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Germany Mulls A Copyright Levy + VAT For PCs
Willard B. Trophy writes "How does a US$13 plus an extra 16% tax on computers sound? That's what intense lobbying by publishing industry groups has forced the German government to consider. UPI has the story."
Analysis: Germany's copyright levy
By Sam Vaknin
UPI Senior Business Correspondent
From the Business & Economics Desk
Published 3/12/2003 12:30 PM
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SKOPJE, Macedonia, March 12 (UPI) -- Based on the recommendation of its patent office and following fierce lobbying by VG Wort, an association of German composers, authors and publishers, Germany is poised to enforce a 3-year-old law and impose a copyright levy of $13 plus 16 percent in value added tax per new computer sold in the country.
The money will be used to reimburse copyright holders -- artists, performers, recording companies, publishers and movie studios -- for unauthorized copying thought to weigh adversely on sales.
This is the non-binding outcome of a one-year mediation effort by the patent office between VG Wort, Fujitsu Siemens Computers, Germany's largest computer manufacturer and other makers.
VG Wort initially sought a levy of $33 per unit sold. But Fujitsu and the German Association for Information Technology, Telecommunications and New Media, known as Bitkom -- including Microsoft, IBM, Alcatel, Nokia, Siemens and 1,300 other member firms -- intend to challenge even the more modest fee in court.
They claim that it will add close to $80 million to the cost of purchasing computers without conferring real benefits on the levy's intended beneficiaries. They made similar assertions in a letter they recently dispatched to the European Commission.
The problems of peer-to-peer file sharing, file swapping, the cracking and hacking of software, music and, lately, even e-books, are serious. Bundesverband Phono, Germany's recording industry trade association, reported that music sales plunged for the fifth consecutive year -- this time, more than 11 percent.
According to figures offered by the admittedly biased group, 55 percent of the 486 million blank CDs sold in Germany last year -- about 267 million -- were used for illicit purposes. For every "legal" music CD sold, there are 1.7 "illegal" ones.
Efforts by the industries affected are under way to extend the levy to computer peripherals and, where not yet implemented, photocopying machines. Similar charges are applied already by many European countries to other types of equipment: tape recorders, photocopiers, video-cassettes and scanners, for instance.
Blank magnetic media, especially recordable CDs, are -- or have been -- taxed in more than 40 countries, including Canada and the United States.
Nor is Germany alone in this attempt to ameliorate the pernicious effects of piracy by taxing the hardware used to effect it.
The European Union's Directive on the Harmonization of Certain Aspects of Copyright and Related Rights in the Information Society, passed in 2001, is strenuous, though not prescriptive. It demands that member states ensure "fair compensation" to copyright holders for copies made by means of digital equipment -- but fails to specify or proscribe how. It has been incorporated into local law only by Greece and Denmark hitherto.
In Austria, Literar-Mechana, the copyright fees collection agency, negotiated with hardware manufacturers and importers the introduction of a levy on personal computers and printers. The Swiss are pushing through an amendment to the copyright law to collect a levy on PCs sold within their territory. The Belgian, Finnish, Spanish and French authorities are still debating the issue. So are Luxembourg and Norway.
According to Wired, the Canadian Private Copying Collective, the music industry trade group, has proposed "new levies to be applied to any device that can store music, such as removable hard drives, recordable DVDs, Compact Flash memory cards and MP3 players."
Precedent is hardly encouraging.
The aforementioned Canadian collective has yet to distribute to its members even one tax dollar of the tens of millions it inexplicably hoards. In Greece, a 2 percent levy on all manner of computer equipment provo