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Ecuador to Implement Charges for Private Copying Levy

Image from Shutterstock. Copyright: S_L

Image from Shutterstock. Copyright: S_L

UPDATE: Since the original publication of this article in Spanish, there have been no significant changes to the information reported, except that the list of products to be taxed by the Levy was publicized on Facebook [es] by the association Usuarios Digitales (Digital Users). 

[All links lead to Spanish language pages, unless otherwise noted.]

A proposal put forward by the Ecuadorian Institute of Intellectual Property (IEPI) would impose an additional tax of 4%-10% on the importation of all music and video players, such as cell phones, personal computers, and tablets, as well as storage devices (CDs, DVDs, etc).

Faced with rumors and varying opinions about the proposal, known as Compensated Remuneration for Private Copying (RCCP), or private copying levy, the IEPI released a statement on December 10th explaining that the proposed measure is not a tax and that it falls under the provision of the current Ecuadorian Intellectual Property Law. The statement emphasizes that the current law already establishes the RCCP in its articles 105 to 108, so the project they are working on has to do with the implementation of the RCCP, as well as the distribution of the compensation that is collected. The IEPI added:

Se desinforma cuando se afirma que existe un impuesto a descargas, o un cargo tributario dirigido al Servicio de Rentas Internas, al Servicio de Aduanas o directamente al IEPI por cada descarga que se realiza. Eso es falso y contiene una intencionalidad deliberada para confundir a los usuarios.

It is mistaken to claim that there exists a tax on downloads or a fiscal tax going to the Internal Revenue Service, Customs Service, or directly to the IEPI for each download that takes place. This is false and is intended to deliberately confuse users.

Roberto Aspiazu, executive director of the Ecuador Business Council and the Ecuadorian Telecommunications Association (ASETEL), is one of those who has made clear his rejection of the measure, saying that it is only a different name for a tax of 4% for cell phones and other devices.

In an interview with local media on the subject, Aspiazu criticized the contradictions of the Ecuadorian government: “We will end up with a 24% tax. Brazil, which produces electronics, has a 16% tax, but that is in order to protect its industry. We, who have no industry, are raising the tax to 24% and then claiming that we want public policy that facilitates access to mobile Internet.”

JJ Velasco, writing for ALT1040, compares this measure to similar laws in Mexico and Spain (the Sinde Law [en]), and explains that it is not a tool of dissuasion, but rather a collections process whose original model dates back to around 2007. This model assumes that everyone is pirating and therefore increases the cost of devices that can be used for such activity. Velasco continues:

En estos años el escenario ha cambiado mucho y la oferta de contenidos legales es enorme y sigue estando a buen precio. Spotify sigue su expansión por Latinoamérica (acaba de aterrizar en Chile y Colombia), Google ofrece música a través de Google Play, Apple también ofrece música a través de iTunes y, gracias a Netflix, también podemos encontrar películas y series en streaming legal; con tanta oferta multidispositivo ¿en serio van a imponer un canon a los dispositivos? El Gobierno defiende la medida porque supone una fuente de financiación para los artistas ecuatorianos pero, realmente, tiene un impacto directo sobre el usuario final.

In these years, the situation has changed significantly: the availability of legal content is enormous and continues to be affordable. Spotify is continuing its expansion in Latin America (it just made its debut in Chile and Colombia), Google offers music via Google Play, Apple also offers music through iTunes, and, thanks to Netflix, we can also legally stream movies and TV shows. With so many multi-device options, are they really going to impose a levy on these devices? The government defends the measure because it would be a source of funding for Ecuadorian artists but, in reality, it has a direct impact on the end-user.

On the blog Derecho en Bicicleta, the anonymous author lists several reasons that s/he believes justify his/her opposition to this project: first, it is unconstitutional, and second, it contradicts the concept of the social knowledge economy, which was defended by the President of Ecuador himself. Regarding the unconstitutionality of the project, the blogger argues that it violates Article 287 of the Ecuadorian constitution, explaining:

La remuneración por copia privada es una tasa creada en una ley de 1998, que establece la obligación de que un particular (el importador o fabricante) pague a otro particular (la sociedad recaudadora creada por los artistas) por algo que no han acordado mutuamente: es una imposición. Puede comprenderse que el Estado imponga la obligación de pagar impuestos, pero es irracional que una ley obligue a un privado pagar un valor a otro privado, sin que haya mutuo consentimiento. Por esto es clave enfatizar que quien recibe el canon digital no es una entidad pública: no es el Estado, es un particular. Es esto lo que lo hace (a mi juicio) inconstitucional.

The private copying levy is a tax created in a law from 1998, which establishes the obligation of one party (the importer or manufacturer) to pay another party (the collections society created by the artists) for something that has not been mutually agreed upon: it is an imposition. It is feasible for the State to impose an obligation to pay taxes, but it is irrational for a law to require a private entity to pay a given amount to another private entity without mutual consent. For this reason, it is important to emphasize that the recipient of the private copying levy is not a public entity: it is not the State, but a private entity. This is what makes the levy, in my opinion, unconstitutional.

Various discussions on the topic can be found on Twitter under the tags: #Impuestospordescargas (Taxes on downloads), #pagoSINreproducir (I pay WITHOUT copying), and #noalcanon (no to the levy). Below are several highlights from the Twitter debate.

Efrén Guerrero speaks out against benefiting a dubious group of Ecuadorian artists: 

Everyone should earn their living through their work. Not by being compensated for not being able to compete in the market.

Diego Cevallos put together a Storify with tweets on the subject: 

Levy for “Compensated Remuneration for Private Copying”

Carlos Correa of Creative Commons Ecuador shares a video conference with Santiago Cevallos, the National Director of Copyright and Derivative Rights of the IEPI:

video conference with Santiago Cevallos of IEPI.

Mauricio Becerra argues that the anti-pirating measures should be focused elsewhere: 

They're inventing this to avoid dealing with who knows who… they're so afraid of going up against the real pirates.

Finally, Guillermex of the blog The Wild Children suggests that we should keep in mind the old saying “Innocent until proven guilty,” and then reflects:

Mientras el resto del mundo se vuelve loco por compartir y poner la música disponible y al alcance de todos; mientras en otras regiones, los computadores, laptops, tablets y todo aparato tecnológico se liberan de aranceles; mientras en todo el planeta tierra, los artistas suben a internet su material para que sea escuchado grateche; aquí, en el país de la revolución, hacemos todo mal y todo al revés.

While the rest of the world goes crazy sharing and making music available and accessible to everyone; while in other regions, computers, laptops, tablets, and all sorts of technology become free from taxes; while all over planet Earth artists are uploading their material to the internet to be listened to for free; here, in the country of the revolution, we are doing everything wrong and backwards.

For the time being, the result of this proposal is that internet users are putting forward a comprehensive discussion about the copyright model and casting doubt upon the government's proposal regarding digital media and the society of knowledge. Let's wait and see how the discussion develops.

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