Friday, February 29, 2008

ORG campaigns against EU copyright term extension

Open Rights Group, in association with the EFF, is launching a new campaign to oppose the extension of the copyright term, brought back to the table by EU Commissioner McCreevy's proposal to nearly double copyright terms for sound recordings in the EU. ORG says that to “help the EU's decisionmakers understand how bad an idea for innovation and the future copyright term extension is, we need as many people as possible to hear about the sound copyright campaign, and sign the petition
They have also started a new website explaining the issue and also say that they’ll “use your support to lobby individual Commissioners, and to ensure that this misguided policy is rejected”.

More here and here

Friday, February 15, 2008

Musicians, fans and online copyright

Next month the issues discussed in the previous post will be treated in the conference/debate/meeting on Musicians, fans and online copyright on Wednesday, March 19, 2008, 2:00 pm - 5:30 pm at the Old Theatre of the London School of Economics. Ian's email says:

Is home downloading killing music? Should Internet Service Providers monitor customers to try and spot copyright infringement, and disconnect downloaders? Do musicians need new laws to benefit from the opportunities of the Internet?

Join us to debate these questions and more with leading copyright thinkers from the music world, government, consumer groups and universities. Confirmed speakers include John Kennedy (CEO of IFPI), Paul Sanders (Director of Strategy at Playlouder), Becky Hogge (Open Rights Group), Lilian Edwards (Southampton University), Rufus Pollock (Cambridge University) and Michelle Childs (Knowledge Ecology International).

So, see you in LSE!

Thursday, February 14, 2008

The unintended consequences of three strikes rule (or using the law to guarantee profiteering)

Two days ago England woke up to the unsavoury news that users were going to have their Internet connection service suspended or terminated if they were caught three times illegally downloading protected content. It is difficult to write or think calmly about the issue because it shows how prostituted the political process has become in many if not most countries around the world. While it seems quite straightforward and for some even fair that if you commit three times the same tort and/or crime the means to keep committing it should be taken away, the question is, is it that simple? Do the creative industries in particular and knowledge industries in general really benefit from this? Or is it yet another instance where the misguided advice of a very small group of industry players with deep pockets determines government policy? Furthermore, doesn’t it violate many established principles of law, existing law and further divorce common people from the concept of the rule of law?
Although it has been repeated hundreds of times in many places, it is unavoidable to re-emphasise the fact that the alleged “billions of pounds” that the industry loses due to piracy are the product of some weird, and probably drunken, fantasy. The industry counts every download as a lost sale and in addition, outrageously, counts the whole price of the downloaded material as potential profit (I hope that I don’t need to remind to anyone where Enron ended for engaging in that type of accounting). Following the poster-child example of the music industry, do you remember the case of Brianna LaHara who was sued by the RIAA for downloading thousands of songs while living in a Housing Authority apartment and being 12 years old? Do you think that those thousands of downloads displaced real sales? Do you really think that she could afford those thousands of songs? Well, those thousands of songs are between the "loses" that the entertainment industry claims is having...
There is an array of explanations as to why the music industry’s sales and profits are lower than in the 1980s and 1990s, and most of them refer to the fact that during those years the sales and profits were unusually high. The main reason for that were the popularisation of the CD and the desire of people to own also in CD music that they already owned in vinyl, which resulted in several generations buying music at the same time. Then, and at the same time, an also unusual expansion of the music market due to the endless promotions carried out through music videos and FM radio, and all that coupled to the fact that the 80s and 90s saw an almost constant stream of very good musicians producing very good music. And all that is compared with the current market where consumers have a wealth of entertainment alternatives, as Internet and video games, and, with few notable exceptions, music that does not outstand for its quality. But somehow, all this information get lost in the way to policy makers and they only seem to hear that music is loosing billions and that is due to Internet. Finally, there are some arguments that point exactly to the opposite, that those that download music in peer to peer networks and can afford it (probably the key issue missing from the entertainment industry analysis), go then to buy more music than they would have bought without downloading and testing first. So, the first step is to identify proper industry players that really care for the health of the industry and not for the big bonuses that they would get next year if they managed to rip unwarranted profits, to then analyse properly whether Internet is a curse or a bless for the entertainment industry.
The legal issues are more complex and deeper, but equally (actually more) troubling. The three-strike and down proposal implies a fundamental breach of humans rights law, because it establishes a system of summary justice without the necessary guarantees of due process (in this side of the Atlantic called right to a fair trial and enshrined into Art. 6 of the European Convention of Humans Rights for both civil and criminal procedures, incorporated into UK law by the Human Rights Act 1998). It goes further for interfering with the contractual relation of the user and the ISP in order to protect the interests of a third party that has others remedies available, with the aggravating circumstance that it imposes a financial cost on the ISPs to protect the profits of a third party. It unduly imposes limits onto the provider of a medium as to how that service should be provided based on inferences and dubious data (for the reasons explained above). Just an example to show how preposterous the proposal is, there is no public road in England where cars are allowed to drive above 70 miles per hours, but there would be a public outcry of the government decided to ask car manufacturers to limit the speed to what is lawful to drive in the country, and in this case the deaths produced in car accidents, the increased oil consumption and the impact on the environment are not fabricated numbers like those used by the entertainment industries. But what it probably would have a deeper impact in English society and in the really creative industries is the fact that, once again, the government undermines the rule of law (the principle for which no one is above the law and the same system applies to the whole society).
We need to clarify the meaning of certain statements to properly visualize the situation. It is clear that if the technology existed to 100% guarantee that every time that somebody downloads protected content the industry received the price that it has decided, the industry would be more than extremely happy to allow downloads, so when the industry says that it opposes the unauthorized downloading and sharing of protected content, what it really means is that it opposes the downloading and sharing of protected content without paying the corresponding fee, which takes out the issue of authorization and lets us precisely define the proposed rule as a principle where when a person (physical or legal) uses three times protected content without paying the corresponding fee that person should be banned to use the medium used to carry out such action. Is the industry and the government suggesting that MGM and New Line should be banned from producing or distributing films in England because that is the medium that they used to, according to a recent lawsuit, use a protected work without paying the corresponding fee? Somebody may be thinking that I am confusing tortious liability (copyright infringement) with contractual one (not paying the fees agreed in a licence agreement) and that I should give back my recent award, but I do know the difference and I still think that once we move out the veil of legal classifications (they are both breach of obligations) the previously mentioned principle applies and makes clear that not lack of authorization but lack of payment is the issue. Furthermore, and keeping it within the tort of intellectual property infringement, is the government suggesting that if a company is found infringing patents three times will be struck from the Companies House registry and banned from trading in the UK? If not, are we, in addition of violating human rights and interfering with third parties contracts, creating a two tier system where the weakest part of the society gets harsher treatment and the strongest does not need to obey the same rules?
I thought that our girls and boys were killing and dying in Iraq because we were against that type of society…

Monday, February 11, 2008

Still no light in the social networking sites business model

The news that Google has announced that its results were quite below expectations in the Google-MySpace advertisement’s deal has lead many to think that the almighty Mountain View’s company is loosing its Midas’ touch. However, I think that the news actually confirms what many have said, that that social networking is a very good idea and quite good for the users, while nobody has found how to make money out of it.
Last week, while explaining to a group of students during the first law class in the first week of the degrees the importance of the law in designing a business model, I used the example of Facebook to show that things that make sense on paper may not make sense in reality and those that make sense in reality may not make sense according to the letter and spirit of the law, which renders them not viable (remember Napster?). The students’ answer was that there was not such a big issue in Facebook because they were going to start making money out of advertisement as Google and, therefore, the model and its legality had been properly tested. My answer was two pronged: I first asked how many of them had ever clicked on a Facebook advertisement (the answer was none) and then warned them about the academic validity of anecdotal evidence like that. But Google’s news goes beyond the anecdotal…
So, how to make money if you own Facebook, MySpace or any of the others? The idea that Murdoch should be happy because it got U$S900 million from Google from advertisement space that made quite less than that, is simple wrong and based on the current culture of very short term gains. Even in the mid-term the news should be bad for Murdoch too because next time that he sits to negotiate with Google, or anyone, they will show him the numbers and if Google couldn’t, he will have to be very persuasive to convince others that they will be able to make money out of adds on social networking sites, which brings us back to the question of how to make money…
The almost obvious answer is to use the wealth of information that these sites collect about the users, either directly or through the applications. Just as comparison, if you put together the information you give about you with the one that can be inferred from your choices in applications, what you have given would make the Total Information Awareness program (stopped by the US Congress due to its privacy invasion features and its very dubious legality) look like a kindergarden’s science project. The combination of information that users give to the sites and the rights the users give to the owners of the sites would constitute the ultimate weapon for marketers and there are some arguments to say that there is no way to collect such an almost perfect consumer profile even if you are asked to write pages and pages of your preferences (some applications, when combined, would give a very precise picture of your interests and preferences that goes beyond what you consciously know about yourself, without even mentioning that it is almost impossible to get out of some of these sites). But, would that be legal?
While, oversimplifying, in the US there seems to be agreement about the ownership of the data being on the companies hands, the European view is quite more complex. It could be argued that when users accept the terms of service they are giving the agreement required under EU law for the processing of personal data, the fact that sensitive personal data is bundled with the non-sensitive information seems to change completely the game (and, again, EU law gives you the right to "leave" with your data, which seems to not be possible in Facebook). In the case of sensitive personal information, like political views, religious believes and sexual orientation (this later being deducted by combining interests), the law would require express consent and in each case, which becomes further complicated when the plan is to sell or share the information with non-European companies (even if the are part of the safe harbour agreement). It could be argued that this previous analysis does not preclude the use of the data for marketing purposes, but it seems that, if the business model is based on its use, the expectations would have to be lowered and the dance of billions that people think these networking services will provide are simple fantasy. Any proposed business model should get a balance between what can be lawfully used without requiring users agreement and how far the users want to go in order to enjoy the sites, and, while such a balance is reachable, the result would probably give a still healthy but lower rate of return on the investments.