French Court Supports iPod Tax

by Robin Pilgrim, LawAndTax-News.com

16 December 2008

The French Court of Cassation (the senior appeals court) has supported a French domestic retailer against a group of European retailers by overturning an appeal court ruling that non-French suppliers should not have to warn French buyers to pay a French 'iPod' levy on MP3 players bought across borders.

In future, any non-French company supplying an MP3 player to a French buyer will have to include the warning. The tax adds about EUR40 to the cost of the player, and the proceeds are distributed to the singers and composers of music downloaded on the Internet.

French retailer RueDuCommerce appealed the decision of the appeal court in favour of the group of suppliers from Germany, the UK, Luxembourg and France itself. The suppliers had wanted the case to go the European Court of Justice, but the French court didn't allow that.

French law says that consumers are required to pay the copyright levy when they import MP3 players, USB storage or blank media, something that is legal under EU law since the tax applies to French and foreign EU citizens alike.

In reality, the tax amounts to a tariff barrier, and flies in the face of the EU Single Market; but in any event it is a dead letter. When a French buyer has bought an MP3 player from Luxembourg at EUR40 cheaper than it could be bought in France, what are the chances that they are going to go to the trouble and expense of negating their efforts by paying the tax?

Perhaps there is a case for a copyright levy on blank media or MP3 players, and perhaps not, but the reality is that it will only work satisfactorily at an EU level - and this requires unanimity among the member states, something that seems unlikely in the foreseeable future.

Recommended