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IFPI Boss and CEO Accused of Tax Evasion in Germany

Drew Wilson — Sun, 03 Jul 2011 12:16:29 +0000

The IFPI (International Federation of the Phonographic Industry) may be quick to denounce others for breaking the law when it comes to downloading copyright infringement, but now the shoe is on the other foot. After incriminating documents surfaced about the organization, some very interesting questions about the IFPI are being raised.

High ranking members of the IFPI might be a little more red-faced these days, but not because someone is downloading KISS albums. According to Heise Online (Google translated, original), the IFPI (like a European version of the RIAA) are being accused of tax evasion. Late last month, incriminating documents surfaced (Google translated, Original) about IFPI "boss" Ivo Sacchi and IFPI CEO Beat Högger may have been involved what some are calling "tax fraud". From the translated Heise article:

The reason for the investigation of German tax investigators, the suspect that it is located in the German-owned corporation is a shell company, which primarily served the purpose, the German tax authorities unlawfully withhold income. Should not involve manipulation of documents and business books have arrived, this would also punishable in Switzerland. That IP gate actually a shell company, there are several clues to Swiss media reports: The company was reported, for example, by 2009, as the IFPI in the Zurich Toblerstrasse 76a. Since then, it resides in the power Strasse 30 - an address that refers to the same building. And the next two Högger only employees of the company are two secretaries who work strangely well with the IFPI.

These revelations are largely seen as a black eye for the organization and some wonder if the scandal is isolated to the two higher ups or if others in the IFPI are involved in this scandal. The reports don't suggest that German authorities are investigating, but given how cash strapped some European countries are these days, it might not be too far fetched to think that authorities might be interested in pursuing the case. The IFPI has been known for pushing for things like a three strikes regime in Britain amongst other anti-piracy efforts across a number of countries. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Canada’s Election: Is the iPod Tax a Non-Issue?

Drew Wilson — Tue, 19 Apr 2011 22:21:39 +0000

It's been often discussed on mainstream broadcasters news programs like CBC and CTV. It's even taken centre stage in a Conservative attack ad against all of his opponents. The question is, has it really taken hold in the online world or has it become a dud?

For those who are interested in technology related issues, there are plenty of subjects that can grab a persons interest in this election. These issues can include the issue of copyright, privacy, lawful access, the spectrum auction, artists rights, ACTA, Creative Commons, fair dealing, the moralities of file-sharing lawsuits, CETA, the more recent TPP agreement, free software, open software, crown copyright, ISP and telecom competition, broadband access and even last mile internet access to name a few. That's what makes this push over the iPod tax issue so puzzling because it was actually one of the more minor issues that was brought up by the Conservative party. For the record, here is the attack ad in question as part of the more recent push to bring this issue to the fore-front: The video was posted on YouTube on April 11. As of April 19th, the video has received a measely 7,800 views. With statistics like that, it's hardly the vote grabbing and attention grabbing issue for young voters. So, what gives? The original debate, that is, the removable storage levy debate, was never the largest issue in the online world to begin with. Sure, it did gain some attention originally, but not exactly from the parties at the time it was being discussed. The issue was simply relegated to the confines of a few legal web pages where some lobbyists were arguing over whether or not the technology industry should be subsidizing a dying music industry policy every time there's a new advance in technology. Another interesting perspective is that if there's a new levy, then maybe file-sharing should be legalized because artists are already compensated whenever that music is put in to a hard drive, cell phone, etc. I think, at best, the issue received some mixed reviews. What I do think is interesting though, is that the issue surrounding an artists right to be paid is suspiciously absent in all of this. Through the many debates I've witnessed or read about this issue, that issue of how artists should be paid these days is magically gone in the shadow of the iPod Tax issue raised by the Conservatives. Another possible reason why this issue simply hasn't gained any momentum is the fact that the iPod simply isn't as trendy as it was a few years ago. Look at the iPod marketing between 2 and 7 years ago. There was a time when practically every contest geared toward a younger generation had an iPod as a prize. You had those famous ads of the silhouetted figure dancing around wearing or holding a white iPod. These days, people listen to their music on other MP3 players and cell phones. In short, the market is much more saturated with things that play MP3's than half a dozen years ago. Apple, to my knowledge, has focused more on their iPhone and iPad products these days which is more multi-purpose than a classif iPod shuffle. In short, it's possible that this is a non-issue because the iPod is a few tech generations old now. Having the iPod front and centre of an attack ad might not have as much bite as it would have years ago. A third possibility was the issue of timing. This ad was posted on April 11th. The question is, what are people who would be most receptive to an ad campaign like this doing at the time? For those who are familiar with school schedules, students are entering their final exams. So while the Conservative party was screaming about how younger voters shouldn't be voting for other parties, the targeted demographic was forehead deep in books either studying for final exams or putting the finishing touches on final projects. It's hard to get the younger vote when they are focused on school at the time. Sure, some will notice, but it's not exactly undivided attention either. A fourth possible reason is that people in the online community are generally more sceptical than those who get their news strictly from the newspaper and TV given the one-way vs. two way nature of those mediums. Some people will go to sources that they trust like Michael Geist, Russell McOrmond, Howard Knopf and here at ZeroPaid to get the facts checked when it comes to copyright and related issues. So what do some of these seasoned veterans think about the iPod tax? The credibility seems to be thrown in to question. Michael Geist commented as early as December on the issue saying that the Liberals have flatly stated they don't suppose such an initiative despite what the Conservatives said. Another point was the original motion to bring forth the levy was a tie vote. The chair of the committee, a Conservative, voted in favour of it, therefore passing the motion. The debate made it to the commons where the debate was focused on whether or not artists should be compensated for their work. The idea was to extend the levy, currently for blank media, to other forms of digital storage that can theoretically include an iPod. Again, the debate was very different back then. Today, there seems to be no mention of compensating artists now that these ads are flying out. Russel McOrmond points out that it was a Conservative that tabled the motion that started it all. McOrmond commented that the Conservative campaign website, ipodtax.ca, is "an embarrassingly inaccurate campaign website". In short, the iPod Tax campaign is known to have problems reflecting the facts correctly and accurately. Many people in the online world pick up very quickly when something is either wrong or misleading and often let the issue or campaign fall off in to the internet ether, never to be seen or heard from again. It's not just us that is proclaiming the issue a non-issue at this stage. Mark Blevis, a digital public affairs strategist, has reached a similar conclusion not just with the popularity of the video on YouTube, but with trends on Twitter as well. Blevis' analysis of Twitter:

Tweets about the iPod tax make up just slightly more than 3/10ths of 1% of all election related tweets for the period of March 26 through April 15 (1,178 of 369,844 Tweets). Even if we remove the April 12th spike of 70,315 tweets (more than 50% of which was debate related) as a statistical anomaly (most days hover between 10,000 and 15,000 tweets), iPod tax related tweets only gain 1/10th of 1%. In fact, the most tweets in one day on the iPod tax (338) barely edged out the Twitter “spanking” directed at @senatorjake (324) for his “attack dogs” tweet.

Blevis also noted that the Stop the iPod Tax campaign managed to get a total of 405 fans on Facebook which contained a "very mixed debate" taking place. Blevis concluded, "I expected a different result. It seemed logical that reminding Canadians a vote for the Liberals would mean a vote to pay an additional $75 on each purchase of an iPod would send people to the web with torches and pitchforks (whether or not the actual claim is true). Despite all the media attention, and the slick ads, it just doesn’t seem to land." So, is this just a case of voter apathy and the demographic simply never getting engaged in politics? I don't think so. I think this is simply a campaign that missed the mark on virtually all counts. The timing was wrong, the facts weren't presented accurately, and it was never the single largest debate to be had to begin with. For people engaged in the online world, that can be a concoction for disaster for anything, let alone a Canadian campaign. The question is, what will gain interest in the younger demographics who can vote? I would put money on a well-funded campaign over two weeks that focused on the following: 1. Why is the government is engaging in secret trade agreements that would allow border security to seize your laptop, cell phone or MP3 player at the border? 2. Will the government enact a three strikes law on internet users that could disconnect internet users, even innocent users, from the internet without court oversight? 3. Why is the government making you pay for your legally paid for material more than once with legal restrictions on DRM or why can't I legally format or time-shift because of the presence of DRM? 4. Why is the government demanding that all of our online conversations (whether private or not) be wire-tapped without a court order? 5. Will the government allow record labels to sue average people for millions of dollars for non-commercial infringement as seen in the US? I bet that if one were to put forth a campaign that dealt with these five points, it'll gain more momentum than the iPod tax issue. I think it's a tragedy that most political parties aren't pushing forward on these issues outside of one-on-one conversations and vague references on their platforms. I mean, talk about lost opportunities to engage with voters here. What do you think? Is the iPod tax not that big of an issue? Could there be other issues that would more likely get your attention? Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

RIAA Gains Support for Radio Tax

Drew Wilson — Sun, 02 May 2010 22:45:33 +0000

During an event on Capitol Hill, the AFL-CIO hailed the radio tax as fair pay for a hard days work.

The event also drew interest from politicians at the event. The group also issued a statement which says, "On behalf of the AFL-CIO, I am so pleased that we stand here today – united with the unions of AFM and AFTRA and with their great leaders Tom Lee and Roberta Reardon – in support of the fundamental right of Americans to be paid for their work." "In America, whether you're a performer, firefighter, teacher or steelworker, you should not be cheated out of the wages you earned." "Yet for the past 80 years," the statement continues, "radio stations have used the publicly-owned airwaves to make billions of dollars playing music without paying artists that created it one cent for using their recordings." The event was held with RIAA lobbying group musicFIRST. It's nothing short of ironic that the event was used to trumpet hard everyday working people when the groups that stand to benefit are mainly CEOs and corporations, not artists. That point is very apparent when one looks at other examples around the world of a radio tax. In Canada, there is a levy on radio. I've personally spoken with independent radio station managers who have told me that the system is highly corrupted. The money, I was told, is gathered and go almost exclusively to the top few artists on the charts with the rest of the artists barely even seeing a dime of pay from the levy. The effect on radio, though, is rather profound. Only a small handful of stations actually are able to exist because the cost to operate is greater with such a levy. The few stations that do exist mainly play top 40 music with just about all forms of alternative music getting snuffed out. If one wants to kill competition in the radio industry, a new tax on them is an excellent start. It's hard to treat a lot of the comments coming out of this seriously - particularly the idea that this will suddenly pay artists for a hard days work when its pretty much paying copyright holders, not necessarily artists, over and over and over again for that one day of work. It's very sad to see the industry openly declaring war on one of its few allies that are left. The radio industry has spent decades promoting the industry's music. What will everyone else get as a result of this tax? Nothing. At least in Canada, the levies were used to argue against the record industry when it tried to argue in court that they were losing millions due to file-sharing because the industry gets an automatic stream of revenue for, well, existing. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

ASCAP Demands Additional Performance Tax for Ringtones

Drew Wilson — Sun, 21 Jun 2009 08:34:36 +0000

You got yourself a brand new cell phone. You then go do the honest thing and pay that huge amount of money for a ring tone and put it on your cell phone and set it to be your ring tone. Apparently, you now have to hope that your phone doesn’t ring or else you are allegedly infringing copyright unless you pay a performance tax – at least that’s what ASCAP is hoping for.

For those who believe that copyright laws make pirates out of us all, they may have some fresh ammunition over this latest revelation. The EFF has written about this. In a court brief between ASCAP and AT&T, ASCAP argues that even if you have legally paid for your cell phone ring tone, you could still be a copyright infringer because you have not paid a performance tax. As we’ve witnessed already, one woman faced an $80,000 fine for infringing copyright.

So, should someone be liable for a 5 figure amount every time their cellphone goes off? The EFF doesn’t think so:

Fortunately, ASCAP is wrong. Even if the incidental mobile phone playback of a short snippet in a public place were viewed as a “public performance” (something no court has ever held, and that would also put you in jeopardy for playing your car radio with the window down), the Copyright Act has a specific exception, 17 U.S.C. 110(4), that covers performances made “without any purpose of direct or indirect commercial advantage.” That should take care of ringtones going off in the restaurant.

The EFF also comments on how this could be considered fair use (how often does a full three and a half minute song get played before it is answered anyway?)

This also comes in to question how many millions of Americans this could criminalize. In this day and age, it’s so frequently the case that people without cell-phones end up being in the minority. Is it really all that enforceable to be monitoring every street corner, every bus stop, every elevator, every subway and every public space to listen for ring tones all day long?

Additionally, the EFF likens this to having the car stereo on with the windows rolled down. There’s something amiss when arguing that all cell phone users now being asked to fork over a performance tax just because they have a ring tone.

ASCAP is the American Society of Composers Authors and Publishers. The organization is responsible for collecting royalties on “performances”. Wikipedia entry.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Is It Right to Consider the Internet as Little More Than a Broadcaster?

Jorge Gonzalez — Sat, 20 Dec 2008 22:51:40 +0000

There is a growing trend to define the internet as little more than a “broadcaster”, but isn’t it a bad thing to start considering the internet little more than just another TV station?

Many would argue that the internet has been one of mans greatest inventions, in part, because it gives citizens new-found freedoms and a medium for expression that can be experienced by many people around the world without having to spend billions of dollars to do so. It was all fun and games until legacy businesses and governments from around the world entered the picture.

Since then, major corporate entities and governments have been grappling with many questions surrounding the internet including the question about how one controls the internet. Since there is no real central hub for the internet unless one counts the internet backbones as the internet’s central office (which is still arguably a flawed argument to make in the first place), the idea of controlling the internet had major difficulties making the transition from sounding good on paper to putting it into actual practise.

Recently, there have been a set of cases highlighting a new movement by various governments around the world to legally consider the internet as a “broadcaster” While it has been a rather subtle movement in many cases, the movement does have serious implications.

Recent Cases

Australia

One of the better known cases in recent memory is happening in Australia. Just ask digital rights advocates that reside in that country what has been protested recently. Essentially speaking, the Australian government wants to censor pornography and anything they deem “inappropriate” on the internet. From a Digital Liberty Coalition press release (PDF):

“The problem is not with the concept of protecting children, in fact Senator Conroy has been adamant at dismissing all criticisms of his filter by alluding that the critic clearly has a stash of child porn hidden away,” says Jasmine, one of the national organizers from DLC, “but in the fact it is mandatory, restricts adults to material only suitable for MA15 audiences, and filters out political communication of whatever is deemed ‘hate’ literature by the government in power at the time. There are no checks or balances in place in the legislation to prevent future abuses of this filter to infringe more on the human rights of all Australians.”

Restricting the internet to an MA 15+ medium is very similar to laws surrounding what can be aired on television – MA 15+ is the highest ranking broadcasting can go before it is unlawful to air it.

France

France just recently made a move to put a tax on the internet so that ISPs are forced to contribute just under 1% of all profits to a public television fund. Many are calling the move unconstitutional.

Why Governments Could Have Gotten the Idea that the Internet is a Broadcaster

Calling the internet a broadcaster can easily highlight again why the government has only the foggiest idea of what the internet is even to this day, but there are ways one can draw similarities between a broadcaster and the internet.

One of the major developments that was a part of the network neutrality debate was that ISPs were pushing for IPTV – a way to stream television shows from the ISP to the user for a fee. This was also one of the things that caused major PR damage because while the ISPs were promising to stream live TV over the internet to ISP customers, the ISPs were also saying that bandwidth is severely limited in spite of evidence that proved otherwise. This sparked the criticism that ISPs wanted to turn the internet into either another cable network or a phone package much like other services they offered. It wouldn’t be a surprise if governments actually took the idea and flew with it into pushing new legislation that ISPs wouldn’t like.

Another way to look at the internet may be to just look at YouTube. Many people consider YouTube as a great way for users to create user-generated video’s – streaming the results to the users. Broadcasters also stream content to users – they frequently create the content that is also streamed to the end-user.

Why the Internet is not a Broadcaster

In the many ways that the internet is a broadcaster, there are at least as many, if not, more ways in which the internet is not a broadcaster.

One way in which the internet is most commonly used is e-mail. Users send messages back and forth in the same way people send letters back and forth in the postal service (though some governments are legislating the ability to pry open letters unlike the mail system) The postal service is a far cry from what a broadcaster does.

Another commonly used way the internet is used is to play video games online (like MMORPG’s, first person shooters, casino’s like Full Tilt and the billions of Flash games posted on online gaming websites) often against each other for enhanced playability. The internet can be used as a virtual arcade enjoyed by billions around the world.

It’s hard to talk about the many uses of the internet and not include online chat which has been a staple of the internet since pretty much the beginning. In many ways, the online chatrooms (like IRC) and forums (like ZeroPaid’s vBulletine) can be likened to a phone conference that major businesses have more than likely used on a fairly regular basis. Many of these mediums for communications have been used time and time again like a help desk for various problems like computer related problems (and, by extension, through Google – ‘got a problem? Ask Google’). Again, almost nothing related to a broadcaster.

What about online shopping? One of the most common uses of the internet is internet shopping which even the copyright industry uses to make their billions. If there’s anything that can be credited for having the worlds largest supermarket/garage sale, it would be the internet.

While the copyright industry has no problem labelling the internet as a medium for piracy, the internet is also an anti-piracy mechanism quietly used by the copyright industry. Just ask anyone who has ever had to install and validate software like Windows XP. Similarly, one can say that the internet is an operating system if concepts like cloud computing ever takes off. Additionally, it can be considered an extra hard drive with the advent of online storage.

The internet is also frequently credited for being a source of online information. Wikipedia is the prime example on how the internet is basically an online encyclopedia and source of information. Is a broadcaster like a dusty series of books? That would be extremely hard to argue.

Try getting away with describing the internet like an virtual jukebox or radio station. Online websites like Soundclick and Newgrounds Audio portal for examples provides a massive legal means to listen to music for free through streaming or downloading. Of course, there are millions of others like Last.FM, Jamendo and WinAmp stations, but you get the idea. Like a broadcaster? So close, yet so far.

One can write an entire book on how the internet is not like a broadcaster, so the above should suffice.

Why it’s bad for governments to consider the internet as a broadcaster

Aside from being technologically inaccurate, it is also a politically dangerous way of thinking as well.

It’s bad for politics

The very people thinking of legislating in this manner will find that it’s bad for the political system. In the United States, the last election proved to be one of the most popular. The biggest reason was the fact that political parties were using the internet to spread their message in unprecedented ways. Voter turnout was practically record breaking. Considering the internet as little more than a broadcaster and legislating accordingly would have major negative consequences for all political parties in question.

It’s bad for business

Since we’ve seen some of the ways governments are legislating while looking at the internet as a broadcaster (like blocking anything considered ‘indecent’ or ‘inappropriate’ (Australia) or (as seen in France) tacking on extra taxes), ISPs will be forced to pass these ideas onto customers like through removing access to online content due to political pressure or moving the extra fees onto customers. If the prices rise for lesser content, fewer people will be interested in getting an internet connection. This means less revenue for major ISPs around the world. Less revenue also means less money going into various economies (weakening them) – something world-wide governments should be thinking is the last thing they want to do in the first place.

It’s bad for society

Never has the human race been able to communicate over such wide distances with such ease. This has allowed for an explosion of human knowledge to the point where the real question is, how does one organize all this information? If governments start censoring or taxing the internet, it doesn’t take a rocket scientist to realize that this will be a major set-back for the progress of society when that information starts disappearing from their computer screens.

Conclusion

In short, the internet does not need more enemies (The RIAA is still doing a stellar job at filling that role in) and in all practical purposes, the governments in the world should abandon the idea before they cause major harm to what has been, by and large, one of the best inventions humanity has, to date, ever had.

Germans unhappy with TV tax for mobiles and PCs

Jared Moya — Mon, 24 Jul 2006 18:05:45 +0000

Germany is to introduce a TV tax for both PC and (UMTS) mobile phones that can receive television. The tax could be as high as €17 per month.

Consumers that are already paying for radio and TV at home need not pay extra, but companies do. They may even have to pay for every location PCs or mobile phones are used at.

According to German magazine Der Spiegel small companies in particular have protested against the tax, which is to be introduced in 2007.

Germany isn’t the only European country to adjust its TV licensing law. The Swedish parliament voted on 1 June to make it a requirement to pay the licensing fee, regardless of how television is watched. However, the law is still vague, leaving it to the courts to sort out the details. Currently, a person who owns a TV in Sweden must pay 1,968 kronor a year, or nearly five kronor per day.