France, Europe, DRMs, Interoperability...

Last week, the French MP (Ecology) Isabelle Attard made a suggestion for a compromise on VAT as applied to ebooks.

Proposition:

So far, negociations had been blocked between France and the European Commission on the subject, with EC considering ebooks as a service and not a cultural product, hence not allowed to use the reduced VAT rate, whereas France (and Luxemburg) considers a book as a book, whether in print or electronic, in which case it is entitled to the lower rate.

She proposes a compromise, which could help everyone reach an agreement by differentiating between two types of merchants : if the ecosystem is closed (i.e. Amazon, Apple etc.), it clearly is a service, as detailed in the Terms of Use. Since they don't sell books, but a license/right to use inside of their devices/platforms, with no interoperability, they should be taxed with a normal rate VAT.

On the other hand, other actors who would sell interoperable/open files would benefit from the lower rate.

My opinion

I don't see it working at that level, since the big majority of publishers insist on DRMs, and any e-resellers who wants to reach mainstream customers will need to provide the DRMed files, hence restricting him to the High VAT rate.

On the other hand, if the granularity were per ebook, depending on the presence/absence of DRMs, it would work quite well, by forcing e-resellers to allow fine-grained per-title DRM activation(1), and publishers to restrict DRMs to where it really is mandatory.


Sources : Actualitte | DRM, écosystème fermé : une TVA forte contre Kindle et iPad
Scinfolex | Un objet qui ne respecte pas les droits du lecteur mérite-t-il de s’appeler livre ?


(1)which is not always the case, for example Amazon and Kobo use the same setting for each ebook by the same publisher, except through KDP/KWL