Private copying levy: the new system for fair compensation and its immediate implications for distributors of digital equipment, devices and media

1. What is the levy?
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Article 25 of the Copyright Act 1996 stated, in its original wording, that reproductions exclusively for private use («private copying»), by means of non-typographical apparatus or technical instruments, of phonograms, videograms or other audio, visual or audiovisual media, will give rise to fair compensation payable to the rightholders, aimed at providing compensation for the royalties unearned by reason of said private copying. That is, all manufacturers or first importers of copying-enabled devices had to pay fair compensation (the levy) to collecting societies. This amount was obviously passed on by the manufacturers/distributors to the end consumer in the price of the device…