Canadian MP3 player tax challenged

Apple, Dell and others say a ruling in Canada that would impose an extra fee of as much as $25 on iPod-like digital music players isn't legal.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
MP3 player manufacturers, including Apple Computer, Dell and Hewlett-Packard, are challenging a recent regulatory ruling in Canada that would impose an extra fee of as much as $25 on iPod-like digital music players.

The Copyright Board of Canada ruled in December that hard drive-based digital music players should be subject to fees aimed at compensating musicians, songwriters and record labels for copyright infringement. Similar fees are placed on blank audio tapes and CDs, and manufacturers typically pass on the costs to the consumer.

A group of retailers, including Wal-Mart Stores and Best Buy, also is appealing the decision, which will be heard by a federal court.

As part of the same ruling, copyright regulators said they believed that downloading files--even copyrighted works--from peer-to-peer networks such as Kazaa was legal under Canadian law. Offering copyrighted files for upload, or otherwise distributing files without rights holders' authorization online, did not share the same shield, the board said.

Some Canadian legal experts expect the music industry to appeal that portion of the decision. Already, attorneys for the Canadian Recording Industry Association (CRIA) have said they believe the decision was wrong and that downloading is also illegal.

Since the decision, CRIA executives have told Canadian news publications that they expect to file lawsuits against file swappers in Canada, following the lead of the Recording Industry Association of America's (RIAA) actions in the United States.