Fixed or portable, new or reconditioned, computers could soon cost more in France because the music industry would like to apply the private copying levy to them. A project that makes one cringe…
While the question of the private copying fee on refurbished smartphones and tablets is still not settled, computers could soon be taxed in turn. In fact, the tax initially applies to tablets, smartphones, hard drives and USB keys, which are devices with storage capacity, as recalled the official website. However, in 2022, the Court of Justice of the European Union established that copying a work in the cloud did indeed constitute a reproduction of the work. All that was needed to attract rights holders, who wish to add computers to the list of taxed devices – with millions of copies sold each year, this represents an enormous source of income. After pleading in this direction for several months, they finally obtained the launch of a usage study going in this direction, with a survey which must be carried out by the summer of 2024, as reported the Informed. Things are speeding up!
The purpose of this survey is to find out whether consumers use their computers to make copies of protected works, such as films or music. If this is the case, the private copying commission could vote for a levy on computers, which would tax PCs running Windows, but also Macs and computers running Linux, whether desktop or portable, new or reconditioned. Note that the commission plans to integrate into the calculation the exchanges of files copied from CDs on the cloud. To put it simply, if services like Google Drive, Dropbox or iCloud are used to copy and share copyrighted works between friends and family, then the computers used to access these services should be taxed.
Very bad news for consumers, while the evaluation methods, considered obsolete, opaque and unfair, are strongly criticized, as evidenced by the report of the General Inspectorate of Finance (IGF) and the Inspectorate of Cultural Affairs ( IGAC) last October, which recommends re-evaluating the methods of evaluating uses – the way in which we determine the way and frequency in which we create copies of cultural works – given that the latest update of the scale is based based on a 2017 evaluation. The sample size of these studies, considered too small, and the complexity of the questions asked are also criticized. On average, the private copying fee brings in 300 million euros per year to rights holders. A sum which should increase in the coming years to approach 400 million euros.
Refurbished smartphones: still taxed by remuneration for private copying
To fully understand what this involves, you must have a clear understanding of what remuneration for private copying is. Each time you buy a smartphone, a tablet or any other electronic device containing storage memory, you pay a small special tax, in addition to other classics such as VAT: the famous RCP, or remuneration for private copying. Intended for creators, producers and rights holders of artistic works, it compensates for losses due private copies authorized by law. One of the many “catch-ups” is that it applies to both new devices and refurbished products – with a different scale. And it is the application of this double “royalty” which has raised eyebrows among repackaging professionals and consumer associations since its entry into force at the end of 2021. Because it is not trivial: the “bis” RCP in fact represents 10.08 euros – VAT included – on the final price of a refurbished smartphone with 64 GB of storage, for example. And that’s without taking into account the RCP – 14 euros in our example – already taken from the price of the new product! A form of “double punishment” for the consumers concerned, who are increasingly trying to make these expensive products last… This is why the UFC-Que-Choisir and the repackagers have vehemently contested this measure since its application, deeming it totally absurd, especially since the law is also supposed to reduce the environmental footprint of digital technology in France!
As a reminder, remuneration for private copying was introduced in France in 1985 to charge those who purchase storage devices – including devices incorporating permanent storage, such as computers or smartphones – for their right to make copies of cultural works for their personal use. For example, the user can extract music tracks from a CD and convert them into MP3 to listen to them on their smartphone, portable music player or car radio. This fee takes the form of a fixed fee, determined by a scale based on the storage capacity of the device – and not its selling price. Initially, this levy applied to blank cassettes, CDs and DVDs, but then expanded to all devices that can store data to protect copyrights and rights holders. Today, new computers, hard drives, USB keys, tablets and smartphones are all subject to this tax depending on their storage capacity. In November 2021, it was also extended to refurbished devices, and a new scale was put in place. Suffice to say that this has not been very well received, neither by repackagers – who consider it too high and cannot make a margin – nor by ecological associations – because it does not reduce the environmental footprint digital in France, on the contrary. Indeed, to achieve a margin, reconditioners – and we are not talking here about giants like Black Market, which only serve as intermediaries – are obliged to increase the price of the packaged device to compensate for the fee. In the end, it ends up being passed on to the final buyer: the consumer.
The rights holders, for their part, are far from complaining, on the contrary, since the tax for private copying brought them 172 million euros in 2019 just for the smartphone. The problem is that uses have changed. From now on, the consumption of cultural works on this medium is mainly done via legal and, most often, paid streaming platforms. Therefore, the user does not own the content, he only pays for the right to listen to it. And if he downloads them so he can listen to them without needing an Internet connection, everything is automatically deleted once the subscription is canceled. In addition, the platforms have already paid the rights holders to be able to distribute their content. A shame! And it’s even more unfair for a refurbished device given that the fee is applied once upon the initial purchase, then is applied each time the device passes into the hands of a new user. Without forgetting that increasing the prices of reconditioned products means taking the risk of discouraging them from turning to this offer, which is much more ecological – the vast majority of greenhouse gases from a device are produced during of its manufacture, and its end of life generates electronic waste. Faced with these problems, a public rapporteur from the Council of State had therefore “recommended the cancellation of the scale for reconditioned phones and tablets“, as reported by l’Informed End of november.
Private copying tax: cancellation temporarily canceled
It was with great relief that we learned, at the end of December, that the “royalty” for private copying on refurbished smartphones had been canceled by the Council of State, which had finally decided to follow the recommendations of the public rapporteur , as reported by the media The Informed. Indeed, it was hotly contested since its payment “allows” owners of storage devices of all types (smartphones, tablets, hard drives, etc.) to copy the content of a CD or DVD. However, this practice has become obsolete with the advent of streaming. In addition, it applies several times for reconditioned devices – at each sale/reconditioning – which does not encourage the consumer to move towards this market, and therefore to reduce their carbon footprint. However, the victory was only half-hearted since the remuneration for private copying had been removed not because of its absurdity, but because of a formal defect. Indeed, the commission responsible for applying the scales was incomplete during its vote last year, notably with the absence of consumer representatives.
This deletion was to take effect on 1er February 2023, which should lower the price of refurbished devices by a few euros. However, it was noted that consumers who had purchased a reconditioned smartphone during this period would not be reimbursed for the price of the tax, since the cancellation would not have had retroactive effect – a way of avoiding too much numerous disputes with the company Copie France. A sum which was still around 20 million euros, and this only for reconditioned phones! No wonder they don’t want to give it up!
Private copy tax: refurbished devices are still not exempt
But the celebration was very short-lived for sellers of reconditioned devices and consumers! Indeed, the cancellation of the “royalty” for private copying on refurbished smartphones, which had been decreed at the end of December by the Council of State, had in turn been canceled at the beginning of January, as reported again by the media The Informed. As this cancellation was pronounced due to a formal defect, several members of the commission in charge of the scales being absent during the vote which allowed the addition of reconditioned smartphones to the devices subject to the fee, Copie France, the organization whose mission is to collect revenue from this fee, had permission to try to find a solution until the cancellation becomes effective, that is to say until 1er February 2023. And that’s exactly what she did. The commission was therefore to meet a little later with the twelve representatives of the cultural industry, six consumer representatives and six representatives of equipment manufacturers and importers, in order to determine the new scale, as should have been done initially. This one, which the Informed One had obtained, is strictly identical to the previous one. If it were to be validated, the fee would therefore still have been €8.40 excluding VAT for a reconditioned phone of more than 64 GB, compared to €14 excluding VAT for a new model. For a reconditioned tablet, it would then have been €9.10 excluding tax.
Smartphones and tablets will therefore be the subject of a new study financed by rights holders in order to reassess the current tax. The French Telecom Federation (FFT) had proposed installing software on the smartphones of 2,000 users – with their agreement, of course – to assess the volume of private copies of works passing through their devices, but the proposal was rejected. refused by the rights holders, judging the proposal intrusive and harmful to existing studies. In short, the problem is far from being resolved!