At the end of September 2004, the Swiss copyright societies SUISA, SUISSIMAGE, SSA, ProLitteris and Swissperform presented their tariff proposal for a levy on digital recording devices equipped with a hard disk or memory chip to the Federal Arbitration Commission for authors' and performers' rights.
Before presenting their proposal to the Federal Arbitration Commission, the societies held negotiations with the federation representing the makers and importers of such devices. Since the negotiations produced no results, it is now for the Federal Arbitration Commission to decide on such a tariff. The Commission is expected to do so towards the end of March this year.
The copyright societies are proposing a levy of Frs. 1.04 per gigabyte (GB) of storing capacity on audio recorders (e.g. iPod), and of Frs 1.27 p. GB for audiovideo recording devices (e.g. digital set-top boxes with hard drive or hard drive video recorders). The levy proposed for audio memory devices with microchip is Frs 0.12 per megabyte. These fees apply to recording devices that are designed for storing music or films. PC hard drives and external hard drives are not affected.
Such levies already exist in most European countries. Switzerland is not alone. In Germany, the levy on audio devices with built-in hard drives is ? 2,65: for audio video devices, the levy is ? 12.- regardless of storage capacity. In France, the levy on audio devices is of ? 15.- pro 20 GB capacity, and for audiovisual devices, of ? 15.- pro 40 GB capacity. In Austria, a ? 20.- levy is charged on audio devices with over 20 GB storage capacity.
The copyright societies' proposal is based on Articles 19 and 20 of the current Copyright Law which authorise copying for private use but require makers or importers of blank supports to pay a fee.
The amount of the levy will be decided before the Federal Arbitration Commission. The proposed capacity-based tarification system is just one of several possibilities. The levy could also vary with the end sales price.
Makers and importers of blank cassettes and recording devices like the iPod earn on the sale of the hardware components which allow consumers to play music and films anywhere at any time. The legislative took the view that the composer or filmmaker should not be left empty-handed. Copyright law's very raison d'κtre is to protect creators and guarantee them a fair remuneration for the use of their works. The iPod boom should not just profit the electronics industry, it should also profit composers.
An argument regularly invoked is that if a blank carrier levy were to be charged on mp3 and hard disc recorders, consumers would be paying double since they also pay a fee for downloading the music from the internet. That is not true.
Video recorders with hard drives replace conventional video recording devices which are not used to record downloaded content but to record broadcasts that consumers receive for free via cable or satellite.
Surveys show that in the case of audio recorders, only 1% of downloaded content comes from a legal source where a fee has been duly paid. In Switzerland, music cannot yet be downloaded from iTunes, the Apple online shop. Accordingly, no remuneration has been paid for any music files downloaded on iPods here. The music files come from online file-sharing sites or from CDs.
Even if the consumer had actually paid to download a song, recording that song on his portable player with a hard drive or memory chip (e.g. iPod) constitutes an additional use. Online providers of music titles are only licensed to offer the titles for streaming or downloading; they are not entitled to authorise private consumers to make copies. Copyright Law itself authorises private individuals to make copies of protected works under the proviso, however, that the makers or importers of the blank carriers used for copying those works pay a fee. The advantage of this system of indirect remuneration is that the private copies do not have to be checked and the private sphere is therefore preserved from any obtrusive interference from the content provider.