Finland is often held up as a shining example when it comes to the need to reform device-based levy systems and to find alternatives to traditional copyright levies. Most recently, electronics industry association Digital Europe presented the ‘state budget model’ in Finland as a good alternative to copyright levies. But is this really a good alternative? The Finns themselves are apparently not happy with the model.

Instead of keeping the model, exactly 10 years after the abolition of the device-based levy system, Finland is once again preparing a fundamental change to its remuneration system for private copying. Because the model, which is based on taxpayers' money, has not proven itself over the years. Remuneration for the right of individuals to make private copies is not linked to the marketing of specific devices or their storage capacity, which at least provides some indication of the use of copyrighted works. Instead, the level of remuneration is linked to political and fiscal discretion, i.e. to considerations of how much money one wants to allocate to the cultural sector.

Current reform proposals

A recent study commissioned by the Ministry of Education and Culture proposes a return to a traditional copyright levy. This means replacing the existing state-funded model with a system based on levies imposed on manufacturers and importers of digital devices. This would take into account EU Directive 2001/29/EC and ensure adequate compensation for rightsholders.

The discussion is nothing new. As we reported last year, rightsholders and their representatives have launched a debate in Finland on the future of private copying compensation. The government has previously tried to drastically reduce the remuneration, which was met with resistance from creative industries. The ‘Don't Let Culture Disappear’ campaign called for the maintenance of a fair remuneration, arguing that private copying remains economically significant, especially given the proliferation of digital storage and streaming services.

Moving away from state budget-based financing is a crucial step in transforming the system. The current model, which relies on state funding, is vulnerable to economic and political fluctuations. The levy system, on the other hand, would provide a more stable, independent mechanism, with funds coming directly from digital equipment manufacturers and importers. Another important aspect is the expansion of the range of devices subject to the levy. Until 2015, only a few devices and digital storage media, such as CDs and DVDs, were affected. Now, the proposal also includes smartphones, tablets, computers, and other devices that are frequently used for private copying. The newly proposed system would also expand the list of eligible rightsholders, including authors, visual artists, photographers, and broadcasting organisations. The total annual compensation is expected to increase to €14 to €15 million.

Necessary reform

The reform is essential to adapt to the digital era, where physical media no longer dominates, and copies are made on devices, such as smartphones and cloud storage. It also ensures compliance with EU rules requiring fair remuneration for creators. Another crucial argument in favour of the reform is the need to create a stable source of financing. Payments to creators should not depend on political decisions or budget crises. The proposed reforms have the potential to create a fairer and more sustainable private copying remuneration system. The question is whether the government can find a compromise that satisfies all parties involved: rightsholders, hardware manufacturers, internet service providers, and consumers. The discussion continues.

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