Austrian Rights Holder Group Wants To Hit Cloud Services With A 'You Must Be A Pirate' Tax

from the cloudy-with-a-chance-of-rent-seeking dept

Another “YOU ARE ALL PIRATES” levy is being proposed by Austrian rights holders group Autoren. In addition to the fees already paid by consumers on blank CDs and DVDs, IG Autoren is pushing even further. And it's not just interested in physical media.

Consumers in Austria already pay levies on blank CDs and DVDs. Rights holders have been advocating to expand these kinds of fees to hard drives and other forms of storage media as well, and apparently aren’t just thinking about local storage. In its newspaper, IG Autoren wrote:

“We not only want a hard disc levy, we also want a levy for the usage of the cloud.”

Hardware makers have pushed back, calling these proposed levies what they really are: double dipping. Consumers already pay the levy on blank media and now, Autoren wants to tax the computer, the hard drive and the cloud it connects to. With the dropoff in sales of blank media, IG Autoren's got to make up the income somewhere, right? This is what passes for “fairness” in the eyes of rights holders. If one form of media dies out, along with its associated fees, it must be replaced with another. Rather than face the fact that a business model that predicates itself on the assumption that piracy is the main reason people purchase CDs, DVDs, hard drives and cloud storage is a thoroughly flawed model, IG Autoren would rather push for additional levies — all in the name of the artists, of course.

One would think that if levying taxes on storage was such a money maker, artists would be better off selling blank CDs at their merch tables if they could collect the levy directly, rather than through a third party. In fact, for those further down on the sales chart, it just might be, considering the “trickle down” effect continues to rain dollars on the most successful artists while leaving the other 95% with mere pennies.

Not that IG Autoren is interested in approaching this logically. To defend its rent-seeking, it points to Germany, the country with some of the most screwed up concessions to rights holders' demands.

Rights holders on the other hand point to Germany, where levies are already in effect. German consumers currently pay €13.65 ($17.66) for every PC and between €7 and €9 for external hard drives. However, there is no fee for cloud storage services in Germany.

The European Commission is currently considering reforms to copyright law to better apply it to the digital age. IG Autoren apparently believes means this means it should be able to apply its levies, ones that began back in the analog age of cassettes, to cloud services and any other technology that could conceivably hold an mp3. And it's not just IG Autoren. As reported back in October, a coalition of rights holders sent a submission stating that they were “entitled” to remuneration for personal copies. Fortunately, the commission's paper pointed out that cloud services actually reduced the number of copies made, making a private copy levy “less appropriate.”

If the past is any indication, these rights holders will likely be granted a levy on hard drives and other storage devices, but cloud services may be a tougher battle. Considering many services offer limited free accounts and are likely unwilling to foot the bill for a €7-9 levy, this means these services won't be available (at least not the free option) in countries collecting this fee. The end result of this rent-seeking is fewer options for the public simply because a handful of rights holding organizations feel they're “owed” a cut from anything that can conceivably hold copied files.

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Comments on “Austrian Rights Holder Group Wants To Hit Cloud Services With A 'You Must Be A Pirate' Tax”

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50 Comments
fogbugzd (profile) says:

One reason it is often easy for rights groups to get this kind of legislation passed is that the people who are hurt are so not have any type of lobbying organization to fight the measure. In this case the collection society is stepping on the tires of companies like Google and Amazon. I am sure they would not like to see this type of thing started in Australia and have them be a model for the rest of the world.

Anonymous Coward says:

Re: Re: So does this mean...

Well, the levies are officially branded as compensation for the copyright exemptions in place, like making it legal to share with your family and take a single copy for backup. I wonder how much we pay for those rights. I would guess it is about the same as a few legal CDs each month. For some of us, that is more than we spend on music. That almost none of it goes to the artists is just good business…
Levies are not branded directly as compensating for piracy, which is the reason they are there and growing like a tumour.

Anonymous Coward says:

From the Copyright Industry.

We have attitude that we own all of culture, and therefore we should be able to gather in as much money as possible. Note these are not fees to allow sharing of culture, but compensation to the top artists for the copying we do not detect. We still reserve the right to claim every all your money if we detect you indulging in piracy.

ASTROBOI says:

Re: Re: Re:

Sorry, my bad; Austria!!! But still, any tax or levy in the US is considerably less than elswhere and according to the most knowlegeable source on Earth (Wikipedia) we have the following:

“17 U.S.C. ? 1008 bars copyright infringement action and 17 U.S.C. ? 1003 provides for a royalty of 2% of the initial transfer price for devices and 3% for media.[12] The royalty rate in 17 U.S.C. ? 1004 was established by the Fairness in Music Licensing Act of 1998. This only applies to CDs which are labeled and sold for music use; they do not apply to blank computer CDs, even though they can be (and often are) used to record or “burn” music from the computer to CD. The royalty also applies to stand-alone CD recorders, but not to CD burners used with computers. Most recently, portable satellite radio recording devices contribute to this royalty fund.[13]

Thanks to a precedent established in a 1998 lawsuit involving the Rio PMP300 player, most MP3 players are deemed “computer peripherals” and are not subject to a royalty of this type in the U.S.”

So buying from the US and importing would still be a workaround providing it isn’t forbidden or too expensive due to shipping or maybe custom duties.

Anonymous Coward says:

Re: Re: Re: Re:

Think custom and think KirtSaeng case. Both would burn you hard for respectively not paying the taxes and levies on an imported good and for importing without the consent of the original producer. The first one is a fact. The second one is a claim in a court.

Both would make it illegal to import it without paying the taxes and levies. Now, if we are talking personal use and therefore no reselling it would be legal, but it is hard to justify a trip to the states and back unless you have more things on the shopping list than just a few CD burners, 200 blank CDs etc.

Anonymous Coward says:

Let’s just ignore the fact that ‘the cloud’ has to be stored somewhere and that if hard drives have the levy that hardware has already had the levy assessed for it. This just seems like a scheme to get multiple levies for the same shit over and over and over. Also to drive up operations costs for any remote storage which they like because if they drive those costs up enough fixed media will look more attractive by comparison.

The Real Michael says:

Re: Re:

“Let’s just ignore the fact that ‘the cloud’ has to be stored somewhere and that if hard drives have the levy that hardware has already had the levy assessed for it. This just seems like a scheme to get multiple levies for the same shit over and over and over.”

Double-dipping — even triple-dipping — is nothing new to the content industries. Consolidating wealth from the bottom to the top is habitual behavior for the content industries. I wouldn’t be surprised if over half of our deficit was wrought by corporate subsidies.

Anonymous Coward says:

Re: So let me get this straight...

You are correct if only the levies were labeled as that. They are not. Only ones to label them as piracy-taxes are Mike Masnick and crew. In Europe they are justified by the european copyright exemptions making it legal to make a backup and making it legal to share with the close family. In reality they are completely wasted in administration.

out_of_the_blue says:

Yes, the innocent always pay for criminals.

It’s difficult to get pirates, who pride themselves on how much they rip off, who put great efforts into avoiding paying — to the extent of writing peer-to-peer apps, VPNs, The Onion Router, who are every day right HERE defending their theft and dodging practices — it’s DARN difficult to make them pay, Captain Obvious.

So what’s your point here?

Cory of PC (profile) says:

Re: Yes, the innocent always pay for criminals.

Blue… you’re an idiot.

Think for the moment that in order for these things to get online, how did they? Someone went out of their way to buy these things, made a digital copy, and then set it free onto the Internet for others to make copies of. These are the “pirates” you’re speaking of, and they do have the money! Not to mention for the likes of us who are at least a bit more logical than you are that download do return the favor by paying.

So, I’ll just keep on repeating: why should we take you seriously? You’re an idiot.

Zakida Paul says:

Re: Yes, the innocent always pay for criminals.

What’s your point, moron?

The only people who will be ‘punished’ by these levies are the legitimate users and providers. The ‘pirates’ will just avoid the levies by avoiding cloud services.

Do you see, now, why these levies are a bad idea or do you need a big purple dinosaur to explain it in a way 2 year olds can understand it?

Anonymous Coward says:

Re: Yes, the innocent always pay for criminals.

So you theory is that not only did pirates create The Onion Router (and the other technologies you sited), but they are also the only ones who use it?

So by you theory, the CIA, and other law enforcement agencies (just to make one sector) are pirates.

Guess its true that your type believe everyone is a pirate.

Anonymous Coward says:

Lets just admit it, the government thinks we’re all evil criminals, so lets rename our taxes to reflect that.

Taxes for military and defense related stuff for example can be renamed “You must be a terrorist” tax, why else do they need to spy on us? They didn’t get serious about thinking that way (In the US anyway) until after 9/11.

Anonymous Coward says:

I remember when I stayed in London I had to take the train everyday at lunch time, the master of the station was never there and I asked a lovely lady that was passing by what I should do she told me to just go thru, well I felt bad anyways and when I arrived at my destination I got to ask a security guard how would I pay for a ticket I didn’t had, he pointed me and I got on a long line just to pay that train ticket, funny though that same week at my station of origin I was stopped and asked for a return ticket, maybe I am just paranoid, well I like to do the right thing always.
The one thing I will never do however is give money to ASCAP, MPAA, RIAA, BPI or BSA supporters, I rather go to jail. So I pirate when I need something from those people and I don’t feel bad, specially when I see the jerks trying to get free money, without having to work for it as if they are entitled to it, never mind my abhorrence to granted monopolies.

Magnus says:

A small correction

Please note that the tax is not on hard drives, but on EXTERNAL hard drives. This is how it works in Sweden and Germany.

It’s obvious really: Anyone who buys a NAS (file server) with a pre-installed hard drive is a filthy thief. Someone like me, on the other hand, who buys the box and drive separately, and installs himself, is an upstanding citizen, who would not dream of ripping his entire DVD collection so he can watch it on his tablet.

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