In March 2004, the European Commission established the High Level Group (HLG) on Digital Rights Management in particular to address and discuss the obstacles to the implementation of DRM. The HLG comprises mainly ICT companies and industry associations, i.e. IFPI, Vivendi, Eurocinema, BBC, France Telecom, Vodafone, Fast Web, Philips, Nokia, Alcatel, Hewlet Packard, Siemens, and the New Media Council. The European Grouping of Societies of Authors and Composers (GESAC) represented collecting societies, the Federation of European Publishers (FEP) publishers, and the European Consumers‚ Organisation (BEUC) consumer interests.

In March the Group had agreed to focus on five issues:
  • Interoperability requirements
  • Acceptance and trust by users
  • Migration to legitimate services
  • Impact of DRM on existing rights management approaches, in particular levies
  • Assessment of some DRM applications
From this list, the report includes only three topics, in which the „Interoperability“ issue has been dealt with rather extensively, while the chapters „Private copying levies and DRM“ and „Migration to legitimate services“ are relatively short.

Interoperability and open standards
The fact that the 16 actors involved agreed on the need and importance of interoperability and open standards to overcome the current situation can be regarded as a success in itself. While currently content providers license their catalogues to different technological systems with incompatible DRM systems, as described by the HLG, interoperability would enable consumers to choose among different devices and to use content with different services and devices. Content providers would not depend on one distribution channel, and device manufacturers have the advantage that their products can be used with different services (p. 10). Standards by the Open Mobile Alliance (OMA), the Motion Picture Experts Group (MPEG) and by the Digital Video Broadcasting project (DVB) are seen as examples of open standards relevant for DRM systems (p. 7). As there are however obstacles to establish open standards, the HLG recommends to the European Commission and the Member States to support the development of open standards (p. 13).

Besides open standards, the development of new concepts is seen as fundamental by the group to achieve interoperability among devices that incorporate DRM systems. Special emphasis is given to the „authorised domain“ (AD) concept in the context of the DVB activities or the „digital home“ concept of Digital Living Network Alliance (DLNA). These concepts refer to personal spaces in which authorised content may circulate, e.g. from the living room hi-fi system to the car, to the MP3 player etc.

“Private Copying Levies and DRM“ as well as „Migration to Legitimate Services“
The second chapter of the report addresses the relationship between levy schemes and DRM. In general, levies are intended to grant a fair compensation to content producers or rights holders for private copying. The widespread application of DRM has the potential to alter the role of levy schemes, since the compensation would be enabled by individual DRM-based licensing contracts. Although the report states that DRMs are the way forward, it is cautious with respect to „adapting existing levy systems“ and argue that adaptation should be made on a case by case basis taking specific devices and services, the application situation and the specific amount of private copying into account (p. 15).

The third chapter is on ways to accelerate the use of commercial online services and products, in particular by encouraging migration from online file sharing services.

Why BEUC did not support chapters two and three
The only consumer organisation involved, BEUC, does not support the arguments and recommendations on „Private Copying Levies and DRM“ and „Migration to Legitimate Services“. Inquired by INDICARE, a representative of BEUC pointed to the one-sided stigmatisation of private copying and file sharing in these chapters, which was not acceptable for the consumer organisation. The lawfulness and benefits of private copying for consumers and the many options of P2P networks for others than illegal usages for sharing copyrighted material, e.g. for the promotion of content, were not acknowledged in a balanced way. Regarding the substitution of levy systems by widespread use of DRM-based individual licensing, BEUC points out obscurity on by whom and how it should be judged that DRM solutions are fully operational and are adequate to justify adaptations of the levy schemes.

Bottom line
From the report, one can observe the strong interest of all the actors involved to avoid situations in which specific DRM technologies become gatekeepers or bottlenecks to digital markets. All in all, the intensive work on interoperability seems to have been at the expense of other issues interesting for consumers, i.e. the envisaged consultation on consumer trust and confidence aspects that has been postponed for further discussions. The Commission announced to start a wider consultation of all stakeholders on the report, to feed the results into other fora, and to convene a follow up meeting of the HLG in November 2004 (p.3).


About the Author: Carsten Orwat is researcher at the Institute for Technology Assessment and Systems Analysis (ITAS) since 2000. He holds a diploma and Ph.D. in economics. He has been involved in several research projects dealing with e-commerce and digital goods. His long term research interest focuses on the economics of information goods. Currently he is co-ordinator of the EU-funded project INDICARE. Contact: + 49 7247 826116,

Status: first posted 23/07/04, updated 28/07/04, included in INDICARE Monitor Vol. 1, No 2, 30 July 2004; licensed under Creative Commons