System of Private Copying: Is it a Matter of Price or Matter of Freedom?

24 February 2006

The subject of piracy has gained on prominence with the start, twenty days or so ago, of the first phase of screening of the legislation that regulates the protection of intellectual property and copyrights in Croatia, under the negotiations for Croatian membership into the European Union.

Last week, Vjesnik daily published an article which estimated that the �black piracy� may have reached 50 percent level of the music market in the country. Vjesnik quotes Marina Feric from ZAMP (expert office of the Croatian Composers� Association charged with protection of music copyrights) who says that the so-called �gray piracy�s� share on the market is another big problem. �Gray piracy� covers those people that engage in unauthorize use of musical works without compensation for the authors � people who download, copy or burn music, films, etc. on CDs and other media.

Few months ago, ZAMP prepared a proposal to end gray piracy through an instrument called Private Copying System, which would obligate the manufacturers and importers of audio and video, as well as data recording and storage equipment to pay a fee to ZAMP, as compensation for damages caused by illegal recording of music and video through such equipment.

This type of regulation was introduced in several, not all EU countries, but it did find its place in the Croatian Law on Copyright and Associated Rights and the EU Copyright Directive. According to Vjesnik, the Private Copying System was already discussed during the screening phase and Croatia could become one of the first non-EU countries to introduce this system.

Having in mind that the proposed compensation is certain to result in a price hike of digital media and equipment and reduce the demand with the consumers, it should be presumed that the producers and importers will insist that it is set at the lowest possible level and will invest all forms of pressure available to them to that effect. Therefore, it comes as no surprise that the Ministry of Economy felt obliged to react very strongly to the ZAMP proposal, claiming that the compensation will create additional burder on the entrepreneurs and consumers in Croatia. The problem, however, is much deeper.

First of all, digital media are used for many purposes other than storage of film and music. The majority of users uses their computers, CDs, DVDs, memory cards, etc. to store their own data such as photographs and texts, which present no danger and cause no damage to the authors that prohibit copying of their works.

Also, in Croatia and the world there is an increasing amount of produced content that are not prohibited from copying and distribution by the authors, i.e. the authors don�t think they are damaged by the fact that somebody reproduces their contents without control or authorization. To the contrary, they do promote such activities through Creative Commons and GNU GPL licenses. It is free software and free cultural and scientific contents.

It is possible today to have a personal computers with operative system, software solutions and other contents fully free from restrictions the violation of which the proposed Private Copying System attempts to remedy and compensate.

It turns out, paradoxically, that even those that chose to eliminate restrictions on their works and make them part of the public domain � which is the basis of their comparative advantage in the marketplace � will find their market position endangered by regulation which is adopted in favour of those who restrict access to their ideas and consider them an exclusive private property.

The fact that this obviously unjust policy results from the demands presented by the European Union significantly reduces the chances for the public debate on the issue to include any other aspect than the meer negotiation on the actual amount that will have to be paid.