29Dec2010

France may tax non-Windows tablets, spark Archos lawsuit

France may soon approve extending a levy that could charge extra for the iPad and most other high-end tablets, a local trade publication warned late on Monday. The country would expand an anti-piracy levy already covering smaller devices to charge as much as 12 euros ($16) extra for any tablet running a non-desktop OS and with more than 40GB of storage. Only Windows tablets would be completely exempted, although the Galaxy Tab’s 32GB cap would keep it exempt in its current form as well.

A vote confirming the levy extension is due January 12.

If passed, the measure would likely trigger a near-immediate lawsuit from Archos. The tablet maker depends on its home country for much of its business and could stand to lose 20 times more money to French levies than it does today. Payments reached a relatively mild three million euros ($3.93 million) in 2009 but would surge to 58 million euros ($76.05 million) in 2011.

Archos CEO Henri Crohas argued that the levy extension would not only cripple a domestic electronics designer but showed a fundamental lack of understanding of how tablets work. One of the company’s Android-based tablets was more of a mini-computer than other tablets, the executive said. As an example, he noted that many peripherals that would work on a regular computer would work on the tablet, and users could change the OS on Archos’ devices where the iPad and other tablets were officially locked to one platform.

He added that the claims of compensating piracy were somewhat hypocritical and that a Windows tablet, with a full file system and pirate-friendly apps, was more likely to be used for the task. Mobile platforms like Android and iOS often have less flexibility in their apps and file management. “How could we seriously say that a tablet with Windows is less responsible for private copying than Android?” Crohas asked.

Although not mentioned, anti-competitiveness may play a role as it would unfairly favor Windows 7 tablets at the high-end while forcing most companies to stay below 40GB to qualify or else charge a higher price.

Any legal action should be supported by France’s consumer electronics manufacturing union, Simavelec. It has already had a number of victories over existing levies, although some of these are symbolic more than real. [via TechDirt]