France to Impose $1/Gigabyte Hard-Drive Tax

SysKoll writes: "Some obscure commission in France has decided to slap a 0.50 euro per GB tax on all hard drive used in appliances that can record video or audio broadcasts. The official announcement will be made on June 27. The tax is on bulk HDs so consumers will end up paying twice as much, or about $1 per GByte. All these taxes will go to a state agency supposed to redistribute it to copyright holders, i.e., disc labels and TV networks. This is quite frightening because if this test balloon is left unopposed, the rest of the tax-hungry European countries will follow, and the RIAA and MPAA will have a real-life example to show to Washington lawmakers. Here are the details: This tax applies not only to TiVo-like video 'time-shifting' recorders, but also to all the upcoming digital set-up boxes and HDTV sets that include a hard drive. As for audio appliances, MP3 players with an embedded hard drive will also be taxed. The 0.50 euro tax is imposed on hard drives sold to audio and video manufacturers, so by the time the manufacturers and distribution channels have added their mark up, the price increase will easily be doubled to a cool dollar per gigabyte (1 EUR = 0.93 USD or so these days). The news article (in French) is here. Use Babelfish if vous ne parlez pas French. Note that the French abbrev for Gb is Go. Here is an excerpt: 'According to our information, for a decoder of 80 GB, the [proposed tax] goes from 15 to 20 euros. And for a hi-fi system with 40 GB, they would be spread out from 20 to 25 euros. "But one has to expect that for the consumer, these prices will double," warns Bernard Heger, representative of Simavelec (Trade union of industries of electronic audio-visual equipment).'"

Comments

Stupidity at it's finest

[GrandCow]

I can see it now. The market for the lower storage devices is going to explode... and the ammount of low GB hard drives that are tossed in the trash (after people hack their tivo/ultimateTV/whatever with a much larger hard drive) will also rise quickly. Maybe the person who bought the device can't do it themselves, but with the proliferation of tech-savy people that can do such an easy mod (boot from floppy disk, have new hard drive set up as master, click ok and wait 30 minutes) and will do it for say a case of beer, hacking these boxes is about to get a lot more common.

Re:Stupidity at it's finest

[GrandCow]

You mean in a similar fashion to the way hard drive sales exploded when they started taxing CD-R media....? Or the way compact car sales exploded when they started adding a "Gas Guzzler" tax to SUVs?

I know it's a bit late to be replying to this but I still think it should be said...

I know quite a few people that stocked up on hundreds of CD's when the news of the CDR tax came around. As for the gas guzzler tax on SUV's, that kind of car was and still is in style. People like the big, obnoxious cars, and the minivan is quickly being replaced by the SUV. That kind of vehicle actually has a benefit that cannot be added to a smaller car. What I can see happening with the PVR's is that a person will walk into a store and see that the price difference between the recorders will become much, much larger than before. Whatever markup was on the 40GB larger Tivo before, add another $40 on top of that. That's making much more of a difference. Maybe the person will not buy the lower priced one planning to hack it themselves, but when there are percieved rip offs people bitch. Bob the 50 year old may be hosting a party and ends up showing off his new toy to some of the people there. The conversation may move to him bitching about how it was $100 more just for another few hours of recording time. John the sometimes-hacker may overhear and mention that the hack can be done rather cheaply, easily, and quickly. The next day Bob might call up John and have him do the replacement for him.

Re:Stupidity at it's finest

[Coolfish]

it's != its

so, thank you for contributing to stupidity at its finest.

Kick ass!

[voisine]

I should move to France. With MP4 encoding
I'll be able to get unlimited music/movies for
life for a one time fee of a few bucks! I'd
think the MPAA would be pissed about this.

Re:Kick ass!

[Rick the Red]

Exactly. As in the case of the tax on blank CDs in Canada, this is gives you the legal right to copy any damn thing you want -- you already paid the royalty when you bought the media! (IANAL, but that's the arguement I'd make if they tried to charge me with "pirating")

Go?

[Otter]

Note that the French abbrev for Gb is Go.

Wondering about that? Me too. Apparently it stands for "gigaoctet". I guess "byte" is a non-native word so it had to be replaced with a certifiably French equivalent.

Re:Go?

[smallpaul]

octet jargon, networking: Eight bits. This term is used in networking, in preference to byte, because some systems use the term "byte" for things that are not 8 bits long. (1995-03-03)

http://www.dictionary.com/cgi-bin/dict.pl?term=oct et&r=67

Re:Go?

[jackbang]

Don't get the idea that the French need to have their own word for everything. Before I lived in Paris I was scared by the stories we see in the US all the time saying how the French are such purists about letting English invade their language, so I spent time learning to say things like "la toile" (lit. the web). When I got to France people told me I sounded like an idiot and to just say "le Web" like everyone else.

User-upgradable storage

[Deagol]

Assuming this only applies to drives sold with these units, manufacturors might start making easy at-home upgradable units. Imagine buying a Tivo with a 10GB drive, then being able to replace it with a commodity 160GB drive from Circuit City.

I can't imagine the computer industry allowing commodity hard drives to be taxed like this. There's just no way I could see it happening.

Sounds like a good idea

[anthony_dipierro]

As long as citizens are given immunity from copyright lawsuits using hard drives, a la the Audio Home Recording Act

Re:Sounds like a good idea

[Dyolf Knip]

As long as citizens are given immunity from copyright lawsuits using hard drives

Indeed. Such is the current situation up in Canada, I believe. But I have to wonder how long it would be before the -AA's start demanding you pay for your cake and for eating it as well.

Furthermore, Moore's Law dictates that the dollar value (or rather, Euro value) of this tax will very soon become wildly out of proportion to the cost of the drive itself. When terabyte drives reach the price of today's 100GB drives (4, _maybe_ 5 years?), this current tax would increase the cost of the drive by 900% ($1000 tax on a $125 drive). How often are they going to adjust it to reflect the decreased cost of media, if at all? Canada's CD-R tax is going up, despite the ever-decreasing price of the discs.

So while it might be convenient today, it certainly won't be tomorrow.

Re:Sounds like a good idea

[anthony_dipierro]

How often are they going to adjust it to reflect the decreased cost of media, if at all?

It doesn't really make sense to decrease the cost due to decreased media costs.

So while it might be convenient today, it certainly won't be tomorrow.

What's the alternative? Misusing Moore's Law (which applies to transistors) for bandwidth as you did for hard drive storage, in 4 or 5 years we'll be able to download entire movies in minutes. Do we start door-to-door FBI raids? Do we hope people will just play fairly? Do we have the government subsidize media companies? Do we just let them go out of business?

Hopefully the media companies will come up with their own solution to the problem, one which doesn't rely on babysitting hundreds of millions of people, but if not, the government likely is going to be forced to do something.

Re:Sounds like a good idea

[gmhowell]

Yes, he misused Moore's Law, but there should be a corollary relating to hard drive space. I am not sure that we'll be talking about terabyte drives (although I could see PVR's holding an array that consists of a terabyte) but there's no reason to believe that the entry level drive won't be .25 to .5 TB.
So while it might be convenient today, it certainly won't be tomorrow.

What's the alternative? Misusing Moore's Law (which applies to transistors) for bandwidth as you did for hard drive storage, in 4 or 5 years we'll be able to download entire movies in minutes. Do we start door-to-door FBI raids? Do we hope people will just play fairly? Do we have the government subsidize media companies? Do we just let them go out of business?

Umm... Not sure what you are getting at here. Taking umbrage at his claims that it's okay now? Saying that this would lead to FBI raids? I think it's just written so it's a little confusing.

But that won't stop me from offering up an opinion (it is /. after all). That sounds like the way things can eventually be. Wasn't that Norwegian kid extradited for DeCSS? No, we don't subsidize the media companies. We DO let them go out of business. Why should Universal Studios be any different than Enron? Cockamamie business plan leads to corporate death. Oh well. I don't see the Feds giving a handout to the business I work for during tough times. I didn't see them help out the local whitebox shop when they had a rough spot. Why is Hollywood different?

The government will be 'forced' only in that they would like to keep their stipends, er, campaign contributions from Disney et al.

Re:Sounds like a good idea

[Dyolf Knip]

It doesn't really make sense to decrease the cost due to decreased media costs.

So the amount of stuff it is economical to store rises no further on the say-so of a bunch of rich execs who have nothing to do with data storage? I sure hope we'll never need anything more than 100 or 200 GB, since nobody'll be able to afford the taxes on it. Kindly imagine what would have happened if they'd tried this when Napster started up. As I recall, 20GB was a good sized drive at the time, so to get an equivalent tax on a 100GB drive today, you'd have to tax $5 per gig. Which means that you wouldn't be able to get a 100GB drive today for less than $500. Swell. Let's shaft IBM, Maxtor, Seagate, Western Digital, and everyone else in that business to protect people from copying bits. How noble. And you don't need to point out that this tax is only on Tivo's and whatnot. It's only a matter of time before they try to apply this to computer storage in general.

Terabyte hard drives/able to download entire movies in minutes

Are you implying that this will never happen? Lemme guess, 5 years ago you said that 56k was the fastest Internet connection the population would ever be able to have. And 10 years ago you said that we'd never ever have affordable 100GB hard drives. For your information, the technology to store a terabyte or move an entire DVD over the Internet in minutes already exists. It is simply too expensive to succeed in the market. To look at the past 50 years in computers and say with complete and total confidence, "Oh _that_ will never ever happen" is hubristic in the extreme.

What's the alternative?

Uh, well, gee, maybe you could actually not tax a product on the grounds that it might be used inappropriately and cause a potential loss of income to someone? They don't do it for any other product, even ones with anti-IP potential, I fail to see why hard drives and CD's should be any different.

Do we start door-to-door FBI raids?

Why not? If it's illegal to copy bits, then go after the people doing it. This tax is not unlike giving everyone a year in prison on the basis that some of them would end up there anyway and by doing it this way you save the trouble and expense of actually trying and prosecuting them.

Do we just let them go out of business?

And since when is it my responsibility to keep potentially doomed businesses alive? Or the government's? Since when is it anybody's responsibility but the business in question?

the media companies will come up with their own solution to the problem

They already have. They buy legislation that gets them money for nothing and convince suckers like you that it's good for you.

if not, the government likely is going to be forced to do something

Explain the logic underlying that conclusion, please. Music and movie conglomerates are not critical industries. They do not employ vast amounts of workforce whose skills are useless without them. They are not irreplacable. Dollar-wise, they do not even count for much. Why on earth is it absolutely imperative that these companies continue to make a profit?

Re:Sounds like a good idea

[Dyolf Knip]

The idea is that the tax is based on the amount of copyrighted material that the drive holds.

No it's not. It's based on the amount of copyrighted data it _could_ hold, which is totally arbitrary. I get taxed for it even if I fill it up with nothing but zeros.

Is it now? Let's see, does the CBDTPA make distinctions between A/V equipment and electronics in general? Why no, it doesn't. Now where on earth could I have drawn the conclusion that, having failed once, the media industries will take a different tactic towards banning general purpose machines?

your suggestion that we do door-to-door FBI raids will cost the taxpayers much more money in the long run

I'm suggesting that they actually enforce the laws they have on the books rather than just punish everyone because they're too lazy to go after the actual offenders.

the public supported government intervention in order to promote the progress of science and useful arts

Just what planet do you come from? Since when does "granting patents and copyrights to authors and inventors" translate to "must keep giant media corporations alive as at all costs"?

Music and movie conglomerates are not critical industries. I was under the impression that the public thought otherwise

I can't imagine where you got that idea. Entertainment is certainly critical. We have a hard time functioning for any length of time without it. Disney, however, is not. Hollywood could drop off the face of the planet and the rest of the world would continue to function quite nicely. People were entertained before the -AA's and we can be entertained again without them.

If you'd rather we drop copyright law altogether, I'd certainly be willing to support that.

Copyright in the Constitutional sense does not translate very well to the information age. Authors should be compensated for their work, but copyrights and the methods of enforcing them are becoming increasingly inappropriate. If it has outlived its usefulness, then by all means, get rid of it.

Re:Sounds like a good idea

[anthony_dipierro]

Let's see, does the CBDTPA make distinctions between A/V equipment and electronics in general? Why no, it doesn't. Now where on earth could I have drawn the conclusion that, having failed once, the media industries will take a different tactic towards banning general purpose machines?

Because the CBDTPA is doomed to failure.

I'm suggesting that they actually enforce the laws they have on the books rather than just punish everyone because they're too lazy to go after the actual offenders.

And I suggest that they take those laws off the books, because it's ridiculously stupid to enforce them, and it's equally stupid to have laws on the books which aren't enforced. We've done it in the past, with the Audio Home Recording Act, and I think that law is about the only sane one we have on the books regarding copyright.

Re:Sounds like a good idea

[Dyolf Knip]

Because the CBDTPA is doomed to failure.

A fact that both of us are extremely happy about. But I guarantee you that the -AA's haven't given up on it. If they can't make a general purpose computer illegal, they'll try to make it unaffordable. The tax on Audio CD-R's in Canada is already several times the cost of the disc itself. The reasoning used to justify those taxes, insane though it may be, so very easily lends itself to taxing anything else available in a computer store.

I suggest that they take those laws off the books, because it's ridiculously stupid to enforce them

Hear, hear. Basically there are three options: Take the laws off the books, continue bumbling along with what we've got, or try for even more restrictive laws. The first and most sensible option is rather unlikely (though I'd be first in line to cheer if it did). There's simply too many representatives whose support has been bought for copyright as it stands today to simply die. Look at the War on Drugs; one has to be a complete moron to think it's going well and is even remotely worth the effort sunk into it, but it continues nonetheless. And given the choice between the other two, I'd rather the government didn't opt for some nutty "spread the punishment" law enforcement scheme. Sticking with what we've got is merely the lesser of two evils.

Re:Sounds like a good idea

[Dyolf Knip]

In this case, apparently that refers to closing HTML italics tags?

Interesting. Opera doesn't extend italics past a line or paragraph break. So it looked quite correct when I previewed it. Thanks for the tip.

Re:Sounds like a good idea

[anthony_dipierro]

The tax on Audio CD-R's in Canada is already several times the cost of the disc itself. The reasoning used to justify those taxes, insane though it may be, so very easily lends itself to taxing anything else available in a computer store.

You keep bringing up the tax on CD-Rs in Canada, but the tax on Audio CD-Rs in the United States is a much better analogy.

And given the choice between the other two, I'd rather the government didn't opt for some nutty "spread the punishment" law enforcement scheme. Sticking with what we've got is merely the lesser of two evils.

I don't know. I think it's dangerous to have criminal laws on the books which are not enforced. The fact of the matter is that running napster to distribute others' works is criminal. I think that leads to government oppression, through selective enforcement.

I think certain selective taxes on economic bads are useful in cases like this. Cigarettes are taxed, because they contribute to the public health problems. Gasoline is taxed, because the way most people use it pollutes the environment. Blank audio cassettes are taxed, because most people use them to copy copyrighted audio. Are you opposed to taxation of gasoline? Just because I have the gasoline doesn't mean I'm necessarily going to burn it.

Does the tax keep up with price/size ratio?

[0x0d0a]

The price per gigabyte has dropped quickly over the past few years. Are legislators going to stay on top of this and have the price constantly go down, or is this going to end up inflating the price of hard drives to eight times their normal market price a couple of years down the road?

I'm really nervous about a system where the government is responsible for reducing the amount of money it gets -- and if it does nothing, gets more and more.

Re:Does the tax keep up with price/size ratio?

[0x0d0a]

I can also store a bazillion books on my computer, but I don't think it's reasonable to charge me a million dollars tax for my hard drive.

Of course, this is the French that we're talking about...

Re:Does the tax keep up with price/size ratio?

[CokeBear]

Your hard drive holds a million gigs?

It will... someday

That's absurd

[inerte]

How about tax my armoire? It holds records, you know.

Re:That's absurd

[unitron]

Isn't armoire a French word? They probably expect you to pay them a royalty.

Re:Appliances? PCs?

[ObviousGuy]

You will have paid the tax when you bought the hard drives.

Re:The French tax everything anyway.

[Anonymous Coward]

White flags aren't actually that expensive.

Reality check

[babbage]

Just to be sure, can someone -- preferably from or at least in France -- confirm this story? I'm just suspicious because this sounds a lot like a permutation of the urban legend that makes the rounds every now and then. You know the one -- the hysterical, shrieking paranoid email chain forward claiming...

{ $agency } is planning to put a tax on { rand qw/emails bandwidth memory discs CPU/ }, because the growth of the internet has prevented { $agency } from earning the same revenues that they used to get from { rand qw/postage phones tarriffs whatever/ }, so you all have to contact { $local_goverment_official } letting them know that this will bring an end to modern society as we've all come to love it.

So, like, I'm willing to accept that this time it might be real, but considering how many times this hoax has made the rounds, I want to hear it from a reliable source rather than some web site I -- as an American that doesn't typically prowl the contemporary French tech/political web sites -- am reluctant to trust without at least getting a second opinion.

Why I'm asking for a trustworthy second opinion on Slashdot, well, let's just dance around that one eh? :-)
(And while you're at it, pardon the pseudo-code, I'm just trying to get the idea across... :-)

Re:Reality check

[moncyb]

I don't know about French politics, however this seems much like the US law that requires all makers of "any digital audio recording device or digital audio recording medium" (aka CD burners, blank CDs, etc.) to pay royalties to two funds--1/3 to a "musical works fund" and 2/3 to a "sound recordings fund". See TITLE 17 CHAPTER 10 SUBCHAPTER C of US law.

The French are just doing the same thing. From the main post and the article, it doesn't appear to be an actual "tax", but "royalty payments" to a select group of copyright holders (aka the entertainment cartel).

Re:Reality check

[kigrwik]

Grab your best babelfish::legalese and check there:

http://www.legalis.net/jnet/2001/rem_copie_prive e/ rem_copie_privee.htm

I can't find the exact articles in the law it refers to , as they've been edited out from the official site:

http://legifrance.gouv.fr => 'Loi' and search for "2001-624"

However it seems real enough. We already pay taxes on the CD-Rs we buy. I *think* that if you can prove you buy them for commercial purpose, you can get a refund.

Well, it also means that I can download and rip all I want, since I'm paying for it !
Maybe we'll have a "tax" for shoplifting too ?

Re:Reality check

[kigrwik]

'tis even worse, my friend.

Not only you get refunds for the tax you unduly paid, but you may also apply to get your share of that money you were stolen by the rip-and-copy pirates that copy music on CDs instead of buying your [ripped] CDs !
T
hat's an awesome business-plan ! A bit like entropy, but backwards: at every iteration, you generate more money !

Reminds me of:
Recursive: adj, see 'recursive'. :)

Re:Reality check

[darkonc]

On the bright side, if we're paying royalties for the media, this would indicate that it's now legal and legitimate to suck stuff off of sites like (the now defunct) Napster. Since we already pay royalties for the CDs that we buy, These royalties must be for music on CD's that we didn't buy. I'd definitely be up to making that argument in court (and in public), and that's the spin that I'd put on it for now (in hopes that the music industry would back off).

I definitely don't think that it would be appropriate to be paying for somebody else's crimes. So far, every CD that I've ever burnt has been data -- although I did look at using a burner to duplicate a (dead) friend's music to make it publicly accessible. (there was a consortsium of us looking at that).
In a situation like that, would we be looking for a refund, or attempting to collect the royalties that we paid (along with a boost for any that were subsequently copied)?

Re:Reality check

[kigrwik]

ah, yes indeed, you are right, since infinite recursion is not usually useful. An insightful
comment ! :)

However the more simple quote makes it easier to use out of its context (formal dinner in town, for example :)

Beauty of the EU

[leastsquares]

The French people will just pop over the border to Spain or Belgium, or somewhere, and buy the untaxed gigabytes there...

...so unless the tax is sufficiently low, the French government will soon realise that they are losing more in sales taxes than they are gaining in Gb taxes.

Is this then permission?

[dpilot]

After all, if a tax is being paid to make up for lost revenue, then does it legimize the act?

Doesn't the same apply here in the US? Wasn't there a story a while back about how there's a surcharge on CDRs to cover lost revenue to the record companies? Since I'm paying a 'tax' doesn't that either imply that I'm now paying for the content and have permission to download and burn. Or does it imply that I've been declared guilty without a trial and am being punished for an act I've never committed?

Re:Is this then permission?

[skotte]

audio CD-R? digital CD-R? wtf? is it just me or is there absolutely no difference. like, maybe i'm wrong, so fFlame on. but as fFar as i know, a CD-R is a CD-R, isnt it?

If true, interesting things will happen.

[jotaeleemeese]

French consumers with a clue (I hope there are many) will order their stuff from other EU countries. Now finally they have got an incentive to polish that English, German or Spanish.

Secondly, artists not belonging to the enterteinment cartels would be amazingly stupid if they don't claim their part of the share, which if it is denied, will give them a huge case to go to the European courts to fight this appaling piece of pseudo legislation.

Thirdly, French consumers should demand to store whatever they want in the medium of their choice. They will be paying blanket royalties, they should get blanket access.

To be honest I would not be against an scheeme like that: you pay for media, get taxed, the money goes to the artists (or their leeches, if the artists don't have guts to organize themselves I could not care less) and then you can put whatever you want in that media without ever been bothered by one of the cartels' lawyers.

the drive becomes the media

[teambpsi]

i suspect that more likely, the drive "bays" will become more like option-slots in the devices.

of course they are trying to impose taxes on the CDR's too

Sonny Bono owns you

[yerricde]

I can also store a bazillion books on my computer, but I don't think it's reasonable to charge me a million dollars tax for my hard drive.

Over half the books ever published were published since 1950. Every book published on or after January 1, 1923, or whose author died on or after January 1, 1931, or which is an adaptation of Peter Pan by J. M. Barrie, is under Bono Act copyright in United States and/or one or more countries in the European Union. (The Bono mentality is to extend copyright by 20 years every 20 years, circumventing the "limited times" language of the United States Constitution.)

Please donate to Eldred's legal fund.

Re:They dont even have to pop over the border..

[leastsquares]

I live in denmark,

Never mind, hey. I promise not to comment on Sorensen's own goal in this reply.

and when i buy my dvds online from England i pay vat/taxes there

I live in the US, but I buy nearly all of my books, CDs and DVDs from England. I don't have to pay any VAT. :-)

"importoffice"
"Customs and Excise" in Britian.

why?

[MemeRot]

If you can already legally do it, it seems no further compensation is required, very odd