By Emmanuel Legrand
The French creative sector is facing the prospect of losing a significant source of revenues from private copying if a new legislation, currently discussed in Parliament, redefines which devices are eligible for the remuneration for private copying.
Until now, all devices with memory such as desktops, laptops, USB sticks or mobile phones were subject to paying a private copying remuneration that benefits rights holders whose works can be copied.
However, a new bill – due to be discussed by the Parliament on June 10 – aimed at reducing the environmental footprint of digital technology in France contains a provision that would exclude refurbished devices such as smartphones or computers from the scope of the private copying levy.
Exempting reconditioned media from the levy
"Reconditioned digital equipment will not be subject to payment of the remuneration for private copying, when this equipment has already given rise to such remuneration," reads the bill.
In addition, an amendment from Member of Parliament Éric Bothorel, calling for a report on the functioning and impact of the private copying levy, was adopted by the Commission for Sustainable Development and Regional Planning.
Bothorel said the report should focus on the "regular expansion of the base" for the levy, and on the "lack of transparency in the functioning of the commission for the remuneration of private copying," which sets the rates applicable to copying devices.
A disaster for the cultural sector
Bruno Lion (pictured, below), Chairman of the Board of rights society SACEM, and MD of peermusic France, wrote in an opinion piece on LinkedIn that if this proposal (article 14 Bis B) was voted by the National Assembly on June 10, it would be "a disaster for the financing of cultural sector, seriously weakened by the [Covid-19] crisis."
Lion lamented that "on the erroneous pretext of supporting sustainable development, a handful of parliamentarians intend to destroy one of the fairest, most virtuous and most effective mechanisms in our cultural ecosystem."
The amendment excluding refurbished devices from the scope of the levy drew the ire of the creative sector, which benefits from the proceeds of the remuneration. According to Next>Impact, some €273 million were collected in 2020 from private copying, up from €260m in 2019, by Copie France, the umbrella organisation that collects the royalties on behalf of rights owners. An estimated €30m could be lost if the law is voted, according to Copie France.
Detrimental to cultural diversity
For Bruno Boutleux (pictured, below), CEO of artists' neighbouring rights society ADAMI and Chairman of the Board of Directors of Copie France, the ecological transition "cannot be done to the detriment of our cultural diversity ... and in favour of a flourishing market, whose devices are created in the United States, recycled in Europe with components from China and sold throughout the world."
Minister of culture Roselyne Bachelot said onTwitter that private copying was "crucial and makes it possible to remunerate creators, but also to strongly support cultural activities in our territories." She added that "encouraging the purchase of reconditioned products cannot come at the expense of culture!"
Some 1,700 artists – musicians, filmmakers, actors, visual artists – have signed a petition published inLe Journal du Dimanche, in which they a call to no longer oppose ecology and cultural exception. "As cultural life in France begins to pick up again, we have to face another battle that would oppose ecology to culture," reads the petition.
A virtuous mechanism
It states that since 1985, France has allowed the public to copy freely for private purposes, but in return for the private copying of their works, achieved largely through digital media (phones, tablets, external hard drives, etc.), artists and the creative world receive remuneration from the sale of these items, as they contribute to the levy.
"This virtuous mechanism has since been adopted by 25 of the 27 Member States of the European Union," reads to op-ed, noting that 200,000 authors, writers, filmmakers, visual artists, photographers, screenwriters, author-directors, playwrights and music composers benefit from this system.
However, "the sellers of refurbished products refuse to contribute to this virtuous system. Their argument is to say: 'We are for ecology, we promote the circular economy, we cannot also respect European rules on copyright by participating in the financing of the cultural life of our country.' You have to choose: ecology or culture."
A pillar in the financing of culture
The signatories accept that the whole economy of music is destined to become green, but "creating this exception for a sector of activity that is destined to become the norm is ultimately to condemn one of the pillars of the financing of our cultural exception. Let’s not oppose the 200,000 recipients of private copying remuneration against buyers of refurbished products."
The opinion piece names Back Market, described as "the overwhelming leader in France in the sale of refurbished electronic products," with a 85% market share, as the main promoter of the amendment.
It concludes: "We will not allow one of the pillars of funding our work to be destroyed so that the major digital platforms accumulate more billions to the detriment of the greatest number."
Dispel disinformation in the media
Signatories include singers (Abd Al Malik, Angelique Kidjo, Julien Clerc), actors and actresses (Nathalie Baye, SandrineBonnaire, François Cluzet, Dany Boon), visual artists (Daniel Buren, Hervé Di Rosa), composers (Alexandre Desplat), electronic music artists (Jean-Michel Jarre, DJ Snake), and filmmakers (Michel Hazanavicius, Agnès Jaoui), among others.
French music publishers' association CSDEM said it was "extremely mobilised" concerning the remuneration for private copying. "Much disinformation is circulating on this subject while the text voted as it is in the National Assembly would result in a loss of €30 million for creation and creators," said the organisation.
Copie France has published a fact list in an attempt to dispel what it called "untruths" that were spread in the media.
> It is not a tax:
The remuneration for private copying is a trade-out for the right to freely duplicate protected works (films, music, photos, books, etc.), acquired legally, for personal use. In return, explained Copie France, authors, artists and producers of these works "receive remuneration which compensates for the financial loss resulting from the massive and free use of their works."
The scheme is in place in most EU countries and "benefits both consumers of cultural goods, creators, artists and artistic creation professionals and always brings more value to smartphones, tablets and storage devices that would have less interest without the possibility of storing our content there."
Reconditioned devices are used in the same way as new devices, in terms of storage and duplication of works. "It is therefore legitimate that this compensatory remuneration applies to each user of a device, whether new or refurbished," explained Copie France.
> The remuneration is not prohibitive.
According to the organisation, the remuneration for private copying represents only 3 to 4% of the price of a refurbished telephone, sold on average 332 euros. (It is of 1,43% of the wholesale price of an iPhone 11 with a 256 Go memory). This amount is "not likely to disrupt the market for reconditioned media, although it is an important issue for the financing of culture."
> Refurbished phones are not green nor will they benefit France's job market.
Copie France noted that reconditioned media come mainly from the United States, are recycled in Europe with components from China and are then resold around the world. "A private copying fee exemption would only benefit re-sellers, who are mainly large Internet players and not recyclers," said the organisation.
[Analysis:
The French private copying scheme, which has been in place since the mid-1980s, is one of the cornerstones of the funding of France's creative sectors.
It benefits all creative repertoires directly through the royalties paid to rights owners, and indirectly through a provision in the law that makes it mandatory to spend 25% of the proceeds from the private copying levy in projects of general interest. Last year some 10,000 projects were supported via the private copying scheme.
The levy's purpose is to compensate from the potential loss of revenues for the private copying of creative works. It's a trade out.
Since its inception, manufacturers and importers of devices that can be used for copying content have been objecting to the law, and tried to lower the royalty rate, if not tried to get rid of the scheme altogether.
In France, the rates are set by a commission which regroups rights holders on one side and the manufacturers and importers of copying media. The argue, they make proposals and counter-proposals and in the end, a judge rules on the rates. It is a robust buyer-seller discussion within the framework of the law.
The attempts from "refurbishers" of smartphones, and namely the very well funded market leader Back Market, to sneak through the back door of a law on environmental issues an amendment making refurbished smartphone exempted from the levy was smart.
Who does not want to be green, right? Except that a reset phone still has its fully functioning copying capacity and the fact that it has already paid the levy once does not shield it from the fact that it has been fully reset for usage, and can be considered as a new device from the perspective of private copying.
For the creative sector, €30 million are at stake. And there is a risk that once the door is opened to review private copying law, manufacturers of devices will try to push their luck further. For the French creative industry, the worst case scenario would be a Spanish situation where the government, years ago, decided to limits the scope of the remuneration, wiping out €120 million of yearly revenues in one go.
Fortunately, at the moment, the French government does not seem to side with the authors of the amendment and strongly backs the remuneration for private copying.
Incidentally, like in Germany with the transposition of the Copyright Directive, in the UK with the #FixStreaming campaign, artists and creators have made their voices heard in France. They are an essential part in the discussion about what the digital eco-system will be for the creative sector.
And they no longer remain silent. That, in itself, is a positive evolution.
Emmanuel Legrand]
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