Private copy: reconditioning players up against the tax on used smartphones

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The circular economy is in trouble. Refurbishment players face the threat of private copying remuneration on all refurbished devices sold in France. The authority in charge of its application provides in particular for a tax varying between €7.20 and €7.80 depending on the device.

the market

For several weeks, discussions have continued, under tension, concerning the possibility of a levy on private copying applied to refurbished devices. Refurbishment players are worried about this possibility. Yesterday, the Commission for the remuneration of private copying – the authority in charge of applying this tax and attached to the Ministry of Culture – adopted a specific scale for these devices establishing a reduction of 35% for tablets and 40% for smartphones. This would thus represent an amount of 7.80 euros for tablets against 7.20 euros for smartphones, when we know that a puncture of 12 euros is applied to new products upstream.

The announcement undermines the work of reconditioning players, who see in this decision potential losses for many SMEs and jobs in the hot seat. The Sunday column of the Journal du Dimanche, “Ecology or cultural exception: the question should not arise! », signed by 1661 artists, authors and actors of the culture is an additional blow carried to the companies of reconditioning.

A forum with dubious arguments and figures

This forum was an opportunity for the signatories to defend their point of view and a strict application of copyright, in this context of health crisis. Challenging “sellers of refurbished products [qui] refuse to contribute to this virtuous system”, the artists see in the position of these sellers a way of discarding thanks to the circular economy and ecology. This argument did not please the actors of the reconditioning, “unfairly” targeted. Among them, Benoit Varin, co-founder of Recommerce wanted to respond to this forum. “It is totally incorrect to present this quote as being the argument of the French reconditioners. It is nothing. It is also inaccurate to be told that we refuse to respect European law”. Indeed, article 14bis B adopted without modification by the Committee on Sustainable Development in the National Assembly stipulates that “reconditioned digital equipment will not be subject to the payment of remuneration for private copying, when this equipment has already given rise to such remuneration. Thus, only new devices currently have to pay this remuneration for private copying.

For Benoit Varin, “the current debate is indeed about the creation of a new burden that will weigh on reconditioners, not about a loss that could be suffered by the culture sector”. The annoyance is perceptible when faced with the quote from a single player, Back Market, defended in the forum as “an overwhelming leader in France in the sale of refurbished electronic products which captures 85% of this market” while this one does not is actually just a marketplace for refurbished products. “He will not be affected by private copying,” says the co-founder of Recommerce. “It is not them that Copie France seeks to subject to remuneration for private copying. It is the French sector, made up of VSEs-SMEs with a fragile model that will be taxed. Back Market, as a partner, simply wanted to help us defend our sector by taking advantage of the announcement of strong news related to their fundraising,” he adds.

A market and jobs at risk

While cultural artists, signatories of the forum, affirm that “reconditioned smartphones already represent nearly 15% of telephones purchased in France”, the response provided by Benoit Varin, president of Rcube and Jean Lionel Laccourreyre, president of SIRRMIET (Interprofessional union for the reconditioning and regeneration of computer, electronic and telecom equipment) gives certain details as to the reality of the market. “The market for refurbished telephones is progressing, this is equivalent to 10% of telephone sales today”. Represented by French VSEs and SMEs, the market is still unstable and this announcement could make some companies flinch. “2,500 jobs are at stake out of the 5,000 that we represent today,” explains Benoit Varin. “On the sale of a 64 GB iPhone 8, we generate 18.33 euros of margin which we use to pay our expenses, our employees, our equipment” he specifies. Faced with this, a fee of 7.20 euros represents a substantial sum for these companies. “It is above all for the price that consumers buy refurbished devices,” he recalls.

Regarding the remuneration of private copying, we note a sharp increase in royalties collected in one year despite the health crisis, thus rising from 260 million euros in 2019 to 273 million euros in 2020. The next step, decisive for refurbishers, concerns the bill on the digital environmental footprint debated in the National Assembly on June 10. On this occasion, the French players in the reconditioning intend to unite, in particular concerning the threat of abolition of article 14bis B which currently protects the sector from any additional royalty. In a broader vision, French reconditioners wish to get closer to other European players, in particular with the Eurefas association, in order to request European harmonization in terms of private copying and a common definition of reconditioning, sometimes confused with the term “renewed”. (which means refurbished).

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