Copyright levies

Copyright levies on recording equipment or blank media exist in many countries to compensate copyright holders for the effects of private copying.In 1965, Germany was the first country to introduce a private copying levy on sound and video recording equipment, following two decisions by the German Federal Supreme Court.The German collecting society GEMA had 'asked the Supreme Court to order that producers of recording equipment be obligated, upon delivery of such recording equipment to wholesalers or retailers, to request from the latter that they communicate the identity of the purchasers to the GEMA' (Hugenholtz et al., 2003, p. 11).The court ruled that this would be a violation of privacy in conflict with the German Constitution.Subsequently, a levy was introduced to compensate copyright holders for the supposedly detrimental effects of copyright infringement using tape recorders.In the ensuing decades, many countries followed suit and levies were introduced on a variety of recording or copying devices and blank media.At the present day, most countries within the European Union have copyright levies, as well as the United States, Canada, Russia and several countries in Latin America and Africa.In Asia, Japan is the only country with copyright levies (WIPO, 2012, p. 3).The general idea behind copyright levies is the following.Consumers often make copies for personal use of copyright protected material such as music, films, tv-shows, or books.For instance, they copy a CD to play it in their car or vacation home or to give it to a friend.Or they record a television show to watch it another time.Under strict application of copyright laws, these acts of reproduction would be an infringement.However, strict enforcement in these circumstances would be both too costly and too intrusive vis--vis rights of privacy and freedom of expression.Hence, legislators in many jurisdictions have introduced exceptions, which allow various forms of private copying, provided a levy is paid.This levy aims to compensate copyright holders for harm caused by the reduced sales or licensing opportunities as a result of private copying.Levies are collected by a collecting society or some general office and redistributed amongst copyright holders.This chapter deals with the law and economics of copyright levies.It first discusses the legal framework for private copying, focussing on the European Union, where the bulk of copyright levies are collected.Second, it presents data on the heights of levies and the amount collected in various countries.Third, this chapter analyses the economics of copyright levies.Fourth, it briefly discusses proposals to extend copyright levies to cover unauthorised file sharing over the internet. Legal background in the US and the EUIn the United States, home video recording was ruled to be non-infringing under the fair use doctrine by the Supreme Court in 1984.Eight years later, in 1992, the Audio Home Recording Act (AHRA) was adopted, which imposed a levy on equipment and media primarily designed to make digital copies of music for personal use (Netanel, 2003).Levies are set by the AHRA at 2 or 3% of the price of devices and media, up to a maximum of $ 12 (WIPO, 2012).Since the introduction of the AHRA, however,

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