Judges confirm tax on digital music players

Music fans face higher prices for their iPods Keystone

Consumers in Switzerland will have to pay a tax on popular digital music devices such as iPods and MP3 players in addition to some types of audio/video recorders.

The Federal Court rejected complaints by consumer and user groups which had described new tariffs for authors’ rights as too high or too low.

A court statement on Wednesday said the federal arbitration commission was justified in introducing the new tax in response to a request by a group of collecting societies including Suisa, the organisation responsible for administering music rights.

The one-off tax is likely to come into force in September. The rates – valid for 22 months – vary from SFr30-90 ($25-75), according to estimates by consumer groups.

The tax will affect digital music players with flash memory (MP3), hard drive-based music players (iPods) and audio/video recorders with a built-in hard drive.

Initially the tariffs were to be effective from March 2006, but they were delayed by the complaints.

“Shut up and pay”

The four main consumer protection groups expressed their disappointment over the court decision.

They said it was unacceptable for the supreme court to refuse to accept them as legitimate representatives of the consumer community. The ruling meant simply “shut up and pay”, a joint statement said.

The decision opens the door for a tax on all kinds of other equipment including computers and telephones, according to Andreas Tschöpe of the consumer protection foundation, SKS.

Fabiola Monigatti of the Consumer Forum argued that teenagers and adults, not the manufacturers, had to pay the price for the ruling by the country’s highest judges.

Raw deal

The Association for Information, Communications and Organization Technology (Swico), which includes Apple, Sony and IBM, said it was disappointed that the court had refused to examine the complaint.

Swico had argued that the tariffs were “astronomically high” and differed too much between the various types of audio and video equipment.

It said Swiss consumers would get a raw deal and effectively be hit three times for authors’ rights. On top of the new levy they pay a tax for downloading music from the internet and another one when they buy a blank CD.

However, Suisa and other associations responsible for administering authors’ rights said the court decision allowed them to continue a system which they consider fair for consumers and artists.

The ruling was in line with international regulations and meant that it remains legal to make a private copy of an audio or video element.

swissinfo with agencies

Key facts

The first “blank tape levy” on audio and videocassettes came into force in Switzerland in 1993.
A similar tax was imposed on blank CDs and DVDs in 2002.
A federal arbitration commission and the federal price regulator supervise the tariffs.
Suisa collected SFr112 million in 2004 from licensing and authors’ rights.

In brief

Introduction of the tax follows a request by Suisa and other organisations responsible for administering authors’ rights.

Negotiations with the authorities were launched six years ago and the tax was due to take effect in March last year. However, a series of complaints lodged at the Federal Court delayed implementation until August 2007.

Moves are underway in parliament to amend the copyright law. The aim is to improve protection of authors’ rights on private copies of CDs and DVDs.