Thursday, July 28, 2005

Top court refuses to hear appeal on MP3 players

Top court refuses to hear appeal on MP3 players


The fight over a levy on IPods and other digital music players ended today when the Supreme Court of Canada refused to hear any further arguments on the matter.

That means there will be no levy applied to digital audio recorders such as Apple's popular IPod and IPod Shuffle as well as other MP3 players like IRiver.

"Obviously we're disappointed. We felt it was self-evident that those products are sold for the purpose of copying music," said David Basskin, of the Canadian Private Copying Collective (CPCC), the non-profit agency which collects tariffs on behalf of musicians and record companies.

The group had wanted the high court to overturn last year's Federal Court of Appeal decision which quashed the levy on the popular gadgets.

The non-profit agency had been collecting the tariff — $2 for non-removable memory capacity of up to one GB, $15 for one to 10 GBs, $25 for more than 10 GB — since December 2003 through a tax built into the price of the devices.

It stopped in December 2004 when the Federal Court overturned the policy at the urging of the Canadian Coalition for Fair Digital Access, a group which represents retailers and manufacturers such as Future Shop, Wal-Mart Canada, Apple Canada, Sony Canada, and Dell Computer Corporation of Canada.

The CPCC, which collects levies on blank media such as CDs, argued that since the new technology opened yet another avenue to make illegal copies of songs, a levy should be collected on behalf of music creators.

But the Digital Access group argues otherwise. It calls Canada's levy system unfair and "a longstanding problem."

"People are forced to pay whether or not they use the media for music," said spokesman Fraser Smith, from the group's Ottawa offices. "A lot of people, including small businesses, use it to back data files and photos. That's a huge problem."

He added with the growing popularity of legal downloading websites such as ITunes and Puretracks, consumers are paying twice — once for the song and a second time when they burn it to CD to listen to it.

He added that the private copying levies were introduced in an analogue era and need to be re-examined.

"It was made for blank audio cassette tapes," said Fraser.

Approximately $4 million was collected from sales of digital audio recorders between December 2003 and December 2004.

The money is sitting in an account and will be returned to the importers and manufacturers of the products. There's no word yet on whether consumers who paid the hidden tariff will be reimbursed, said Smith.

In addition to fighting against the MP3 player levy, the Canadian Coalition for Fair Digital Access asked the Supreme Court to re-examine the validity of the private copying act which permits the CPCC to collect tariffs.

The court rejected the motion meaning the law remains constitutional and the CPCC can continue collecting levies on behalf of performers, songwriters, music producers and record companies.

However, the Department of Heritage has promised to re-evaluate the validity of the controversial levy system this fall.

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