This article was originally published on our parent site for the book publishing industry, Publishing Trends.
* * *
The ongoing and increasingly heated debate over the use of Digital Rights Management (DRM) in digital publishing has recently received more press attention because of the EU ruling to charge VAT (value-added tax) on ebooks.
For those in need of a reminder, Digital Rights Management refers to the protections that are in place on many copyrighted digital products like video games, smartphone apps and ebooks that make illegal downloading more difficult.
In the beginning of March 2015, France and Luxembourg lost their court case to reduce VAT rates for ebooks to those of print editions, Reuters reported. The countries tried to convince the court to consider ebooks goods rather than digital services so they could charge the same reduced VAT rates as print books. The ruling against France and Luxembourg means that tax rates on ebooks will rise from 5.5% to 20% in France and from 3% to 17% in Luxembourg.
This ruling comes a little less than two years after the French government’s move to reduce the VAT rate, specifically for the benefit of non-DRM-protected ebooks. French Deputy Isabelle Attard originally distinguished between DRM-laced ebooks as services and non-DRM ebooks as goods on the theory that “Everything that goes against interoperability, or imposes reading constraints would be subject to a VAT of 19.6%, in the capacity of services, and not sale of a book, therefore of a product,” Attard said at the time. This motion failed to pass, so the country decided to give all ebooks the same reduced VAT rate.
DRM systems are often controversial because while they protect copyright, they also prevent people from converting ebooks into different formats, from sharing with multiple users or between different devices, and from printing the ebook. Although there are some movements to eradicate DRM completely, none seem to propose a viable alternate solution to protect against piracy, thereby protecting author and publisher income.
In an interview with the anti-piracy company Rightscorp, Good e-Reader learned that there will be an estimated 700 million pirated ebooks in 2018. According to Rightscorp, approximately 300 million ebooks were pirated in 2013. Based on these numbers, it seems this method isn’t preventing piracy.