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14.5.2012 Cassette levy system will endanger jobs and content production

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Cassette levy system will endanger jobs and content production

The Federation of Finnish Technology industries dismisses the proposal of one-man-committee Markus Leikola for the significant expansion of the present levy system. The model presented is thoroughly unsuited to the modern digital world. If implemented, it would lead to the transfer of Finnish jobs and tax revenue abroad. Fee collection and rigidities are not the way to create new opportunities for content production and the content business and the device trade in an international environment.


Markus Leikola, the one-man-committee named by the Ministry of Education and Culture, proposes a significant expansion of the levy system, with the result that in future a levy will be charged on electronic devices and storage platforms, cloud content and storage services and digital content and services. The levy system would henceforth encompass the likes of new computers, tablets, printers, cloud and content services, talking books and audio and video recordings. The inclusion of mobile phones, and traditional books and newspapers is also being considered. 


The Federation of Finnish Technology Industries considers the proposal a failure. This kind of shocking expansion is completely mercenary, and the reform will raise the burden of the Finnish levy system to among the highest in Europe.


“The proposed system is not suited to digital markets, nor is it in line with Finnish and EU aims for digital internal markets”, stresses Federation Senior Legal Advisor Michaela Ramm-Schmidt.
According to her, the model would create considerable obstacles to Finnish content production, the content business and the trade in devices, and it would lead to the transfer of Finnish jobs and tax revenue abroad. Before long, domestic content would wither and the use of foreign content would increase. An expanded system would also be unreasonably expensive, as it would create significant administrative costs for all parties.


"The proposed broad levy system would also send the wrong signal to consumers that, because of the levy, illegal content could be freely used” continued Ms Ramm-Schmidt.


Simple and cheap


According to Juha Saarnio, The Federation’s Head of Innovations Networks, the cassette levy system should be replaced with a simple collection method that would not interfere with the operation and development of the market or impose unreasonable costs on anyone. “Artists are entitled to due compensation, but the sum should reflect the real loss caused by private copying. The goal should be to move to pure licensing, where the market dictates the transmission of content from the artist to the consumer”, demanded Mr Saarnio. “By moving to licensing, the value of European content production will stay in Europe and not, which is now the case, fall into the pockets of US players”, he continued


By replacing the device based levy system with a simple collection model, it will be possible to better benefit from the advantages of the digital world, which will result in lower content prices for consumers and greater compensation for artists.


Mr Leikolas model would further increase the multiplicity of fees paid by consumers if a levy were paid on digital content-services and content, in addition to devices.

"The attachment of a levy to the sale of digital content and such a broad range of devices would lead to an increase in the collection of fees, although private copying is decreasing as the market develops”, commented Ms Ramm-Schmidt.

The removal of the cassette levy system would also return the trade in devices to Finland, which would increase tax revenue and jobs in Finland.


Additional information:

Juha Saarnio, Head of Innovations Networks tel. 045 135 2688

Michaela Ramm-Schmidt, Senior Legal Advisor, tel. 040 525 0509





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