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Why the Conservatives Copyright Plans Create a Hidden Cost for RIM’s PlayBook

Appeared in the Ottawa Citizen on April 19, 2011 as ‘Playbook’ Tax Means Apple Wins

Research in Motion, Canada’s technology giant, releases its much-anticipated PlayBook this week. The PlayBook, a tablet computer competitor to the Apple iPad, is enormously important not only to the company, but given RIM’s role as the foundation of Canada’s tech sector, to the country as well.

Given its importance, one would think that Canada’s political parties would ensure that their policies do not create unnecessary roadblocks or barriers to its success. Yet the Conservative plan for copyright reform (as found in Bill C-32) establishes a significant barrier that could force many consumers to pay hundreds in additional costs in order to switch their content from existing devices to the PlayBook.

The PlayBook may be competitively priced with the iPad, but the hidden cost of transferring content to the new device – effectively a PlayBook tax – may mean that many Canadian consumers take a pass.

The source of the PlayBook tax stems from Bill C-32’s approach to digital locks. The bill, which the Conservatives have confirmed will be reintroduced as is if they are re-elected, prohibits consumers from transferring digital content from one device to another if there is a digital lock present. Consumers spend hundreds of dollars creating their own video library, yet under the proposed law the presence of a digital lock will mean that the content is legally locked down to the original device or format (the bill included a new provision to allow for format shifting but that provision is inoperable where there is a digital lock).

Consider the impact of this provision for a consumer with an iPad or iPod who is considering switching to the PlayBook and who has purchased $500 worth of movies and television shows over the years. The retail cost of the PlayBook may be $499, but the ‘ PlayBook tax effectively doubles the cost by requiring the consumer to repurchase all the content if they wish to play it on their new device since Apple iTunes movies and shows come with digital locks built in.

In fact, the costs apply even if the consumer doesn’t have an alternate device. For consumers purchasing a tablet for the first time, they may wish to transfer their DVD collection to their new portable PlayBook. Yet those consumers immediately also face the PlayBook tax since Bill C-32 would block them from making digital copies of their DVDs to play on the PlayBook.  Instead, they would similarly be forced to repurchase the same content again.

These additional costs apply not only to movies and television shows, but to any digital content with a digital lock. Consumers with Amazon Kindles or other e-book readers who have invested in e-books that have digital locks (including students who may have purchased electronic texts for class) will find that they are unable to legally transfer the content to their new device.

The main beneficiary of the PlayBook tax would be foreign-owned entertainment and technology companies – particularly RIM’s chief rival Apple – who either benefit from locking in Canadian consumers or forcing them to repurchase the same content again and again.

The solution to this problem is to provide legal protection for digital locks accompanied by an exception for circumvention for non-infringing purposes.  Numerous witnesses who appeared before the Bill C-32 Legislative Committee supported this approach and it is consistent with the positions of both the Liberals and NDP.

Where someone picks the digital lock in order to sell 1,000 copies of a movie, the law should unquestionably apply.  However, where a consumer picks the lock to exercise their fair dealing or consumer rights, this should be permitted. This approaches targets commercial pirates, while ensuring that consumers are not treated unfairly. To do otherwise creates a significant new cost to consumers and establishes a big barrier to the adoption of a device at a critical moment in the history of Canada’s brightest technology star.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at or online at

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