EU referees digital royalties spat
The European Union is moving to defuse a clash between technology companies and national agencies over who should collect payments for digital royalties.
The battle is brewing between companies that use digital rights management (DRM) services — such as Apple’s FairPlay — that limit copying, and royalties collection societies in individual European countries that are seeking to impose new fees on digital devices, such as the iPod.
Chairman of the DRM and copyright task force of the European Information, Communications and Consumer Electronics Technology Industry Association Jens-Henrik Jeppesen told the International Herald Tribune (IHT): “Europe has to decide if it wants to go for DRM or go for a taxation model, but consumers should not be hit with both.” [emphasis added]
There are concerns that as levies are increased, consumers using DRM systems that incorporate payment systems may find themselves paying royalties twice – once when they purchase new digital recording equipment, like the iPod, and again when using a downloading service that uses digital rights management.
But levy collection agencies and the IFPI (an international recording industry group), argue that it will be years before DRM is widespread enough to ensure copyrights are adequately protected and that in the meantime levies are playing a crucial role. European legal counsel for IFPI Olivia Regnier told IHT: “Not everyone is paying twice - there are still plenty of cases where there is no payment and no levy.”
The DRM Working Group’s efforts are generally documented here. Here’s the press release that led to the MacWorld article: Copyright: the Commission advocates European legislation on the governance of collecting societies, which points to Intellectual Property > Official Documents (legal texts in force and new proposals).
And, from there, we find the report: The Management of Copyright and Related Rights in the Internal Market From page 10:
Member States also have to take into account the application or non application i.e. the degree of use (Recital 35) of technological measures when providing for fair compensation in the context of the private use exception as permitted under Article 5(2)(b). The Directive requires Member States to arrive at a coherent application of the exceptions. The extent to which this has been achieved in relation to the application of the requirement for fair compensation will be assessed when reviewing implementing legislation. Any such review will include, in particular, the criteria which Member States refer to or will refer to in order to take such application or non-application of technological measures into consideration when determining remuneration schemes in the context of the exception for private copying. The Commission has a specific mandate to do so within the context of the Contact Committee established under Article 12. A wider availability of DRM systems and services can only bring additional value to both rightholders and consumers if it contributes to the availability of protected content and facilitates the access of end-users to protected content. Transparency on the criteria and elements that Member States use or will use to take into consideration the application or non-application of technological measures must therefore be ensured and clarification provided through the required implementing measures.
Arguably, the widespread deployment of DRMs as a mode of fair compensation may eventually render existing remuneration schemes (such as levies to compensate for private copies) redundant, thereby justifying their phasing down or even out. At the same time, in their present status of implementation, DRMs do not present a policy solution for ensuring the appropriate balance between the interests involved, be they the interests of the authors and other rightholders or those of legitimate users, consumers and other third parties involved (libraries, service providers, content creators …) as DRM systems are not in themselves an alternative to copyright policy in setting the parameters either in respect of copyright protection or the exceptions and limitations that are traditionally applied by the legislature. In this respect, the Commission is also under a duty to examine within the context of the Article 12 Contact Committee, whether acts permitted by law are being adversely affected by the use of effective technological measures (so called “technological lock up”).