The Trichordist

The Government has been defeated in the Lords over measures to protect creatives from having their copyrighted work used to train AI models without permission or remuneration. [The House of Lords is the “upper chamber” of the UK Parliament, similar to the US Senate.]

Peers [Members of the House of Lords] voted 145 to 126, majority 19, in favour of a package of amendments to the Data (Use and Access) Bill aiming to tackle the unauthorised use of intellectual property by big tech companies scraping data for AI.

Proposing the amendments, digital rights campaigner Baroness Kidron said they would help enforce existing property rights by improving transparency and laying out a redress procedure.

The measures would explicitly subject AI companies to UK copyright law, regardless of where they are based, reveal the names and owners of web crawlers that currently operate anonymously and allow copyright owners to know when, where and how their work is used.

Read the post on PA Media

January 29, 2025 by Trichordist Editor

Know Your MLC: Highest Compensated Employees 2023 #TheReup

The MLC, Inc. has to disclose its “highest compensated” employees on its nonprofit Form 990 tax return for 2023. The Copyright Office was supposed to be reviewing public comments on whether the MLC, Inc. should be renewed for another five years or if the party is over. That review has been going on for a year now, maybe they forgot? The party is obviously still going strong.

January 23, 2025 by Trichordist

Understanding Trump’s TikTok Trolling: Crazy or Crazy Like a Fox?

By Chris Castle

Let’s be honest–it may look like things are getting weird with TikTok and Bytedance, but let me suggest things are maybe even weirder than they appear. New information has come to light.

First of all, I think it’s clear that at least as of January 19, the Protecting Americans from Foreign Adversary Controlled Applications Act will make it unlawful for companies in the United States to provide services to distribute, maintain, or update the social media platform TikTok, unless U. S. operation of the platform is severed from Chinese control which basically means owned by Bytedance. It’s potentially clear–although the situation is changing daily in Trump time–that the statute may also ban a number of other data-scraping apps owned and distributed by Bytedance that have problems and addictive properties similar to TikTok.

After TikTok’s faux shut down, President Trump immediately got into the act to “Save TikTok”. His first move was to post on social media that he would issue an executive order today “delaying” the effectiveness of the Act. Mr. Trump’s statements may have seemed a bit disjointed because from a statutory point of view, the President does not have the authority to “delay” the effectiveness of the Act. In fact, that is exactly what the Supreme Court just refused to do.

But “Saving TikTok” may not mean saving TikTok if you catch my drift. Saving it for whom exactly?

This may all seem rather bizarre, but if you read President Trump’s “Friend of the Court” brief filed during the Supreme Court’s review of TikTok’s request for a delay in enforcing the Act, it would all be clear–maybe–because that is exactly what he asked the Supreme Court to do–delay the effective date so the could apply Art of the Deal principles to the situation. This is, of course, not what the Supreme Court really is about, but it does reveal what was on his mind. The President says:

In light of this Court’s well-placed concerns about the “highly expedited” resolution of novel, difficult, and “very significant” constitutional questions…the Court should consider staying the statutory deadline for divestment and taking time to consider the merits in the ordinary course. Such an approach would allow this Court more breathing space to consider the merits, and it would also allow President Trump’s Administration the opportunity to pursue a negotiated resolution that, if successful, would obviate the need for this Court to decide these questions.

When a statute has been duly passed by Congress and signed into law by the then-sitting President (Biden) and upheld by the Supreme Court, the next President as chief magistrate must likely enforce the law under the “Take Care” clause of the Constitution (“take care that the laws be faithfully executed” in Article II, Section 3 for those reading along at home).

Of late there has, of course, been an unfortunate reliance on what I think is a misinterpretation of “prosecutorial discretion” that I personally find loathsome and flat out wrong. Prosecutorial discretion historically has been decisions based on resources and the strength of the evidence in particular cases; doing otherwise often results in the prosecutor getting unelected (see, e.g., Chesa Boudin and George Gascon). We’ll see if this dubious practice will continue.

Without getting into the entire history of executive orders that exceed presidential authority, there isn’t a clear precedent for a presidential executive order actually limiting the enforcement of an act of Congress that has been upheld by the Supreme Court (like the TikTok divestment). One notable and frequently cited case is Youngstown Sheet & Tube Co. v. Sawyer (1952), where the Supreme Court struck down then-President Harry Truman’s executive order to seize control of steel mills during the Korean War. The Court ruled that President Truman lacked the constitutional or statutory authority to issue such an order in a somewhat but not entirely similar situation to TikTok. In general, executive orders are subject to judicial review, and it is pretty old news that the Supreme Court has the power to strike down executive actions that exceed presidential authority or violate the Constitution. That principle of US law was established in 1803 by our first Chief Justice of the Supreme Court.

Having said that, I do understand why President Trump is trolling TikTok, or at least I think I do today. As he said in a speech to his supporters regarding a solution for TikTok’s problem (and has repeated a number of times since his inauguration):

So I said very simply, a joint venture. So, if TikTok is worth nothing, zero without an approval, you know you don’t approve, they’re out of business, they’re worth nothing.

If you do approve, they’re worth like a trillion dollars, they’re worth some crazy number. So I said, I’ll approve, but let the United States of America own 50% of TikTok. I’m approving on behalf of the United States.

So they’ll have a partner, the United States, and they’ll have a lot of bidders and the United States will do what we call a joint venture. And there’s no risk, we’re not putting up any money. All we’re doing is giving them the approval without which they don’t have anything.

As I’ve said before, President Trump has all the leverage that anyone could have in a situation where the Chinese Communist Party has their eye fixed on an IPO on the New York Stock Exchange. Not to be conspiratorial, but I do find it interesting that shortly before the Supreme Court decision, Softbank’s CEO committed to investing $100 billion in the US–Softbank being a major investor in TikTok and a beneficiary of that IPO and the same CEO just committed a portion of $500 billion to the Stargate AI infrastructure investment alongside Oracle and OpenAI.

I do think that someone might challenge any executive order that is inconsistent with the Truman precedent in the Youngstown Supreme Court case. The Supreme Court could probably strike down such an executive order. In the meantime, President Trump will likely be trying to close a deal to sell TikTok and destroy the CCP’s connection to user data. At some point, Congress may have to get involved again to bless whatever the final deal is.

So could Trump pull this off? Oh, yes, he could. It would be unusual, but not impossible in my judgement. Murky, yes. But when the dust settles, it looks like TikTok doesn’t have much of a choice. They will either hand over 50% of its company to the US (either in the form of voting power (like “golden shares“), stock or a financial interest), or they can shut down. And it may not just be TikTok–it may be all of the Bytedance companies that have a TikTok problem. Even though giving up a 50% share would essentially cut in half any ownership stake of Softbank, there may be some tolerance given that the alternative is zero–not just for TikTok, by the way, but potentially all of the Bytedance companies.

Is giving up 50% of your company because your lawyers and lobbyists failed a happy thing? Do you think Xi Jinping is in the habit of giving a hug when someone he’s paid a fortune to fails miserably? Not really. I would not want to be the food taster for TikTok’s head lobbyists.

Of course, the US should not take on any of TikTok’s obligations or litigation, such as the Multidistrict Social Media Addiction Litigation which potentially has massive liabilities for TikTok. TikTok’s benefit from social media addiction should not be lost on anyone given the user reaction that TikTok has riled up. Social media addiction is a real thing.

Stay tuned, we’ll see what happens. Whatever happens, it won’t change the fact that TikTok pays garbage royalties if they pay at all.

January 22, 2025 by Trichordist Editor

Confirm Your Mechanical Rates Have Escalated

By Chris Castle

As you probably already know, the statutory mechanical royalty rate for physical or downloads (not streaming) has increased as of January 1, 2025. This means that all floating rate licenses (e.g., not subject to controlled comp rates) should have increased as of January 1, 2025 from 12.4¢ to 12.7¢ due to the Phonorecords IV cost of living adjustment. (And of course should have increased in prior PR IV years in 24.). And of course we have Trichordist readers to thank for helping to persuade the Copyright Royalty Judges to reject the Phonorecords IV frozen mechanical rate settlement that led to the labels agreeing to an increase from 9.1¢ to 12¢ plus a cost of living adjustment on physical and downloads that rose to 12.4¢ in 2024 and now to 12.7¢ in 2025. (But remember there is no cost of living adjustment for streaming mechanicals like Spotify.)

It’s probably just a glitch, but I understand that HFA hasn’t updated the 1/1/25 rates yet for “licensing out” in at least one instance (see screen capture below obtained this week). I’m inclined to believe that the issue is with the database and would not be a one-off, but I could be wrong. That suggests to me that every songwriter and publisher with either a newly issued license since 1/1/25 or a floating rate license in place during PR IV rate period (2023-2027) should probably confirm that the respective COLA escalations have been properly applied as of January 1 of 2024 and 2025. I would imagine that this isn’t an isolated incident, but maybe it is. No reason to let grass grow, however.

Here’s the Copyright Royalty Board’s timely notice of the new rate effective 1/1/25–which means that the HFA system does not appear to have been updated unless the screen capture reflects a one-off which seems doubtful to me.

And for reference, this is the rate for 2024 with the COLA adjustment that may also have been misapplied–everyone would have to check to know if it was misapplied to them.

January 16, 2025 by thetrichordist

Crowd Sourced Charitable Funding and FEMA

If you’re affected by the Los Angeles fires, you may want to determine if you are eligible for funding by the Federal Emergency Management Agency (FEMA). Hypebot has a handy page devoted to resources for those affected by the fires that you can access here.

It’s always a good idea to let FEMA tell you what the current rules are that apply to your particular situation as these may change. The basic rules are available on the FEMA website and are quite extensive. You can access the FEMA rules on FEMA’s website here. This falls under the general heading of “eligibility requirements for FEMA assistance”. This post is not meant to be legal advice, just a heads up about some of the bureaucracy involved with disaster relief.

Some of this involves proving who you are, your citizenship status, residence and a few other things. FEMA lists the kinds of documents they accept to prove eligibility. As these are also the kinds of documents that may get lost in a rushed exit from your residence in the face of a fire or were stored in bank safe deposit box in a bank that burned down, consider how you are going to get these documents together. If you have been blessed enough not to have been affected by the fires, consider organizing these documents in an cloud based or paper folder that you can grab in a hurry or access online at any time (or both).

Sometimes you may be eligible for a crowd funded charitable source of money like gofundme. Realize that this very likely has to be disclosed to FEMA and is addressed in their online FAQ:

When individuals apply for federal emergency aid through FEMA, FEMA assesses their needs and what aid they have already received from other sources. This includes any funds raised through platforms like GoFundMe.

Here’s how it generally works:

Duplication of Benefits: FEMA’s assistance is designed to help individuals and communities recover from disasters, and it cannot duplicate the benefits received from other sources. If fire victims receive aid through GoFundMe or other donations for the same expenses FEMA would cover (like home repairs, temporary housing, medical expenses, etc.), those funds might be counted against the federal assistance they’re eligible for.
Transparency and Documentation: When applying for federal aid, it’s crucial for individuals to be transparent about all the financial assistance they have received. FEMA will require documentation of all income sources, including any funds from GoFundMe.
Types of Assistance: While GoFundMe can provide immediate relief for specific needs, FEMA assistance covers a broader range of recovery efforts. It’s important to understand that FEMA provides different types of aid which might not be addressed by GoFundMe campaigns, such as grants for rebuilding and repair, rental assistance, and other necessary expenses not covered by insurance.

To sum it up:

Setting up a GoFundMe page doesn’t automatically disqualify fire victims from FEMA aid.
It’s important to disclose all received funds when applying for federal assistance to avoid duplication of benefits.
GoFundMe donations might affect the amount of federal aid provided, depending on the use of the funds.

It may help to state that a GoFundMe is to cover items not covered by FEMA with the understanding that you will likely have the need before you get approved by FEMA, and the GoFundMe monies may be available sooner than the FEMA monies. There will likely be a true up between the two at some point.

When in doubt, ask FEMA if you apply for aid.

January 14, 2025January 14, 2025 by thetrichordist

@FTC to AI (and other) Companies: Quietly Changing Your Terms of Service Could Be Unfair or Deceptive

An important position paper from the Federal Trade Commission about AI:

You may have heard that “data is the new oil”—in other words, data is the critical raw material that drives innovation in tech and business, and like oil, it must be collected at a massive scale and then refined in order to be useful. And there is perhaps no data refinery as large-capacity and as data-hungry as AI.

Companies developing AI products, as we have noted, possess a continuous appetite for more and newer data, and they may find that the readiest source of crude data are their own userbases. But many of these companies also have privacy and data security policies in place to protect users’ information. These companies now face a potential conflict of interest: they have powerful business incentives to turn the abundant flow of user data into more fuel for their AI products, but they also have existing commitments to protect their users’ privacy….

It may be unfair or deceptive for a company to adopt more permissive data practices—for example, to start sharing consumers’ data with third parties or using that data for AI training—and to only inform consumers of this change through a surreptitious, retroactive amendment to its terms of service or privacy policy. (emphasis in original)…

The FTC will continue to bring actions against companies that engage in unfair or deceptive practices—including those that try to switch up the “rules of the game” on consumers by surreptitiously re-writing their privacy policies or terms of service to allow themselves free rein to use consumer data for product development. Ultimately, there’s nothing intelligent about obtaining artificial consent.

Read the post on FTC

January 10, 2025 by Trichordist Editor

Does it have an index? @LizPelly’s Must-Read Investigation in “Mood Machine” Raises Deep Questions About Spotify’s Financial Integrity

By Chris Castle

If you don’t know of Liz Pelly, I predict you soon will. I’ve been a fan for years but I really think that her latest work, Mood Machine: The Rise of Spotify and the Costs of the Perfect Playlist, coming in January by One Signal Publishers, an imprint of Atria Books at Simon & Schuster, will be one of those before and after books. Meaning the world you knew before reading the book was radically different than the world you know afterward. It is that insightful. And incriminating.

We are fortunate that Ms. Pelly has allowed Harper’s to excerpt Mood Machine in the current issue. I want to suggest that if you are a musician or care about musicians, or if you are at a record label or music publisher, or even if you are in the business of investing in music, you likely have nothing more important to do today than read this taste of the future.

The essence of what Ms. Pelly has identified is the intentional and abiding manipulation of Spotify’s corporate playlists. She explains what called her to write Mood Machine:

Spotify, the rumor had it, was filling its most popular playlists with stock music attributed to pseudonymous musicians—variously called ghost or fake artists—presumably in an effort to reduce its royalty payouts. Some even speculated that Spotify might be making the tracks itself. At a time when playlists created by the company were becoming crucial sources of revenue for independent artists and labels, this was a troubling allegation.

What you will marvel at is the elaborate means Ms. Pelly has discovered–through dogged reporting worthy of the great deadline artists–that Spotify undertook to deceive users into believing that playlists were organic. And, it must be said, to deceive investors, too. As she tells us:

For years, I referred to the names that would pop up on these playlists simply as “mystery viral artists.” Such artists often had millions of streams on Spotify and pride of place on the company’s own mood-themed playlists, which were compiled by a team of in-house curators. And they often had Spotify’s verified-artist badge. But they were clearly fake. Their “labels” were frequently listed as stock-music companies like Epidemic, and their profiles included generic, possibly AI-generated imagery, often with no artist biographies or links to websites. Google searches came up empty.

You really must read Ms. Pelly’s except in Harper’s for the story…and did I say the book itself is available for preorder now?

All this background manipulation–undisclosed and furtive manipulation by a global network of confederates–was happening while Spotify devoted substantial resources worthy of a state security operation into programming music in its own proprietary playlists. That programmed music not only was trivial and, to be kind, low brow, but also essentially at no cost to Spotify. It’s not just that it was free, it was free in a particular way. In Silicon Valley-speak, Ms. Pelly has discovered how Spotify disaggregated the musician from the value chain.

What she has uncovered has breathtaking implications, particularly with the concomitant rise of artificial intelligence and that assault on creators. The UK Parliament’s House of Commons Digital, Culture, Media & Sport Committee’s Inquiry into the Economics of Music Streaming quoted me as saying “If a highly trained soloist views getting included on a Spotify “Sleep” playlist as a career booster, something is really wrong.” That sentiment clearly resonated with the Committee, but was my feeble attempt at calling government’s attention to then-only-suspected playlist grift that was going on at Spotify. Ms. Pelly’s book is a solid indictment–there’s that word again–of Spotify’s wild-eyed, drooling greed and public deception.

Ms. Pelly’s work raises serious questions about streaming payola and its fellow-travelers in the annals of crime. The last time this happened in the music business was with Fred Dannen’s 1991 book called Hit Men that blew the lid off of radio payola. That book also sent record executives running to unfamiliar places called “book stores” but for a particular reason. They weren’t running to read the book. They already knew the story, sometimes all too well. They were running to see if their name was in the index.

Like the misguided iHeart and Pandora “steering agreements” that nobody ever investigated which preceded mainstream streaming manipulation, it’s worth investigating whether Spotify’s fakery actually rises to the level of a kind of payola or other prosecutable offense. As the noted broadcasting lawyer David Oxenford observed before the rise of Spotify:

The payola statute, 47 USC Section 508, applies to radio stations and their employees, so by its terms it does not apply to Internet radio (at least to the extent that Internet Radio is not transmitted by radio waves – we’ll ignore questions of whether Internet radio transmitted by wi-fi, WiMax or cellular technology might be considered a “radio” service for purposes of this statute). But that does not end the inquiry.Note that neither the prosecutions brought by Eliot Spitzer in New York state a few years ago nor the prosecution of legendary disc jockey Alan Fried in the 1950s were brought under the payola statute. Instead, both were based on state law commercial bribery statutes on the theory that improper payments were being received for a commercial advantage. Such statutes are in no way limited to radio, but can apply to any business. Thus, Internet radio stations would need to be concerned.

Ms. Pelly’s investigative work raises serious questions of its own about the corrosive effects of fake playlists on the music community including musicians and songwriters. She also raises equally serious questions about Spotify’s financial reporting obligations as a public company.

For example, I suspect that if Spotify were found to be using deception to boost certain recordings on its proprietary playlists without disclosing this to the public, it could potentially raise issues under securities laws, including the Sarbanes-Oxley Act (SOX). SOX requires companies to maintain accurate financial records and disclose material information that could affect investors’ decisions.

Deceptive practices that mislead investors about the company’s performance or business practices could be considered a violation of SOX. Additionally, such actions could lead to investigations by regulatory bodies like the Securities and Exchange Commission (SEC) and potential legal consequences.

Publicly traded companies like Spotify are required to disclose “risk factors” in their public filings which are potential events that could significantly impact Spotify’s business, financial condition, or operations. Ms. Pelly’s reporting raises issues that likely should be addressed in a risk factor. Imagine that risk factor in Spotify’s next SEC filing? It might read something like this:

Risk Factor: Potential Legal and Regulatory Actions

Spotify is currently under investigation for alleged deceptive practices related to the manipulation of Spotify’s proprietary playlists. If these allegations are substantiated, Spotify could face significant legal and regulatory actions, including fines, penalties, and enforcement actions by regulatory bodies such as the Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC). Such actions could result in substantial financial liabilities, damage to our reputation, and a loss of user trust, which could adversely affect our business operations and financial performance.

[A version of this post first appeared in MusicTech.Solutions]

December 26, 2024 by Trichordist Editor

Step Right Up: The Chamber of Progress’s Ticketing Chamber of Horrors Fools Nobody

It’s one of those sad facts there are people you meet in life who just always seem to have the wrong side of the deal. Sometimes it’s emotionally understandable in the case of kids like the Cox character from William Boyd’s Good and Bad at Games or even Smike from Nicholas Nickleby. But when you see one of these cringy Silicon Valley policy laundries like “Chamber of Progress” keep getting the wrong side of the deal, there’s a much simpler explanation.

And now they are wrapping themselves in the flag of progressivism as they run the thimblerig on–of all things–ticketing. And cutesy names like “Chamber of Progress” notwithstanding, the group’s latest “report” if you can call it that would have state legislators believe that the StubHubs of this world are actually on the side of all that is good, just innocent puppies scampering across the stage with an IPO in their mouth.

These high minded choir boys fancy their souls are just purer than everyone else’s in their cyberlibertarian progressivism who oppose asymmetrical commercial power except when it suits them and only when it suits them. We see it with Chamber of Progress’s “Generate and Create” obfuscation campaign to promote Silicon Valley’s interests in the “fair use” copyright exception absurdly applied to generative AI. This under the guise of “supporting” artists while destroying their craft and, yes, their humanity. OK, I went there. And we now we see it in ticketing, too. Can’t these guys get a real job?

As we will see, what the Chamber of Progress is really about when it comes to our community is locking in asymmetrical power relationships and protecting Silicon Valley’s cybergod-given right to extract money from relationships where they are not wanted and transactions where they don’t belong. Far from “forget the middleman”, StubHub’s entire business model is based on imposing themselves as the middleman with, it would appear, some pretty nefarious partners. While Chamber of Progress wants to point to the pending Department of Justice case against LiveNation as an excuse for just about anything you can think of, it is well to remember that pending cases don’t always turn out as advertised and flags can become shrouds. Since they seem to like DOJ investigations so much, let’s not forget there’s another one that may be in the offing they’ll like a lot less.

The Flawed Premise of Faux Property Rights

The report starts off from a very flawed premise and a classic projection about the plethora of state ticketing laws backed or opposed by StubHub & Co. The Chamber tells us that “legislators should adopt resale ticketing laws to foster competition, reduce ticket prices, and increase transparency.” Reduce ticket prices? Really? If anyone is acting to increase ticket prices it’s the middleman resellers whose very existence undermines the longstanding economic relationship between artists and fans. Economic relationships that thrive in an environment of classical enforceable property rights.

It begins like a lot of these propaganda campaigns do–identify your villains (those you want to unseat) and then trot out a parade of horrors you create by shading the facts. By the end, a busy legislator or staffer is ready to believe they discovered the cause of cancer and that the potholes are somebody else’s fault!

But here is the essential flaw that I think brings down the entire chamber of horrors this report tries to manufacture. They really want you to believe that once an artist sells a ticket, that ticket can then be resold or repackaged because the artist has sold the right to control the ticket to the purchaser. This tortured analysis of the artist’s property rights is simply incorrect and this one error is the beginning of a cascading effect of really bad stuff for everyone in the chain. Here’s what the report says:

The use of “license” language in ticketing legislation has created a loophole that unscrupulous venues can exploit. When a ticket is defined as a “license” rather than a property right, it gives venues and event organizers the power to revoke the license of any ticket that is resold. This means that even if a ticket was legally purchased, the venue can declare it invalid if it is resold to another party.

Resale freedom laws provide essential benefits to consumers by ensuring their rights to buy, sell, and transfer tickets without arbitrary restrictions by primary sellers like Live Nation. These laws help to keep ticket prices affordable and enhance consumer choice and access to live events. Resale freedom laws ban anti-consumer practices and empower fans to find tickets on the platform of their choice, increasing their chances of securing seats for popular events.

See what they did there? First, they are selling “freedom” as in “resale freedom.” This is both laughable but truly Orwellian Newspeak, as in SLAVERY IS FREEDOM. This is not supposed to be a funny joke, somebody paid a lot of money for this report. Yet what do you expect from people who think “Chamber of Progress” is a great brand?

But seriously, they skip over the fact that the artist sets the price for their ticket. They skip over it because they have to if they want to make their sponsor’s case. That doesn’t make them correct, however. The report bungles the economic relationships in ticketing because they either fail to understand or don’t want to understand the reality.

The Report Gets the Economics Backwards

Live shows are not fungible or interchangeable. The ticket starts out as the artist’s property and the artist decides the ticket’s face price based on the economic relationship the artist wants with their fan. As David Lowery has said many times, the economic relationship between artists and fans is analogous to a subscription, it’s not a one-time transaction from which the artist wants to extract the net present value of all possible transactions with the fan. The resellers have the opposite relationship with the fan because to them, fans are fungible. Resellers want to extract the maximum from each fan transaction because they don’t care about a long-term relationship with the fan. Upside down world, right?

When the artist sells a ticket, they sell a right to attend the show under certain conditions. They don’t sell a piece of property. They don’t sell a pork belly or a can of Coke. They sell an emotional connection. That’s not a “loophole.” Pretending that a ticket is a pork belly is creating a loophole out of thin air.

That is true of cover charge for bands at your local dive bar and it is true of Taylor Swift at your local soft-seat venue or stadium. It’s also true in dynamic pricing situations–I’m not a fan of dynamic pricing, but I respect the artist’s decision if they think it’s right for them. Big or small, this is the core relationship that must be respected if you want live music to survive and it’s something I think about in Austin where the city styles itself the Live Music Capitol of the World.

So Chamber of Progress objects to state laws that confirm this license relationship, and that’s an important distinction. These laws confirm the reality of the true original property right, they don’t recreate an alternate reality out of whole cloth. The fact that it is even necessary to pass these laws belies the oligopoly power of StubHub & Co.

But Chamber of Progress goes even further because the point of the report is to identify a villain. And here is where the fudging starts. They tell you “When a ticket is defined as a “license” rather than a property right, it gives venues and event organizers the power to revoke the license of any ticket that is resold.”

Not true. The artist has that right and delegates that right to the venues as part of the ticketing function. But even StubHub is leery of attacking artists directly so they devise this bizarre rhetorical construct of licensing vs. ownership in order to blame venues, and for what? Preventing scalpers from profiting from their scams and preventing resellers from profiting from their arbitrage.

Bots and Scammers

This fallacy alone is really enough to refute the entire report, but wait, there’s more. There are two key foundations for the ticket reselling business at scale: bots and making a market for scammers to sell what they don’t own, aka speculative ticketing. They need bots because it allows scalpers to beat fans to tickets in quantity and they need spec ticketing because it allows them to sell a ticket that doesn’t even exist yet but for which there is demand.

Remember–bots are illegal. The Better Online Ticket Sales Act of 2016 sponsored by Senators Marsha Blackburn and Richard Blumenthal banned the use of bots for ticket sales in the US. The National Independent Talent Association asked the Federal Trade Commission to investigate open and notorious bot technologies on sale at the big ticket resellers convention:

Our organization recently attended the World Ticket Conference organized by the National Association of Ticket Brokers (NATB). At this event, we observed a sold-out exhibition hall filled with vendors selling and marketing products designed to bypass security measures for ticket purchases, in direct violation of the BOTS Act.

Realize, this isn’t a question of whether or not resellers profit from the use of bots on their platforms–the question is why aren’t people being prosecuted for violating the BOTS Act. But the Chamber of Progress wants you to believe there is something wrong with passing state laws to give state Attorneys General the power to prosecute these laws shoulder-to-shoulder with the overworked and under-resourced FTC.

Bills that purportedly claim to enhance transparency through speculative ticket bans, protect consumer rights through anti-bots legislation, or improve access through customer data sharing often contain hidden provisions that restrict competition and limit consumer choices.

In other words, the report opposes banning speculative ticket sales–selling something you don’t own is already illegal, probably since the dawn of our legal systems–and opposes state anti-bots legislation–already illegal under the federal BOTS Act. This should tell you all you need to know.

It’s Just Business: Racketeering, Silicon Valley Style

The real story that goes unreported is that StubHub is currently being sued in a New York class action for violating the civil Racketeer Influenced and Corrupt Organizations laws in selling tickets to a UK football match without rights. They have managed to punt that case based on their one-sided adhesion contract requiring arbitration in their terms of service, but interestingly the federal judge overseeing the case has retained jurisdiction. Imagine the risk factor in the StubHub IPO prospectus about how they could be subject to the RICO laws.

I recently posted about a “model” ticketing legislation that some of these characters were trying to get adopted by ALEC (the conservative state lobbying operation) which I gather has been dropped since the old link to the model bill is dead. It looks to me like the Chamber report is a new offensive rising out of the ashes of the ALEC lobbying effort.

“Progressives” Who Fail to Address Asymmetry between Big Tech and Artists are Not Progressives

So once again, our friends in Silicon Valley are trying to elbow their way into a place they are not wanted, not needed, and are poisonous all in the aid of making them even richer all under a miasma of crap about “reseller freedom.” Fortunately, the public is getting wise to their scams no matter how much they try to sell their oppressive tactics as some kind of freedom. If they want to really be progressive, they’d help artists establish a resale royalty so that we could share in the riches from their arbitrage in return for a right to resell our tickets. Don’t hold your breath.

As we’ve seen with their logical backflips in AI and now with ticketing, the Chamber of Progress may be a lot of things, but “progressive” they ain’t. Maybe we can help them find productive work in this season of hope.

[A version of this post first appeared on MusicTechPolicy.]

December 22, 2024 by thetrichordist