'Piracy tax' on blank storage: Rights-holders want €36 extra on German mobiles

Germany's long running feud between rights-holders in the creative industries and hardware vendors has entered a new phase.

In the red corner: a number of bodies who collect revenues for Germany's publishing, music, art and photography industries that have formed the ZPUe (Zentralstelle für private Überspielungsrechte), who are pushing for a levy on blank storage media. In the blue corner: Bitkom (Bundesverband Informationswirtschaft, Telekommunikation und neue Medien or the Federal Association for Information Technology, Telecommunications and New Media) made up of technology vendors, who are opposing the duty.

The ZPUe this month asked for a levy of €7 to be placed on external hard disks of up to 1TB, and €9 for those of more than 1TB. The organisation is also demanding a duty of up to €36 per mobile phone and about €2 per USB stick, and wants all levies to apply retroactively from 2008.

The duties are necessary as such devices could potentially be used to store pirated content, the ZPUe says. The body has a duty to protect the rights of its members, and the levy on empty storage could be used to compensate rights-holders for revenues lost to piracy, according to the organisation.

Bitkom, however, believes the ZPUe's demands are exorbitant.

Very little space on hard disks is actually used to store pirated content, Bitkom says, citing research from the GfK Group.

According to GfK's research, 32 percent of Germans own an external hard disk and less than three percent of the average capacity is occupied by pirated content.

It's an argument that fails to cut any ice with ZPUe.

A spokesperson for organisation said that the market research actually strengthens the position of its members: "The German Federal Court of Law [Germany's top court] has recently ruled that it's the absolute number of pirated copies that is relevant, not the percentage of total capacity. The argument put forward by Bitkom is legally irrelevant." Three percent of an average hard disk would be 18 GB. "You can store a lot of pirated content on 18 GB."

It's not just the IT industry that have seen increased demands from the creative industries' associations: recently the music association GEMA, one of the members of ZPUe, has upped the price that restaurants and nightclubs have to pay between 400 and 2000 percent for playing recorded music. Many observers fear that this increase could effectively kill off the German party scene.

According to USB maker Transcend Information, the case is likely to be brought before the German patent office in an attempt to settle the two sides' differences peacefully. Should this approach fail, as now seems probable, a court battle lasting years could well follow.