Portugal floats ‘terabyte tax’ in fight against illegal file sharers

News 13 Apr, 2012

Opposition party proposes tax on storage devices to protect copyright owners.

Portugal could introduce a tax on storage devices to protect copyright holders from file sharers.

According to a report on Exame Informatica, the Portuguese Social Party wants to introduce the levy on a per terabyte basis in order to recoup the losses made by copyright holders thanks to illegal file sharing.

Levies exist to compensate right holders for that private copying, so where no private copying is permitted there is no need for levies.

The party claimed the policy was aimed at large capacity customers, but the taxes could hit consumer and business users too.

The tax would be equivalent to almost €21(£17) for each terabyte (TB), with storage devices over 1TB having a flat rate of €0.25 (£0.20) per gigabit (GB). This would mean that the 4TB drives on the market at the moment could have around €100 (£82.60) added to the price tag.

It is not just external hard drives or large storage boxes that would be affected. Mobile phones with built in storage would be subject to a charge of €0.50 (£0.50) for every GB they provide.

The Portuguese government is yet to give its backing to the proposals, but it has caused other European countries to question whether this type of tax would be an option for them.

However, Adam Rendle, copyright specialist at international law firm Taylor Wessing, said the Portuguese proposals should not be a cause of concern for the UK just yet.

“In contrast to many European countries, the UK historically has not seen levies on materials capable of copying and storing content,” he told IT Pro. “This is because there is no exception in UK law for ‘private copying’, which would allow format shifting and copying onto storage devices. Private copying is not currently permitted in the UK.

“Levies exist to compensate right holders for that private copying, so where no private copying is permitted there is no need for levies,” he added.

But, the UK Government is looking into introducing a private copying exception, warned Rendle.

“European law, however, requires ‘fair compensation’ for right holders when private copying is allowed. So, if the current preference is maintained, there is a risk that the UK could be non-compliant with European law,“ he explained.

“So, yes, a levy could be introduced in the UK in future, although it is very unclear what it would be and how it would operate.”

Websites offering legal music downloads could be subject to levies in future, said Rendle. “The levy would be imposed on the source of the content and without having to identify any number of devices or services on which content could be stored.

“It would, however, be risky to do that while the market is still developing as it could make the services more expensive for consumers and harm a still nascent market,” he added.