Private Copying and Fair Compensation: An empirical study of copyright levies in Europe

November 2011

All areas

By Professor Martin Kretschmer, Centre for Intellectual Property Policy & Management, Bournemouth University

Professor Kretschmer has produced a report on the legal basis, rationale and economic effects of copyright levies as part of his ESRC Fellowship at the UK Intellectual Property Office. The research “Private Copying and Fair Compensation: An empirical study of copyright levies in Europe” reports a large amount of new empirical data, including three product level studies of printer/scanners, portable music/video/game devices, and tablet computers. The relationship between VAT, levy tariffs and retail prices is analysed for 20 countries.

Following the Information Society Directive of 2001 (introducing the concept of “fair compensation” for private copying into EU Law), total collection from levies on copying media and equipment in the EU tripled, from about €170m to more than €500m per annum. Levy schemes exist now in 22 out of 27 Member States (with only the UK, Ireland, Malta, Cyprus and Luxembourg remaining outside).

Professor Kretschmer says that despite their wide adoption, levy systems are little understood, both in respect of their rationale and their economic consequences. Tariffs are increasingly contested in court, leading to a large gap between claimed and collected revenues. The European Commission has announced “comprehensive legislative action” for 2012.

This report offers the first independent empirical assessment of the European levy system as a whole. The research consolidates the evidence on levy setting, collection and distribution; reviews the scope of consumer permissions associated with levy payments; and reports the results of three product level studies (printer/scanners, portable music/video/game devices, and tablet computers), analysing the relationship between VAT, levy tariffs and retail prices in 20 levy and non–levy countries.

Some of the key findngs are fascinating: Professor Kretschmer notes the dramatic differences between countries in the methodology used for identifying leviable devices, setting tariffs, and allocating beneficiaries of the levy and also notes that there are levies on blank media in 22 EU countries, on MP3 players in 18 countries, on printers in 12 countries, on personal computers in 4 countries. Revenues collected per capita vary between €0.02 (Romania) and €2.6 (France). But all that said, the distribution of levy revenues to recording artists is less than €0.01 per album.
More on Professor Kretschmer’s paper can be found using the link below which also provides a link for a download of the full paper: 

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