issues
25) What is the typical frequency and schedule of levy payouts?
26) What are the main issues encountered with respect to cross-border distribution?
27) What are the average administrative costs in levy administration (in per cent of collected revenue)?
Due to the general non-transparent operation of collecting societies, it is extremely unclear how much money actually is retained by various collecting societies. If not abolished, any collection of levies should immediately be transferred from private parties to member states' tax authorities. This would better reflect the fact that levies cannot be distinguished from a tax on cultural life.