DIGITALEUROPE Position on EC Communication on Copyright

Link between compensation and harm to right holders

Our members are suffering daily due to inconsistent and non-transparent harm assessment and tariff setting processes for all products in many Member States. Without transparency in the harm assessment and the tariff setting processes, it is impossible to Digital Europe’s members to determine if the harm assessment is fair, or if there is, for example, a mistake on the counting of private copies that are allegedly causing harm which leads to the setting of grossly inflated levy tariffs and, once again, a situation of over-payment of the levies by consumers for illusory harm.

An even worse situation arises in some Member States, where collecting societies arbitrarily claim tariffs retrospectively, either based on unilateral publication by collecting societies of products that they believe should be subject to levies, or because of making a re-interpretation of existing laws making a broad definition of products (e.g. “devices technically suitable for private copying”) subject to levies. In such cases, importers and manufacturers have been denied the opportunity to “pass-on” the levy cost through their distribution chains.

A survey conducted by one of our members shows that, in the case of mobile phones, the range of levies imposed on manufacturers/importers for a 16 GB mobile telephone goes from a 0.48 EUR levy tariff in Slovenia to a 10.5 EUR levy tariff published by the collecting society in Hungary, which is about 20 times higher. It is simply impossible to believe that the copying habits of EU citizens are so different in individual Member States.

The incredible differences in tariffs combined with a multitude of diverse criteria for levy payments concerning the same products among the Member States fortifies our belief that there should be harmonized processes for harm assessment and setting tariffs at the EU level. This is not to suggest that all tariff levels in all Member States should be harmonized, but that underlying principles and methodology used in accessing harm and setting tariffs for the same products or product categories should be same.

We believe that there are no justified reasons for tariffs on the same products to be so different as to make a product uncompetitive in a Member State market due to an excessively high levy tariff imposed on a particular product by a particular Member State. These unjustified and inflated levy tariffs provide enhanced incentives for unfair competition by unscrupulous traders selling products without paying levies. As companies selling basically the same products in different Member States, we believe that the approach on how to assess the alleged harm of private copying should be the same in every Member State. Inasmuch as the EU Copyright Directive provides for a uniform concept of “fair compensation” at EU level, it is only logical and prudent that the harm assessment, which is fundamental to this harmonized definition, should be recognized as an EU methodology applicable to all Member States.