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Teuton gov’t to raise royalties on hardware

Bevy of Web levies would go to artist's rights association

BERLIN — Siding with Germany’s artists, the federal government has defended controversial plans to raise new royalty levies on computer and Internet hardware products that would go to artist’s rights association Gema.

Justice Minister Herta Daeubler-Gmelin said the plan only extends an existing system of copyright levies to Internet-related products, like modems and CD burners, which can be used to copy music from the ‘Net.

“The cost of requiring modern media to pay these levies will not be anywhere near as high to the consumer as industry lobbies would have us believe,” she said in a statement. “But they are needed to protect intellectual property. It is artists, authors and other creative people who are losing out from what are otherwise extremely welcome advances in technology.”

Tax tack

The new taxes still face approval by parliament. Germany’s center-left government imposed levies on scanners and photocopiers earlier this year, leading to double-digit percentage price rises on some products, according to industry watchers. Gema also collects fees from the sales of video and audio cassette recorders.

“This is absolutely unique. Nowhere else in the world are such far-reaching regulations being discussed,” said Bernhard Rohleder, head of the Bitkom computer industry umbrella group.

Analog application

“It is totally unacceptable that laws made for the analog world are being applied to the digital one,” he said. The royalty system is based on a 1965 copyright law.

Analysts have warned that new taxes could encourage high-tech firms to leave Germany as well as increase foreign mail-order business in the domestic market.

(Reuters contributed to this report.)

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