Bolkestein steps up war against CD pirates

Date: 31/10/02

By Peter Chapman

SINGLE Market Commissioner Frits Bolkestein is set to unveil a directive clamping down on the fraudsters who cost the EU music and film industry billions of euro each year.

The new law, expected to be proposed next month, will replace the legal patchwork across member states that makes it difficult for industry to secure convictions against pirate manufacturers of CDs and DVDs.

However, industry figures admit the proposal is unlikely to heed their calls for common criminal sentences for breaches of intellectual property - an area in which national courts and lawmakers still take the lead.

Dara MacGreevy, vice-president of the Motion Picture Association, told a news conference of film and music executives that the new law was desperately needed to tackle organised crime gangs specialising in the illegal trade. Too often, he said, perpetrators escaped punishment in court, even when industry had seized and traced huge amounts of counterfeit products.

'This directive is giving a much clearer signal that this is a crime and it needs to be punished,' he said, adding that his organisation regularly found evidence of links between piracy operations and drug dealing.

Frances Moore, director of the International Federation of the Phonographic Industry (IFPI), rejected claims that the industry is encouraging piracy by charging high prices for CDs and DVDs.

'Just because the price of a Mercedes is too high, it doesn't justify stealing it. It is still a crime,' she said, adding that the industry needed to charge realistic prices for music to fund development, promotion of new talent and pay tax.

However, she admitted that the new law would do nothing to stop the flood of pirated CDs from countries outside the Union's borders. These include prospective members such as Poland.

Many customs outposts lack funding and trained manpower to spot and intercept fake products.

'But, believe me, we have a piracy problem within the EU and we need a directive dealing with the situation,' Moore added.

As the anti-piracy campaign hots up, the music industry is launching another lobbying assault - this time to encourage the EU to back lower rates of value-added tax for the sector.

Bolkestein's taxation officials are currently reviewing the list of areas in the '6th VAT directive' where member states can choose to set rates from as little as 5.5 to in excess of 20.

The list, in an annexe to this directive, currently includes food, water supplies, transport, medicines and books - but not music.

Moore said her organisation is teaming up with independent music labels and record shops to try and convince finance ministers to agree to the move, which would boost EU artists and music buyers alike.

Under EU tax law, member states must all agree to changes. Moore said the French and Italians had already signalled their support for the plan. 'We are optimistic,' she added.

Single Market Commissioner Frits Bolkestein is set to unveil a directive clamping down on the fraudsters who cost the EU music and film industry billions of euro each year.