Can We Ever End Legalized Piracy?

Creators of every stripe must watch Miranda Mulholland’s May 24th speech delivered to the Economic Club of Canada.  The musician, composer, and label-owner, with nearly 20 years of professional experience, does an excellent job of contrasting the realities of being a professional creator in today’s market against the rhetorical promises of the corporate leaders who designed that market.  In addition to answering some of the classic tech-utopian “advice”—adapting, selling CDs at venues, touring, etc.—Mulholland focuses broadly on the subject of accountability and the fact that what we normally call “piracy” occurs on legal platforms.  She says …

“Let’s look at the biggest music service in the world – YouTube. Did you know that 82% of YouTube users use it for music? It is supported by advertising and it is based on user uploaded content. But wait. Running a commercial site based on unauthorized uploading of copyrighted music is illegal, right?

YouTube says, it isn’t our fault – we are just the shop window. We didn’t put the items in the window, so we are not accountable for them. We are a passive intermediary. We are not liable for this massive copyright infringement.”

Because YouTube is currently a mix of licensed and unlicensed music, it is hard to get a fix on the percentage of infringing v. non-infringing uses.  Anecdotally, though, musicians like Mulholland tell this story time and again.  Still, she hardly asserts that business should return to the way things were before the digital revolution but instead looks forward, recommending specific actions that artists, industry, consumers, and government can take to get the formula right.  And with very subtle differences, what’s good for Canada is good for the U.S.  Her top item for government:  End Tech Company Safe Harbors. (Okay, they spell it harbours up there.)

As has been widely reported by countless independent artists as well as large rights holders, the intended balance in the provisions of the 1998 Digital Millennium Copyright Act was soon overwhelmed by the unforeseen volume of copyright infringement on legal platforms.  And because the largest of these platforms YouTube is part of a $700 billion-dollar empire called Google (Alphabet), litigation is an economic non-starter. Moreover, the major rights holders remain in an awkward limbo comprising negotiated deals with YouTube while still sending millions of notices of infringement of their works on the site.*

Since 2015, the US Copyright Office has been conducting a review of the DMCA; and many artists and creators have for several years been advocating some type of Take Down/Stay Down provision.  One way or another, based on the case law to date and the financial power of providers like Google, it does seem as though only legislative action can recalibrate the intended compromise with rights holders by, among other things, clarifying the statutory conditions a service provider must meet in order to retain the liability shield known as the “safe harbor.”

Of course consumers will be told—and have been told—that any revision to the safe harbor conditions in the DMCA will destroy innovation, free speech, and the internet itself.  We know the play. The Internet Association, along with “digital rights” activists like EFF will come out in full force against any proposed change. And they will all claim to be acting on behalf of consumers.  But the bottom line is this:  the DMCA presently enables massive corporations to grind up the dreams and labors of independent creators; and over time, consumers who want new works—or who wish to become creators themselves—will very likely find themselves part of the piling dust.

Based on just a sampling of the anecdotal experiences described by rights holders, both large and small, who attempt to use DMCA for enforcement, it is very likely that YouTube would be found to have already abrogated its “safe harbor” shield through non-compliance with one or more provisions of the DMCA as written.  Of course, for us to prove this, somebody would have to file a new copyright infringement claim against the company, and that won’t happen—not because a plaintiff would lack standing on the merits, but because Google is simply too big to sue. Ironically enough, though, the perception endures that the 300lb gorillas in this story are still Hollywood and the recording industry.

Viacom v. YouTube Is Unfinished Business

Readers probably remember that ten years ago, when YouTube was new, and only recently acquired by Google for $1.65 billion, the video platform was sued for infringement and vicarious infringement by a class of rights holders led by Viacom.  In 2010, the District Court granted a summary judgment in favor of YouTube, holding that the platform was entirely shielded by §512 of the DMCA; but on appeal in 2012, the Second Circuit called the lower court decision “premature,” finding that there were several triable issues of fact, and remanded the case back down.

Because the parties settled in March of 2014, just days before a new round of oral arguments was scheduled back at the Second Circuit, we’ll never know whether or not the rights holders would have been able to demonstrate to a jury that YouTube was failing to comply with key provisions in the DMCA and thus forfeit its safe harbor.  What we do know is that Viacom had provided evidence that YouTube’s founding executives, in its earliest days, were making calculated decisions to not remove material they knew to be infringing because the content was driving traffic.  We also know that the circuit court held that there were statutory issues warranting further discovery where YouTube might have been found wanting in holding up its end of the DMCA bargain.

The circuit court opinion also cites YouTube’s own internal audit at the time, which revealed that 60% of its content was copyrighted content and that only 10% of that material was authorized.  So, it is no exaggeration to say that while the Viacom case dragged on, YouTube grew its dominant position on the backs of creators, who were involuntarily “sharing” their work for no return.

Since 2010, the platform has grown from 24 hours of video uploaded every minute to 300 hours every minute; and the assumption has been that a service provider cannot know, amid all that material, what is and is not infringing.  Indeed, one of the formative principles of DMCA was that ISPs would not have to affirmatively monitor for infringement, but would instead be required to respond to each individual infringing use upon notification by the rightful owner of the copyright.

The flaw in this mechanism is now obvious and its consequences for creators are clear. A platform like YouTube is able to monetize infringements at warp speed while responding to claims at the pace of a horse and buggy by contrast—all while generating so much ad revenue that the company becomes untouchable via litigation. At the same time, shielded from liability for mass infringements on its own platform, YouTube enjoys an aggressive bargaining position that has enabled it to pay far lower rates than competing services for those works they do license.

There is a disconnect between the intent of the DMCA and the manifest reality. And what’s falling through the statutory cracks are the middle-class livelihoods of thousands of creators like Miranda Mulholland. Meanwhile, the promise that digital-age models replace old models for the artists who learn to “adapt” has been consistently disproven by creators who have actually done everything the digital gurus told them to do.

I suspect the prospect of ending safe harbors, as Mulholland proposes, is a non-starter. The principle of limiting liability for sites hosting User Generated Content remains sound; and it cannot be discounted that a site like YouTube must also manage an appeals process for wrongful claims against creators who build successful channels on the site and do not carelessly infringe copyrights.  Nevertheless, it cannot be denied that YouTube walks, talks, bargains, and earns money like a very actively-managed distribution network rather than the “dumb pipe” they claim to be when threading the loopholes of the DMCA.

While digital rights activists criticize every possible solution—from voluntary measures to legislative amendment—the fact is we now have 20 years worth of data not available to the authors of the DMCA in 1998.  These data show what artists like Miranda Mulholland have tried repeatedly to explain on the most human level—that they’re getting clobbered by an industry making fortunes from their labor.  Copyright law has always had to evolve when confronted with new technologies and new paradigms.  And in context to the lifespan of the public internet, the DMCA is ancient history.

*The irony is not lost on me that Mulholland’s video is best shared via YouTube, but that’s part of the challenge. They’re pretty much the only game in town.

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David Newhoff
David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

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