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Wednesday, 21 November 2012
Hardware providers sue Dutch government over private copying levy hike
Further to recent
changes to private copying compensation in Spain, change may also be afoot
in the Netherlands.
What do you mean we've moved on?
The private levy system in the Netherlands
has been frozen since 2008 meaning that whilst blank audio and video tapes,
MiniDiscs and blank DVDs and CDs are subject to levies, smartphones and MP3
players are not. To bring the system up to date, the Dutch government announced in
October that new, increased, private copying levies would apply to all hardware
from January 2013.
The new levies are set out below. They
increase from €0.03 for CDs and DVDs to €5.00 for tablets over 8 Gb, PCs and
Understandably, this sudden propulsion of
private copying levies into the modern world has caused some tension: last week
three of the big hardware providers (Dell, Hewlett-Packard and Imation) along
with other big players in the industry sent a letter to the State Secretary for
Security and Justice, Fred Teeven, saying
that the levies would "cause trade barriers and serious disincentives
to operating logistics hubs and distribution centers in the Netherlands".
Further they said that the levies were likely to conflict with the Information
Society Directive which, they say, requires that fair compensation be based
on assessment of the harm caused by private copying.
Last Wednesday, Hewlett-Packard, Acer,
Dell and Imation, went further and filed a claim against the Dutch government
at the District Court of the Hague claiming damages caused by the new, higher,
private copying levies.
It is not clear to this blogger how a
claim for damages can be filed when as yet no damages have been incurred,
however the big four say that in 2013 alone they will suffer damages of "tens
of millions" of Euros. Damages aside the main gripe seems to be that
the new levies were based on an estimate that the entertainment industry has
lost €40 million due to private copying. The hardware providers say that the
estimate is "excessive and unfounded" and that it includes losses due
to illegal downloads which should not be recovered by way of private copying
levies. As we reported here,
the question of how the private copying exception applies to illegal content
has been referred by the Dutch courts to the CJEU. Further the hardware
providers argue that it is not right that the new levies should apply to all
devices, including devices for professional use that are not used for private
Private copying levies are always a
touchy subject and such sudden increases were never going to be popular. Is the
solution to make private copying illegal, as it is in the UK, and so abolish
the levies? Or to implement one European-wide levy so that at least particular
markets within the EU are not disadvantaged? And will the Dutch move on to think about imposing levies on the cloud?