Apple Ordered to Pay €5 Million in Private Copy Levy on iPads

In a high profile ruling handed down on May 30th, the Paris Tribunal de Grande Instance (trial court) ordered Apple to pay the princely sum of €5,000,000 to Copie France, the body tasked with collecting the private copy levy that applies to blank media and equipment capable of recording and storing such copies.

The dispute centred on "multimedia tactile tablets" (i.e., iPads in Apple's case) and decision #13 of the commission that fixes the levy rate (based inter alia on the storage capacity of the medium/equipment) which was applicable to tablets. 

In its challenge against decision #13, Apple argued as follows:  the decision was not based on any hard data flowing from a study of actual use and merely replicated a previous decision applicable to mobile telephones, which decision was quashed for failing to properly carve out professional use (the reference is to the Padawan decision of the CJEU of 21 October 2010); moreover, the previous decision's rates were ruled null and void inasmuch as they took into account unlawful copies (the reference is to a 2008 ruling by the Conseil d'Etat which established the principle that only lawful copying could be compensated via the private copy levy).

The Court was indeed sufficiently impressed with these arguments that it ordered a stay of proceedings pending the outcome of the administrative action directed against decision #13.

However, Copie France sought an award of a provisional amount, relying not on decision #13 but rather on the general statutory principle that such compensation is due.  The Court agreed with this line of reasoning, noting that such principle was enshrined in both domestic and European law.  It further noted that Apple, as supplier of the equipment at issue, was indeed the party that owed the levy.  The Court thus fixed the amount of the provision at €5,000,000, to be applied against the final sum to be determined for the period between February and December 2011 (and ordered that its judgment be enforceable notwithstanding any appeal).

This important ruling comes at a time when the government is, in the wake of the Lescure report, contemplating a tax based not on recording or storage capacity per se but rather the internet connectivity of the device (thereby recognizing that, when it comes to getting their hands on cultural goods, consumers are moving away from a copy-based system to an access-based one).

See ruling here