Apple sentenced to cough up €5m for iPad 'private copy tax'

The district court of Paris just sentenced Apple to pay €5m as compensation for private copies of media made using its iPad in 2011.

The iPad 2, one of the devices that would have been liable to the disputed private copy tax.
The iPad 2, one of the devices that would have been liable to the private copy tax. Image: CNET

The showdown started in January last year, when Apple decided to take issue with the amount of tax it had to pay on iPad sales to compensate for private copies of music, films and the like made with the device.

In France, all electronic devices that can be used to store and copy "cultural works" are subject to the levy — known as a fair use tax. The amount of tax attached to each device depends on its storage capabilities, and it's collected at source by hardware manufacturers and then paid to right holders' union Copie France.

Apple collected the tax on its iPad sales throughout 2011 — up to €14 on an iPad 2 with 64GB of storage — but didn't give it to the union. According to the French newspaper Les Echos, the company is thought to have collected as much as €4.74m of fair-use tax for that year, which it did not pass on.

Apple had filed a case disputing the size of the levy on tablets, hoping to get France's Council of State to cancel it altogether. The size of the levy was meant to be set temporarily — lasting from January to December 2011 — while Copie France conducted a study into how tablets are used in order to set the tax level. It's carried out similar studies as for other electronic devices, though its research has been regularly criticized by consumers and manufacturers.

It's been argued for example that the tax doesn't take into account business use of electronic devices — it's thought enterprise hardware isn’t likely to be used for making private copies of media. Now workers can now ask for the tax they paid when buying their hardware to be reimbursed; however, such reimbursements are hardly ever requested, as most retailers don't explicitly highlight the tax on receipts.

New levels of fair use tax were set back in December 2012, and are once again being queried by consumers unions and manufacturers. 

However, the district court of Paris last week ruled that the amount of tax Apple had to cough up for iPad sales in 2011 is still enforceable until Council of State ruled otherwise, according to the French rights owners association Sacem. Consequently, Apple now had to pay Copie France €5m.

It's not known yet when the Council of State will give its ruling on the issue.


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