Discover the astronomical payments of €300 million a year to rights holders for 'private copying': a revealing investigation!

The private copy levy in France

In 1985, France introduced a levy on blank media such as cassettes and CDs to compensate rightsholders for copies of their works made for private use. Today, the main source of revenue is smartphones; a levy of around 17 euros per sale results in an annual payment to rightsholders of around 300 million euros. With the explosion of streaming and a system that has remained unchanged for a decade, described as "dysfunctional" by some critics, the levy is now under renewed scrutiny.

The beginnings of the licence fee

When tape recorders, VCRs and similar devices became increasingly popular, entertainment companies whose business model was based on buying copies faced uncertainty.

The fear of consumer copying was illustrated by the now famous words of Jack Valenti of the MPAA: "The VCR is to the American movie producer what the Boston strangler is to the woman who stays home alone," said Valenti.

In hindsight, the VCR was more beneficial than disabling, but private copying at home was seen as a major threat, with few means of control and sanction.

The private copy levy in France

Valenti's 1982 declaration reached a wide audience, but its essence was not new. The potential of blank media to harm the creative industries prompted Germany to introduce a levy in 1966, replacing the exclusive right of reproduction with a right to equitable remuneration.

In 1985, France introduced "remuneration for private copying" to ensure that rights holders were compensated for the harm caused by private copying of their works. A levy was applied to sales of blank media such as cassettes, but with advances in technology, the levy was extended to CDs and other recordable media.

Today, smartphones are the main source of revenue for private copy, generating around 300 million euros a year for rights holders.

The start of the reviews

While an annual increase of 300 million euros is good news for beneficiaries, some feel that the levy system is outdated and unnecessarily opaque. Given that the price of a cell phone of 64 GB or more is increased by around 17 euros, whether or not copies are made on the device, some have also described the levy as anti-consumer.

Remuneration is paid to rightsholders via Copie France, at rates decided by a committee made up of rightsholders, recording media manufacturers and consumers.

A French government report on private copy levies published in October 2022 proposes several improvements. The report points out that rights holders themselves provide usage statistics, using decade-old methods, and that calculation methods need to be transparently updated to reflect the reality of private copying today, in a market dominated by streaming.

A French politician's response to the government report

A report by L'Informe published on Monday reveals the proposals put forward by MP Philippe Latombe in response to the government's report.

Latombe's first proposal is to entrust the government with decisions concerning the amount of the royalty applied to each medium.

"In the same way as the Finance Act or the Social Security Financing Act, parliamentarians must be decision-makers and accountable to our fellow citizens", explains the politician.

Latombe does not propose the abolition of the current committee (Commission de la copie privée), but believes its role should be to propose rates to parliament. L'Informe notes that the committee would also be prevented from launching usage studies carried out by private companies at the expense of the levy fund. This work should instead be entrusted to the telecoms regulator, Arcom.

People are paying fees when they shouldn't be, devices shouldn't be charged twice

The MP also criticizes the current system whereby the levy is collected on smartphones and tablets at the time of import, forcing professional end-buyers not subject to the levy to initiate proceedings to try and recover the excess. Overpayments are currently estimated at between 40 and 50 million euros, so a simpler process and faster refunds are called for.

Latombe's third proposal is to exempt smartphones and tablets reconditioned in France, currently subject to a fee of 10 euros per unit. This would not only promote the use of the recycling market, protect the environment and create jobs, but also ensure that devices remain accessible to the socially disadvantaged.