Controversial 'iPod tax'
struck down on appeal


GRANT ROBERTSON
GlobeandMail.com
January 11, 2008

A proposed levy on digital music players that became known this summer as the "iPod tax" has been struck down after opponents argued it was unfair to Canadians.

The Federal Court of Appeal has ruled that the Canadian Copyright Board did not have the right to put levies on new digital music players when it announced such fees would be allowed starting this year.

The board wanted to place a charge of between $5 and $75 on each new device, depending on the number of songs it could hold. Those fees, which are similar to the levies on blank compact discs, are designed to compensate the recording industry for music that is copied.

However, opponents said the fees are unfair because they imply that all owners of iPods are using them to transfer and listen to pirated music.

Microsoft's portable media playerwill be available in Canada this spring as the device tries to compete for consumer dollars with Apple's popular IPod

"The Copyright Board erred in law when it concluded that it has the legal authority to certify the tariff," the appeal court said in its ruling.

The Retail Council of Canada, which argued at hearings this week, welcomed the decision last night.

"This has been a very long battle, but a necessary one," retail council president Diane Brisebois said in a statement. "Retailers have fought against these levies since their creation in 1997 because it taxes a product based on what a consumer possibly could use it for."

The appeal stems from a lengthy debate this summer where lawmakers argued over whether digital gadgets were simply players of music or whether they captured songs as a recording device.

The distinction is important since blank discs are subject to levies because they are often used to record and duplicate songs. Since the hard drives on digital recorders cannot be removed, the recording industry argued they are similar to a blank CD.

Opponents of the levy said the iPods are like portable CD players or stereos, which are not subject to such fees.

http://www.theglobeandmail.com/servlet/story/RTGAM.20080111.wipod11/BNStory/Technology/home

Good news! Take that, thieves =)

And after their ruling they adjourned for lunch to their individual chambers where they ate last night's dinner while listening to their Zunes, iPods, and Zen players.