French authorities will reduce a copyright levy imposed on music players containing flash memory, perhaps as early as next week, according to a source familiar with the plan.

The move will reduce the levy on a 4GB iPod nano from over €50 to about €8, the source said.

Apple can't yet predict how this will affect the retail price of the iPod nano in France, a spokeswoman for the company said.

In France, as in some other European countries including Germany and Italy, it is legal to copy music for private use - but in return the law imposes copyright levies on blank media, including cassettes, CDs, DVDs, hard drives and flash memory devices. The copyright levy is intended to compensate composers, performers and producers for revenue opportunities lost due to private copying of music.

December 1 deadline mooted

Last week, the French Commission on Private Copying adopted a proposal to reduce the levy on flash memory devices, aligning it with the levy on hard disk drives, the source familiar with the plans said. The decision is widely expected to be published on December 1 in the Official Journal, where French laws and regulations must appear before they take effect.

The French laws and levies have been revised several times before to deal with advances in technology, but the levy on flash memory devices dates from 2001, when flash storage devices typically had capacities of under 64MB. In the case of the 4GB iPod nano, though, the French copyright levy adds up to a whopping €51.44, or 16 per cent of its €309 retail price. Proportionally, the copyright levy for music players with a hard disk drive is much lower: €23.92 for the 60GB iPod.

The 4GB iPod nano costs €60 more in France than it does just a few kilometers away over the German border, in part due to the copyright levy. Another factor is the difference in the rates of value-added tax (VAT), a form of sales tax, between the two countries: the rate is 19.6 per cent in France, and 16 per cent in Germany.

Price around the world

Germany is one of the cheapest places to buy a 4GB iPod nano. There it costs €249.01 retail price including a copyright levy of €2.74 and value-added tax (VAT) of €34.35, according to Apple's German online store.

Apple's online stores won't let French shoppers dodge national taxes and levies by buying from the store for a neighbouring country. But even though German stores are just a short drive away, it appears French shoppers in border areas would rather buy at home or wait for the levy to be reduced, according to one German Apple dealer.

"There's no French version of the iPod, no German version. It's an international product," said Hans Spiegel, who runs Macservice Hans Spiegel, an Apple dealership in the German town of Offenburg, just 25 kilometres from Strasbourg, a French city with a population of around half a million.

Yet despite the proximity and the potential €60 saving, Spiegel has had no French buyers lately for his stock of iPod nanos, he said Thursday.

Other countries with no copyright levy are more expensive than Germany. In Austria, Ireland and the Netherlands, Apple indicates no copyright levy in the online price for the same device, yet there it is €10 more expensive, at €259.

The Italian retail price of €269 includes a copyright levy of €7.45, according to Apple.

Outside the euro zone, price comparison becomes harder due to exchange rate fluctuations. The UK retail price of £179 is around €261, while the US price of $249 equates to around €211. Neither of these countries impose copyright levies.