The European Union is moving to defuse a clash between technology companies and national agencies over who should collect payments for digital royalties.

The battle is brewing between companies that use digital rights management (DRM) services – such as Apple's FairPlay – that limit copying, and royalties collection societies in individual European countries that are seeking to impose new fees on digital devices, such as the iPod.

Chairman of the DRM and copyright task force of the European Information, Communications and Consumer Electronics Technology Industry Association Jens-Henrik Jeppesen told the International Herald Tribune (IHT): "Europe has to decide if it wants to go for DRM or go for a taxation model, but consumers should not be hit with both."

There are concerns that as levies are increased, consumers using DRM systems that incorporate payment systems may find themselves paying royalties twice – once when they purchase new digital recording equipment, like the iPod, and again when using a downloading service that uses digital rights management.

But levy collection agencies and the IFPI (an international recording industry group), argue that it will be years before DRM is widespread enough to ensure copyrights are adequately protected and that in the meantime levies are playing a crucial role. European legal counsel for IFPI Olivia Regnier told IHT: "Not everyone is paying twice - there are still plenty of cases where there is no payment and no levy."

In France, Apple is already being threatened with a levy for its iPod because the player is considered a copying device. Apple has refused to pay the levy and the Society of Music Creators, Composers and Publishers is threatening to take Apple to court.

Levy lobby
The European Commission, the executive arm of the EU, is planning to address the concerns next week by adopting a policy paper that it says would "bring the national collection agencies into the 21st century."

European Commission spokesman on the internal market Jonathan Todd said: "The paper will also examine the extent which DRM may eventually replace remuneration schemes like levies."

The policy paper will also raise the possibility of pan-European licensing of music and other content downloaded from the Internet, allowing services like iTunes to be introduced quicker throughout Europe, according to IHT.

A number of lobby groups are backing the commission's efforts, including the consumer electronics technology group, which represents 10,000 companies in Europe, including Apple, and the digital media organization.

According to IHT: "These groups say the introduction of pan-European licensing would allow companies offering online music to avoid negotiating with 15 different collection agencies, which can take years."

But reducing the power of the politically powerful collection agencies is a highly contentious issue - and one that is unlikely to be resolved anytime soon, the report concludes.