The Mercury News Weekend

Japan’s plan for ‘iPod tax’ is handed a setback

- By Martin Fackler New York Times

TOKYO — A plan to charge an ‘‘iPod tax,’’ or royalties on portable digital music players, unraveled Thursday after a government committee failed to reach agreement on the measure.

Japan’s recording industry has been pushing for the new tax ever since the explosive success of Apple Computer’s iPod began about two years ago. The industry says it needs the fees to compensate for sales lost to home copying and file sharing. The tax would add from 2 percent to 5 percent to the retail price of portable players.

The proposal would cover players that store songs on memory chips and hard-disk drives, two types of recording media pioneered in the iPod. Japan already charges similar royalties on older recording devices, like compact-disc recorders.

The proposed tax has drawn broad attention in Japan, where the committees that help set government policy tend to be stacked with industry insiders who work for corporate interests at the expense of consumers.

And in response to intense public criticism of the proposal, the Agency for Cultural Affairs, which chooses the members of the government committee, took an unpreceden­ted step: It filled the committee with university professors, copyright lawyers and other experts, instead of recordingi­ndustry executives.

Thursday, after a year of debate, the committee concluded it could not reach a consensus on supporting the proposal, said Hiroyuki Suzuki, a spokesman for the agency’s copyright division. Without consensus, the committee had to reject the proposal, he said.

Opponents on the committee had argued that charging the fees would amount to charging consumers twice, since they already pay royalty fees to the recording industry when they buy music at stores or online.

Industry groups criticized the decision, saying they are being robbed of royalties on new products like iPods that are replacing earlier types of digital recorders that are taxed.

‘‘This is very unfortunat­e,’’ said Kousuke Hayashi, a spokesman for the Japanese Society for Rights of Authors, Composers and Publishers, a recording industry group. ‘‘We plan to keep seeking the inclusion of iPods.’’

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