Consumer Focus welcomes the announcement that the Government has accepted the recommendations of the Hargreaves Review of Intellectual Property. Mike O’Connor, Chief Executive at Consumer Focus, said:
‘This is a long-awaited victory for common sense. Copyright law is outdated, it does not reflect the way people use music, films and e-books today and hinders innovation and economic growth.
‘This announcement is very welcome and will give customers the rights they expect in using the film and music they buy. It brings us closer to a digital marketplace which supports economic growth and balances the rights of consumers and copyright owners. However we are concerned that consumers will have to pay an upfront fee to challenge accusations by copyright owners.’
Copying CDs, film and e-books
Mike O’Connor, said: ‘It is nonsensical that over a decade since MP3 players appeared on the market ‘ripping’ CDs and films remains illegal. People buying CDs, DVDs and e-books understandably think they should have the right to play what they have paid for on their MP3 player or computer. This announcement will bring the law up to speed for consumers’ needs in the twenty-first century, and should be put into effect as soon as possible.
Hardware levy for format-shifting
The music industry argues a levy should be placed on hardware such as MP3 players in return for legalising format-shifting. This would lead to higher prices for such devices for consumers. Yet there is no existing economic evidence to suggest that consumers copying these products for their own use causes copyright owners to lose money.1
Under current law UK based hardware manufacturers who advertise format-shifting products risk being penalised for inciting consumers to break the law.2 The Government has today announced a format-shifting exception without a levy, which should aid UK based hardware manufacturers and encourage innovative music, film and e-book services for consumers.3
Mike O’Connor, added: ‘The current law stifles innovation. Manufacturers also risk being sued simply for offering hardware which allows consumers to copy legally bought goods onto legally paid for devices. No-one is suggesting that creative artists should not reap the benefits of their work, but we agree with Government that an “iPad tax” is not the answer. Another tax is the last thing hard pressed consumers need.’
Allowing music, film and e-books to be shifted into different digital formats is central to having a competitive digital market, allowing consumers to freely choose who they buy digital products from, and which hardware they use.
Copyright reform promoting economic growth
Consumer Focus welcomes the positive impact which reforming copyright law will have on promoting innovation and economic growth.
Mike O’Connor said, ‘Consumers want to see dynamic and innovative creative industries and bringing our laws up to date will unleash untapped potential.’
Fee for consumer copyright appeals
The Digital Economy Act is not merely a mass notification system – in the future, consumers could face being cut-off from the internet if notified that copyright owners accuse them of copyright infringement.4 The Government has today announced that customers will have to pay a £20 fee to challenge this. The fee has been proposed to prevent ‘vexatious appeals’. To limit the number of needless appeals Consumer Focus is urging Ofcom to set the standard of evidence for Digital Economy Act notifications, to prevent copyright owners sending thousands of notifications on the basis of flimsy evidence.
Mike O’Connor, said: ‘The fundamental way forward is to meet consumer demand for legal online music and film services. Simply threatening to disconnect entire households from the internet based on accusations by copyright owners which may be groundless will achieve little. Consumers should not have to pay to appeal against allegations from copyright holders. They are innocent until proven guilty. Twenty pounds may not sound like a big sum but it could deter innocent people on low incomes, leaving them cut-off from what has become an essential service.’
Consumer Focus is urging the Government not to take further steps in this area until the appeal to the judicial review of the Digital Economy Act is concluded in October.
Under the Digital Economy Act the music and film industry would have been allowed to take out injunctions against web-services from which copyright infringing material “has been, is being or is likely to be obtained.” It is welcome that the Government has recognised that such wide-ranged web-site blocking provisions would not work in practice.
Mike O’Connor said: ‘Website blocking will not of itself solve the problem of copyright infringement. Not only is it expensive, and the costs would be likely to mean higher bills for customers, there is also a risk of “over-blocking” preventing access to legal services.’
- A 2011 survey by Consumers International rated the UK as having the third worst copyright laws in the world.
- Consumer Focus research published in 2010 showed that:\
- Fewer than one in five (17%) consumers knew that it is illegal to copy a CD or DVD they have bought on to a computer for their own use
- Even fewer, (15%) think that it is illegal to copy them to an iPod.
- Three out of four (73%) consumers don’t know what we are allowed to copy or record under current copyright law
- Eight out of ten consumers thought that copyright law should be updated
Notes to editors:
- In November last year Consumer Focus published a literature review of the existing economic evidence on fair use rights. The review found that there is no existing evidence to support the argument that activities such as format-shifting causes copyright owners to lose money.
- In March 2011 the Advertising Standards Authority upheld a complaint against 3GA Ltd, a Cambridge based technology SME founded by Martin Brennan. It found that the company had encouraged consumers to use the Brennan JB7 HiFi to copy music CDs, vinyl and cassettes and that, therefore, ‘it incited consumers to break the law.’ The ASA held that future advertisements for such products must ‘prominently state that it was unlawful to copy material without the permission of the copyright owner.’ For further information please see the full ASA decision and www.brennan.co.uk
- Levy schemes for private copying now exist in 22 out of 27 EU Member States, the UK and Ireland are among the five European member states which do not impose levies. The US, New Zealand and Australia have legalised format-shifting without imposing a levy as the UK Government proposes to do. A recent study by Oxera concluded that removing levies could result in gains to the EU economy of between €975m and €1,880m per year, as consumers could buy more and cheaper devices and consume more digital music. In turn manufacturers could sell more devices and enhance their role in new business models for distributing music.
- Under the Digital Economy Act copyright owners who suspect an internet connection has been used to infringe copyright will send a notification to the subscriber. After the notifications have reached the threshold set by Ofcom the subscriber is placed on a “copyright infringement list”, the subscriber can appeal notices by showing that they did not commit the alleged infringement and took “reasonable steps” to prevent others from infringing. Subscribers who are placed on the “copyright infringement list” may be taken to court for copyright infringement and once introduced, may be subject to “technical measures” that would limit their internet access.