German artists, authors want PC makers to pay up

From...

July 14, 2000
Web posted at: 8:43 a.m. EDT (1243 GMT)

by Rick Perera

BERLIN (IDG) -- A group representing German intellectual-property rights holders is demanding that PC manufacturers pay a fee of 41 marks (US$19.75) for each unit sold. GEMA, the German Authors' Rights Society, reasons that PCs can be used to duplicate copyrighted music and video, and hence that creators of intellectual property are entitled to compensation.

Digital technology has resulted in an increase in the amount of illegal, private duplication, said GEMA spokesman Hans-Herwig Geyer. "We see that the development of the computers is now responsible for the fact that these PCs are also instruments for private copying. That is why we now want this legal tariff also from the producers of PCs."

GEMA, which is acting on behalf of a consortium of royalty-collecting groups, is basing its argument on a system of fees already levied on recording devices in Germany. Since sound recorders are subject to a tariff of 2.50 marks, and video recorders to 18 marks, said Geyer, GEMA added the two and doubled the sum to come up with the figure of 41 marks.

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"This tariff is existing since 1985 (and) has to be heightening now; we see that the double amount is appropriate," he said. The issue will likely be decided in court, he added.

GEMA has sent a letter to all PC vendors requesting that they state how many units they have sold in Germany since January 1, 2000. The letter gives companies until August 2 to respond, Geyer said.

PC makers are weighing their options before deciding how to react, said Kathrin Bremer, aspokeswoman of the industry association BITKOM. Naturally vendors oppose the fee, but "I can't tell you the arguments in detail, because we're still discussing it in our group," she said.

The German legal situation is complicated by the European single market and the realities of Internet shopping. "Free market forces in the community take precedence," said Alistair Kelman, e-commerce counsel at Telepathic Industries, a London-based consulting company. "It would be perfectly legitimate for someone to buy one of these devices, for example in the United Kingdom, where you don't have this levy, and import it into Germany."

This puts vendors in Germany at a disadvantage. "Every importer or manufacturer who brings a device into the German market has to pay the charge," said Bremer. "But a private person doesn't have to pay it. It's a big problem for competition."

Kelman said ultimately European Union regulators will have to find a way to level the field. But they won't necessarily force Germany to drop its intellectual-property tariffs. He referred to a recent EU decision concerning the duration of authors' copyrights, which required other European countries to raise their standards to meet stiffer German ones. "What's going to happen is there's going to be extreme pressure on all the other European states to fall in line with Germany," he said.

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GEMA

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