Private Copying Levy - Questions On Fairness

Questions On Fairness

A difficulty that immediately arises is the practical impossibility of devising a mechanism for distributing the proceeds to copyright holders that is considered "fair" by all copyright holders and consumers. Implemented systems are typically restricted to music and may distribute the proceeds proportionally to a measurement of sales of CDs in music shops or amount of air-play on radio or the like. This ignores other distribution channels such as the Internet, and it disproportionally benefits popular artists and publishers of the related products. Fairer methods would arguably involve extensive sampling of purchasers to determine actual recording behaviour, or alternatively paying all musicians at a simple flat-rate (the preferred method will depend on one's political views).

While the prime purpose of levy systems is to compensate authors, some part of the collected money is also used for general cultural funding purposes. In Germany this is even required by law. It acknowledges the purpose of cultural diversity - which is not necessarily identical to free market effects. This funding is usually executed by the same entities (collecting societies) that distribute the levy money to individual authors. One may question however whether these entities are properly qualified to make culture policy.

Levy systems assume that all authors want to exploit their work for money. However this is not always true, especially on the internet. Many authors do not write to entertain, but to inform readers, listeners and viewers. Often their purpose is to reach the widest possible audience rather than make the maximum profit from the copyrighted work by itself. The discrepancy between reality and the assumption underlying a levy system is growing as "web 2.0" matures, with pervasive user-supplied content, from Wikipedia to YouTube.

A further problem is to find a proper tariff base for levies. Conceivably the levy may be a percentage of storage media sales price (e.g. 3% in the US). The implication of such a scheme is however that the author gets ever less as technology proceeds and becomes less expensive. But a price based on units of information (bits, or megabits) is not fair either, as for instance a DVD can be used to store a film, a computer game, a large amount of documents, or measurement data. The cost of producing a certain amount of bits widely varies by type of information. Measurement data is even not copyrighted at all. Yet in today's world of converging technology, storage media can be used for a wide range of purposes.

An implementation question that arises is whether the tax applies to any type of copyrighted work or is restricted to a limited field such as music. If it is restricted then the issue arises of how to collect the tax on media which can also be used for other purposes. The options include:

• Collecting the tax on all media, regardless of the end use, and ignoring the injustice to purchasers with non-covered uses.
• Allowing taxed and untaxed media to be sold, but with only the taxed media providing the copyright-relaxation benefits.
• Collecting the tax on all media but allowing purchasers to claim a refund for media applied to non-covered uses.

Contrary Fairness arguments

• Although these complexities make the systems of levies are far from perfect they do have some advantages related to fairness in that since there is compensation for private copying whereas in countries where there is no levies, there is a substantial amount of copying taking place without any due compensation being made.
• With respect to fairness in countries with the levy everyone is shares in the financial burden caused by the levy. In countries that do not have the levy, many people are copying music and never receive any reprimands while others are made an example and prosecuted. This is the similar argument that non-proponents to the levy system use to show fault. They advocate that if the levy cannot be precisely applied to the people that are private copying, it is a faulty system. Likewise, if you cannot reprimand all people that are copying illegally and not compensating the music industry, this is also a faulty system. One system over subscribes, the other undersubscribes, both have faults.
• Finally, those counties that do not have private copying laws are in fact making many of their citizens criminals. A law which makes potentially more than 50% of your population criminals does not seem to be a fair business practice. Lawyers rather than artists may well be the greatest beneficiaries in non-private copying/levied countries.