
EU Court Rules E-Books Are Services, Not Goods - mstolpm
http://www.wsj.com/articles/eu-court-rules-e-books-are-services-not-goods-1425552050
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pilif
While short term, this sucks, I also think that in the way that eBooks work
these days, this ruling is actually fair and it might well fix the situation
for us consumers in the mid- to longer term.

For all intents and purposes, eBooks _are_ services. Between DRM, vendor lock-
in and other consumer hostile "features" of ebooks, seeing them as services
and consequently taxing them as services totally makes sense.

As an ebook publisher, you can't have it both ways. You can't ask for the
lower VAT of the easily lendable and copyable books and at the same time rent
out a product that has none of these "drawbacks".

What will come out of this long-term is much more user friendly ebooks.

~~~
wahsd
I don't think you appreciate the impact. Services are something you lease and
use for a specific period and you never own. This seems at least to be an
affirmation that ebooks cannot ever be owned by anyone but the publisher and
there will now need to be legal mechanisms for revocation of ebooks from your
device and reporting and even penalizing and prosecution of anyone who
prevents revocation or even simply does not delete a book that is a service
and therefore possibly being used illicitly.

~~~
pilif
I totally appreciate the impact which is why I said "this sucks right now".

The thing is that publishers who continue their user-hostile practices can now
be disrupted by more user-friendly publishers whose offerings will only be
taxed at 5% VAT instead of the 20 plus % the user-hostile variant is charged
for.

We'll have to see whether publishers can keep this up or whether they have to
fix their hostile attitude. I hope it's the latter, because if it's the
former, then ebooks are dead.

~~~
scotu
do you think non-DRM'd ebooks will be seen as goods? Being digital, I can lend
it or resell it but I would still own a copy, so how can that be a good?

~~~
nightski
Wouldn't the "good" be the DRM free license and not the digital copy of the
book itself? i.e. if you resell your license you would no longer have it.

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walterbell
Yes, squatting on a piece of land does not transfer title, which is a legal
construct.

~~~
dragonwriter
Except, of course, when, as a matter of law, it does:
[https://www.law.cornell.edu/wex/adverse_possession](https://www.law.cornell.edu/wex/adverse_possession)

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JohnTHaller
The basic ruling is that e-books are 'electronic services' and not goods, as a
paper book would be. Therefor, France and Luxembourg must apply their standard
Value-Added Tax (VAT) of 20% and 17% respectively instead of the lower rate
used for paper-backed books of 5.5% and 3% respectively. EU law states that
reduced rates for specific categories can only apply to goods, not services.

The countries as well as companies like Amazon will push to allow the lower
VAT to be applied to ebooks.

~~~
Cthulhu_
As an extra tidbit of information: Luxembourg was already violating EU rules
for having a VAT percentage of less than 5%.

~~~
legulere
Ireland even has a 0% rate on books according to wikipedia.

Lower than 5% tax rates seem to be pretty common:
[http://en.wikipedia.org/wiki/European_Union_value_added_tax#...](http://en.wikipedia.org/wiki/European_Union_value_added_tax#Zero_rate_derogation)

~~~
gsnedders
The UK and Ireland have 0% VAT rates which are allowed as they were
essentially grandfathered in. They aren't allowed to be expanded, however.

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andrewpi
Why does the EU restrict members from lowering their VAT rates?

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gsnedders
To try and avoid overly large price differentials between member states.

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bndr
Go here: [https://www.google.com/#safe=off&q=eu-court-rules-e-books-
ar...](https://www.google.com/#safe=off&q=eu-court-rules-e-books-are-services-
not-goods-1425552050)

Click on the first link that leads to wsj.

~~~
Udo_Schmitz
This just brings me to Googles homepage with some stuff added after
[https://www.google.de/](https://www.google.de/)

Is it because I'm in Germany and they have the .com --> .de redirect?

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outworlder
Makes sense for Amazon's store, where your books live in the cloud and you
download some of them locally if you want.

Doesn't make sense if you are provided an .epub file to download.

~~~
restalis
If you as publisher are claiming the ownership of some content (by enforcing
various restrictions upon its users, through DRM or just by imposing an
agreement on which you can hold later) even after it was downloaded, then you
are very close to service definition. It's like the way the provided service
reach the client may differ, but the basic value for which the interested
client actually pays stay the same.

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drzaiusapelord
Between this, the constant nag screen on every European site I go to about
"evil cookies," and their relentless attacks on Google and MS, which always
results in a major payout to EU countries... what the hell are they thinking?

We've lost more property rights again. I think the left leaning aspects of the
EU are great for welfare benefits and social services, but the way its applied
to business practices always seems more than a bit off. I fear this is the
slipperly slope here where I own nothing and everything is a "service"
somehow. The sad part is this was done, ostensibly, to avoid a VAT discount
that paper books enjoy. EU corruption knows no bounds.

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antientropic
Why is this "corruption"? Are you alleging that EU officials are running off
with the VAT money for private gain?

~~~
drzaiusapelord
My suggestion is that their ability to tax EU buyers is limited via paper book
exception. Recategorizing them as digital products means more taxation without
any ugly legislation issues that would come up in a traditional attempt to
raise taxes.

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anotherevan
That wouldn't bother me if the buttons on ebook selling sites didn't say "Buy
Now" but said "Lease Now" or "Rent Now". But they don't.

[https://twitter.com/evmcl/status/261661956681908225/photo/1](https://twitter.com/evmcl/status/261661956681908225/photo/1)

[http://www.bekkelund.net/2012/10/22/outlawed-by-amazon-
drm/](http://www.bekkelund.net/2012/10/22/outlawed-by-amazon-drm/)

[http://the-digital-reader.com/2012/10/23/kobo-says-youre-no-...](http://the-
digital-reader.com/2012/10/23/kobo-says-youre-no-longer-allowed-to-share-your-
account-not-with-a-spouse-your-kids-anyone/#.VFFysX8sVcM)

[https://twitter.com/librarythingtim/status/14262859728958259...](https://twitter.com/librarythingtim/status/142628597289582593)

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higherpurpose
Seeing how these days you're effectively "renting" any cloud-based DRM-enabled
digital content, I think it makes more sense for them to be called services
for which you get a "license to use" indefinite (i.e. _limited_ , for as long
as the deal vendor/publisher is in place) period of time.

~~~
glitchinc
IIRC, even some DRM-free digital content (e.g. iTunes downloads) are rented
per the EULA. But yes... I agree that anything that is rented is more
appropriately be defined as a service rather than a product.

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pm24601
Completely the correct decision based on the restriction on ebooks.

Does anyone have the complete reasoning behind the service designation?

It would be cool if ebooks sold without DRM would get the real book tax
treatment.

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avelis
I always thought of e-books as an intangible good. What confuses me on the
ruling is what part of the e-book's labor becomes a service to tax?

[http://en.wikipedia.org/wiki/Intangible_good](http://en.wikipedia.org/wiki/Intangible_good)

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Oletros
The press release for the ruling

[http://curia.europa.eu/jcms/upload/docs/application/pdf/2015...](http://curia.europa.eu/jcms/upload/docs/application/pdf/2015-03/cp150030en.pdf)

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boo_radley
Is it, strictly speaking, possible to pirate a service?

~~~
pdabbadabba
The product/service distinction is orthogonal to the relevant category in
(U.S.) copyright law: the work. Only "works" can be copyrighted, but a work
can be provided as part of a service, sold as a product, or one of any number
of other possibilities. Nice try though. :)

~~~
rdudek
But it's still a product! I can sum this up that all services are products but
not all products are services. So if I were to publish a book which would
classify as "work" which I can copyright. At this point, I have a product that
doesn't exist yet other than a word document ready to be sent off to
publishers. The publisher will take my "work" and print it out into a physical
book which we can clasify as a product. They can also format it into a
electronic version of the book which is also a product. Now, how the publisher
can send it off to a service provider like Amazon Kindle to distribute it
(that's a service)

~~~
masklinn
I assume pdabbadabba meant "sold as a good".

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DiabloD3
Can someone paste the text of this? wsj paywall is making wsj useless again.

~~~
pmontra
Non paywalled news from another source at
[http://www.reuters.com/article/2015/03/05/us-europe-
ebooks-t...](http://www.reuters.com/article/2015/03/05/us-europe-ebooks-tax-
idUSKBN0M11A120150305)

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forloop
Paywall.

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Fdndjxjxr
Richard Stallman warned us about this kind of thing: he warned us and we
laughed.

~~~
Oletros
I'm trying to understand what has to do the VAT class with anything Stallman
has said

~~~
venomsnake
Lets say that a ruling that entitles consumers for the same right for digital
book "services" as for physical would have been preferable.

~~~
Oletros
The ruling doesn't say anything about rights, just the type of VAT to be
applied

~~~
venomsnake
Yes. But ruling in the opposite direction could be used as precedent for
vendors to loosen the DRM licence crap.

~~~
wvenable
No this is the ruling that could be used as precedent for vendors to loosen
the DRM license crap. If they want lower VAT for their products, they need to
make e-books more like a good and less like a service.

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bmaeser
paywall

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OldSchoolJohnny
Paywalled

