Our series of what file-sharing studies are really saying has revealed a lot of telling information. With an incredible amount of information unearthed by this exercise so far, we can now inform you that we have only arrived at the half-way mark in our long-running series. The so-called “graduated response” laws around the world have received considerable attention (and mostly condemnation) and this development hasn’t gone unnoticed as this next study shows.
The study of the day goes by the name “Toward a Regulatory Model of Internet Intermediary Liability: File-Sharing and Copyright Enforcement”. It was published in 2011 by the Northwestern Journal of International Law & Business.
The study starts out with talking about how copyright laws are outdated and that major corporate entities have sought to bring in a ‘graduated response’ (also commonly referred to as a ‘three strikes law’ if I may add) where ISPs are compelled to disconnect people from the internet after a series of (unsubstantiated) complaints are brought to any one particular user. The study also notes that some of the costs of enforcement under this regime is shifted away from record labels to ISPs and government regulators. The study also notes the previous litigation tactics of record labels:
While copyright enforcement against individual file-sharing infringers has been a disaster for everyone involved, rightsholders have had some success in combating online infringement with suits alleging contributory infringement against internet intermediaries.
I definitely agree that the litigation campaign against file sharers was an absolute disaster. As one other study we looked at in this series noted, you might be able to get that particular file-sharer to slow down on file-sharing, but that moment is only short-lived and others, in the mean time, pick up whatever slack there was made by the loss of that particular file-sharer. Also, taking down a few websites, as far as I can tell, has similar, if you can call it, “success”, where if one website was taken down, several other websites quickly filled the void and life carried on in the world of file-sharing.
The study then addresses the graduated response laws directly, making this very important note (this excerpt needs to be read in its entirety):
Content owners, consumers, and policy makers all appear unhappy with the status quo. Graduated response laws provide one possible response to the failure of conventional copyright enforcement to address online file-sharing. Graduated response also represents a fundamental change in the way copyright enforcement is conceptualized: from privately enforced tort liability theory, to enforcement by regulatory obligations for internet service providers. There is much to recommend this change in approach, and the basic concept underlying graduated response is sound. Unfortunately, as has been the history of much of copyright law, most of the proposed graduated response policies have been primarily written by
content producers and tend to favor content at the expense of consumers. Implementation of graduated response laws will face numerous practical difficulties and do not include sufficient safeguards to ensure due-process and accuracy for those accused of file-sharing infringement.
Besides the comment that the underlying principle of a graduated response being sound, much of this is pretty much what we’ve been saying all along. The graduated response laws completely lack due process and consumer protection from potential abuse of the system. In assessing the graduated response is a good idea, the study starts off with questioning whether or not the “problem of file-sharing” is a problem even worth solving in the first place:
As a preliminary matter, it may be helpful to ask whether file-sharing is a problem in need of a solution. Without getting into a much deeper discussion of the propriety of copyright and intellectual property law more generally, I will note a few things about the debate over the costs and benefits of file-sharing. Intuitively, it seems to follow that if people are downloading copyrighted material freely, they are less likely to pay for it. While some research supports this position, several studies have cast some doubt as to whether online file-sharing actually causes substantial financial harm to content industries.
The latter note where questioning whether or not file-sharing has even caused substantial problems has certainly been a theme in the previous studies. The worst assessment we’ve seen to date in this series is that file-sharing losses amount to less than $2 per $15 album. That is using the hugely inflated theory of one download means one lost sale. Hardly the epidemic the record labels would like us to believe. A number of the studies noted no real damage being done to the industry as a result of file-sharing and a few we’ve covered actually say that file-sharing has benefited the music industry with the sampling effect and the potential to discover new music. Moreover, when discussing the drop of music sales in the 1990′s, the study makes the following note not previously discussed by the previous studies in this series:
In judging industry claims about lost revenues, it is also relevant that the period of peak revenue in the late 1990s used by the labels as a benchmark against which to measure lost revenue is the same period during which the Federal Trade Commission (FTC) and numerous states’ attorneys general alleged that the labels had engaged in a major price-fixing
conspiracy to artificially inflate the price of compact discs. The five major record labels’ and several large retailers settled a price-fixing suit brought by the FTC in 2000′ and another brought by a group of states’ Attorneys General in 2002.’
When discussing any drop in revenue in the famous time period, this is an excellent point to bring up because this price-fixing scandal was a known factor in revenue brought in to the record labels. So, when revenue fell since the 90′s, it was also the period after the record labels were forced to stop engaging in price-fixing. You can add this to the list of reasons why revenue fell in this time period which include increased competition from other industries and the unbundling of the album and selling of singles rather than selling whole albums. All of these were covered by previous studies in this series.
The study went on to assess what success the file-sharing lawsuits enjoyed. The lawsuits as a public relations campaign, the study found, was a failure. The lawsuits as a revenue model showed mixed results since, in some districts, it may have been profitable, but in many jurisdictions, trying to tie file-sharers to specific jurisdictions proved problematic given that the idea was to extract money for the least administration costs possible. While the profitability in many cases is considered a general maybe, the moral implications of legal blackmail is extremely problematic. The says that, for rightsholders, it’s better than nothing. Still, as the study concluded on this front, “it is clear that forcing defendants to choose between a cheap settlement and an expensive lawsuit is not an ideal outcome for copyright law.”
The study goes on to offer a laundry list of legal tactics used by major record labels as well as the reaction on the internet including introducing a more decentralized approach on ThePirateBay to name one example. The study then discusses different countries implementing the three strikes law including France (HADOPI), the UK (Digital Economy Act), the attempted implementation in ACTA, and in Ireland. It also assessed attempts to implement three strikes laws in other countries including that of the United States. The study then talks about what it’s looking for in terms of appraising the “Graduated Response” laws:
An appropriate enforcement policy must strike a balance between copyright holders’ rights and consumer rights. In the context of online file-sharing, that balance implicates a wide range of factors, such as fairness, privacy, and due process.
The study then describes general facts about a graduated response such as how ISPs are threatened to be not considered part of the DMCA safe harbor regimes should they not comply. The study then discusses a number of serious flaws in the Graduated Response laws. this includes the following:
It may be difficult to actually incapacitate filesharers, given the proliferation of internet access points of various sorts that could be used for this purpose. Many people have access to the internet through a variety of networks on any given day, at home, at work, at cafes and shops, via cellular networks, and by connecting to a neighbor’s unsecured Wi-Fi network. The fact is that many urban settings are practically blanketed by open wireless networks, both those intended for public use and those operated by individuals who are not savvy enough or careful enough to secure them.
In addition to concerns about effectiveness, the reality of practically ubiquitous public and/or shared networks creates a high risk of over-enforcement.
ISPs and rightsholders will frequently find it difficult to identify an individual infringer from the sometimes unrelated and anonymous individuals who at different times share an internet connection.
Wrapped up in the problem of holding ISPs responsible for the actions of individual subscribers is the difficulty of defining an ISP.
it would seem bizarre to block a business’s internet access because one of its employees was engaged in illegal file-sharing. The costs and benefits of such a policy simply do not balance well. Yet, if there is no liability for file-sharing on the network of a business or university, where in some cases it may be difficult to identify the individual who is responsible, the law loses its teeth.
Even if disconnections successfully incapacitate file-sharers, the effects of such disconnections would be overbroad. The prospect of internet disconnections as a substitute for civil liability raises serious concerns about the importance of internet access for social, commercial, and political participation as compared with the importance of policing online file-sharing.
Privacy concerns also merit careful consideration. If ISPs are required to retain enough data to identify customer activities for prolonged periods and provide that data to rightsholders or regulators without court orders, the level of privacy expected by internet users may decline. This will especially be the case where ISPs are required to affirmatively monitor user activity.
The study also assesses any benefits, if at all. One is that it argues that it’s better than the litigation tactics which, I would argue, is like a student saying that they are better than the worst student in the class. That was pretty much it though. The excuse that it’s better than litigation.
The study then concludes:
One conclusion that can be drawn from the discussion above is that a regulatory-style enforcement scheme may be better suited to the nature of digital content and the internet than a system of large statutory damages administered unevenly by rightsholder law suits. Regulatory implementation of intermediary liability may very well be the best available option to combat illegal file-sharing. Still, specific policy proposals should be considered carefully. Graduated response laws, as they are currently conceived, will significantly affect the norms of internet regulation, the openness of the internet, and will have implications for individual rights to access.
Perhaps the most important lesson to be drawn from the current state of online copyright enforcement is that, in many ways, traditional copyright law has become an anachronism. I have presented one area in which conventional copyright law has produced bizarre and unappealing results when applied to internet-era behaviors. Policymakers have struggled to
develop new mechanisms to address the problem of online file-sharing, but there have been no serious attempts to rethink copyright law more generally in light of the underlying shift in norms that has accompanied the digitization of content and proliferation of broadband internet access.
that I can definitely also agree with. We’ve rarely seen any attempts to address technology of today and build copyright laws to deal with the reality of technology on a more fundamental level. Rather than working with technology, we’ve kept seeing policies that are directed at trying to block progress for the perceived benefit of the record labels and a few other multinational corporations. Attempts to reassess copyright have been extremely few and far between. As technology develops new freedoms for people, copyright laws have been increasingly used to stymie that freedom and merely as a vehicle to satisfy outdated business models designed for an era we’ve all bid farewell to long ago.