Euro Perspective on Outdated DMCA: Cycling on the Autobahn

 

Cycling on the Autobahn

Would you cycle on a busy motorway? Probably not – and in most jurisdictions, you would promptly be arrested if you did. What does this have to do with the Internet? Quite a lot, actually. Road traffic rules and regulations are a prime example of rules which have adapted to changed circumstances over time.

Guest post by Volker Rieck

History is made very quickly on the Internet: eight years count as a generation. In real life, generations are significantly longer: family researchers see thirty years as normal, roughly the usual age gap between parents and children. So 20 years of evolution on the Internet, 2.5 generations, correspond to 75 years in human time.

Playing around with numbers like this may help us understand the limitations of current Internet regulations. Applying these regulations devised around 20 years ago (or two and a half Internet generations ago) today is (in analogue terms) like using rules from the time when radio was an emerging technology to regulate today’s streaming web radio and podcasts.

Am I online yet?

The US Digital Millennium Copyright Act (DMCA) and its European counterpart, the E-Commerce Directive (anchored in German national legislation in the Telemediengesetz [Telemedia Act, TMG]) were both drafted around 1997.

To understand the intentions of legislators back then, we need to turn back the wheel of history by around 75 analogue years. In 1997, the Internet was still learning to walk. It had not yet gone on to develop by leaps and bounds into a creative teenager and then into big business. Back in the late 1990s, the opportunities it offered were limited and easy to keep track of: Internet access was paid for by the minute. Some readers will, perhaps, remember finding CDs from AOL promising free minutes in their letterboxes on an almost weekly basis.

People mostly wrote emails offline and sent several once they were online again with their screaming 33.6k dial-up modems. Numerous Internet magazines existed: their website ratings could be perused offline in order to whittle down the number of sites to be visited online later and to avoid wasting expensive minutes on fruitless searches. Time was, quite literally, money.

Downloading a 100-MB file – corresponding to less than 10% of the volume of a Game of Thrones episode – took around an hour, and uploading the same quantity of data could go on for up to eight hours. Today, fibre-optic connections can handle the same volume in ten to twenty seconds. Using the Internet was fundamentally more complicated, more time-consuming and more expensive than we expect it to be now, in 2016. Desktop PCs, generally located in offices and home offices, were the gateways to the online world. Only visionaries could imagine accessing the Internet via smartphones or tablets.

Old times, old rules

The US Digital Millennium Copyright Act (DMCA) and the European E-Commerce Directive aimed to remove stumbling blocks that threatened to slow the rapid evolution of the Internet and to choke off its promise.

American legislators, in particular, anticipated that the Internet would generate commercial opportunities and saw the need for particular regulations covering copyright infringements.

US legislators and their EU counterparts implemented a notice & take down process: if a website was in breach of copyright, the rights holder could simply notify (serve notice) to the site operator or web services provider. The process was designed to cater to the particular needs of providers handling user generated content. The operator or provider was only obliged to remove (take down) infringing material at this point – providers enjoy safe harbour protection under which they are not liable for infringements. Fair enough.

This made sense at the time and in the context of an Internet which was more like a child’s bicycle than a Formula 1 racing car. Copyright infringements were seen as unintentional, as unfortunate coincidences. As monitoring the online activity of citizens was an unattractive proposition, it made sense to exonerate their unwitting accomplices.

Today, we know that user generated content consists almost exclusively of user uploaded content, most of it protected by copyright. We also know that the actions of the users’ accomplices today are far from unintentional. The Internet, fortunately or unfortunately, does not consist entirely of home videos of cute cats.

New times, still old rules

The safe harbour privilege limiting provider liability has now governed web traffic for 20 years – two and a half Internet generations.

In the meantime, the Internet has got faster and noisier. It has also become a considerably more hostile environment for rights holders. But decisive legislative change or adaptations to this process of digital evolution have been lacking.

The consequences for the creative economy have been little short of disastrous in some respects. As data transmission rates have climbed higher and higher, ever more creative “business models” have also emerged, fostered not least by the robust legal protection afforded to players in this area in the form of the safe harbour privilege.

Kim Schmitz, for example, came up with the file hosting service MegaUpload. Schmitz sold access to his service and to servers jam-packed with illegal downloads. He generated an estimated 150 million EUR from this activity before MegaUpload was spectacularly put out of action by law enforcement in January 2012.

(http://www.heise.de/newsticker/meldung/Razzia-gegen-Megaupload-FBI-laesst-Kim-Schmitz-verhaften-1417529.html).

Criminal proceedings against Schmitz (aka Kim Dotcom) have yet to take place in the US. It seems unlikely that copyright infringements will play a significant role; it is more plausible that the prosecution will focus on customs offences and money laundering.

But platforms such as YouTube also draw considerable benefit from the dubious privilege freeing them from all responsibility for uploaded content. With liability excluded, YouTube can view content uploaded by its members with relative equanimity: if the content is protected by copyright, rights holders are free to get in touch with YouTube and have it taken down, and if nothing is heard from them, YouTube can assume that nothing is wrong.

Rights management has effectively been outsourced to rights holders, and YouTube can quietly get on with exploiting user uploaded content to generate advertising revenue without needing to monitor this content, pay staff to do so, or entertain troubling thoughts about its role. No watchdog duties, no tedious licensing and rights clearance enquiries.

The birth defects of DCMA and Directive 2000/31/EC

DMCA and the E-Commerce Directive have several serious flaws:

  1. No binding timeframe for resolving issues

No binding rules exist to specify the maximum time period within which providers must investigate reported infringements (notices) and remove offending material (takedowns).

  1. Uploaders protected, rights holders left defenseless

What happens when disputes arise? When, for example, the rights holder serving notice is not recognized as such? Or the uploader maintains that rights have been legitimately acquired and submits a counterclaim? Disputes involving YouTube footage regularly feature such claims and counterclaims.

Bizarre cases arise in which YouTube even advises the parties to seek judicial resolution. This advice is distinctly unhelpful, especially when the uploader in question is located in a different country, invulnerable to legal action – or, indeed, completely anonymous. Protected content can be uploaded to YouTube from an anonymous Gmail account.

  1. Up again! (Whack-a-Mole)

Cases relating to new uploads of works which have already been taken down are ignored in current legislation. The consequences of this flaw are severe: practically every work that can be downloaded from, among other sources, the file hosting services that have taken on the mantle of MegaUpload becomes available again and again. What is taken down rarely stays down, and once content is uploaded again, the entire process begins afresh for rights holders.

  1. Law that is not enforced might as well not exist

Failing to delete content has no consequences in either system;

stakeholders whose actions are illegal have practically nothing to fear.

Courts in Germany have begun to develop the law further and address its obsolescence. A number of recent judgements have demonstrated that judges are aware of this weak point and willing to impose monitoring duties on file hosting services.

But these hard-won judgements relate only to individual cases, and some of these cases have already dragged on for years. During that time, moreover, the mentality of users has changed: users are now utterly habituated to operating in a legal vacuum. Investments cannot be recouped in this climate. Value loss and value transfer result.

  1. Nobody is responsible for anything: diffusion of responsibility

In the (online) world which has been created in this way, the buck stops with nobody: neither platforms nor operators of web services/pages nor users are held accountable and liable for rights infringements.

To make matters even worse, legislators have expressly insisted that the anonymous or pseudo-anonymous use of such platforms and websites must be permissible.

 

The consequences of these five design flaws are well known. They have caused disruption to almost every sector in the creative economy. The process ultimately leads to value being siphoned away from originators and their marketing partners and transferred to platforms and website operators. The work of content creators and their partners is no longer recognized as valuable: the services of – legal and illegal – distributors are now rated more highly.

YouTube is a perfect example for this, as are the file hosting sites. It is estimated that the latter group comprises more than a thousand sites with millions of users spread across the world. These sites generate vast revenue through advertising and/or selling premium access. Only a tiny proportion of this revenue, if any, reaches content originators, who are usually left entirely empty-handed.

We can take to the streets to address this – let us return to our traffic analogy. What would traffic look like today if it were regulated with laws from 2.5 analogue generations ago – from, in other words, the 1940s?

After World War II, around 1.2 million motor vehicles were in use on German roads. Today, over 45 million motor cars are registered in Germany. Nobody had heard of zebra crossings 70 years ago – and cycling on the motorway, introduced when fuel shortages bit in 1943, was still allowed.

As traffic levels increased dramatically, road traffic legislation was regularly overhauled to address new hazards. Many regulations that seem self-evident to us today (30 mph speed limits, shoulders, traffic lights, blood alcohol limits, licence plates) have resulted from this process of continuously evaluating and overhauling traffic rules.

Astonishingly enough, however, the regulation of the Internet has not been tackled in the same way. We have relied on DCMA, the E-Commerce Directive and the national legislation implementing EU rules (such as the German Telemedia Act) for too long. Rules have not been adapted in a timely fashion to address new circumstances. The result is that the Internet, to stick with our traffic metaphor, is still full of people cycling on the motorway with no fear of being picked up by law enforcement. People who see red traffic lights as mere suggestions.

Levelling the playing field

Multiple sectors in the creative economy have already recognized and analysed the issue. The Motion Picture Association (MPA) has, for example, demanded that the DMCA provisions be overhauled.

The music sector, representing over a thousand composers and artists, has complained to the European Commission.

http://www.spiegel.de/kultur/musik/youtube-1000-musiker-beschweren-sich-bei-der-eu-a-1100643.html

These different sectors are all raising their voices to insist that a long-overdue evaluation of liability rules must be carried out now that 2.5 Internet generations have already passed.

This evaluation is necessary to prevent the increasingly one-sided transfer of value and to ensure that legislators create clear and fair regulations capable of levelling the playing field and putting stakeholders on a more equal footing.

One of the main sticking points will be the safe harbour privilege. Liability rules urgently need to be completely overhauled and adapted to current circumstances. This will not be easy, but now that the digital equivalent of three-quarters of a century have already elapsed, it is time to grasp the nettle.

Everybody demanding revised copyright legislation should also, in the same breath, demand the overhauling of the area of liability.

Otherwise we will continue to encounter the digital equivalent of cyclists on the motorway – and the damage resulting from our inaction will continue to mount.

 

Volker Rieck is Managing Director of the content protection service provider FDS File Defense Service. He is an expert on issues pertaining to the unregulated distribution of content on the Internet. FDS is active on behalf of numerous rights holders and also supplies data to law enforcement authorities and to industry associations engaged in research in the area.

2 thoughts on “Euro Perspective on Outdated DMCA: Cycling on the Autobahn

  1. Encouraging to see the possibility of global agreement to long overdue changes to the DMCA and its’ European counter part. If we fail to make changes, the future of anything that looks like a sustainable creative community will totally implode.

  2. Pingback: Euro Perspective on Outdated DMCA | Waldorf Frommer News

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