Tag: Featured

Turns Out Money Talks in Silicon Valley

For years, producers of creative content—from individual artists to mass-media corporations—have tried to engage with internet companies (mainly Google) in an effort to stop the facilitation of rampant, unlicensed access to their material. Whether the complaint is millions of unlicensed works on YouTube, or search results leading users to pirate sites, copyright owners are all-too familiar with the dual response We can’t and We shouldn’t. This is shorthand for the internet industry’s standard claim that they can’t effectively police their platforms; and even if they could, they shouldn’t because freedom.

But as reported in January 2017, advertising giant Procter & Gamble issued a warning on behalf of global advertisers who spend a combined $70+ billion on digital, announcing that they were no longer willing to accept can’t and shouldn’t as answers to their key complaints. These were a lack of transparency (i.e. independent audit) in measuring the quality and effectiveness of digital advertising; and an inability to prevent brands from supporting intolerable content. So, terrorist recruiting videos on YouTube brought to you by Colgate just isn’t working for the brand managers anymore.  Yet, strangely, the internet companies and their bevy of think-tankers have not told these advertisers to stop hating the future and change their business models.  (Though I’d like to watch if they did.)

Fast-forward a year and the Wall Street Journal this week reports that Unilever is threatening to substantially reduce its ad buy on Facebook and YouTube if the companies do not more effectively weed out fake news and other divisive content like racism, sexism, and violence. What’s striking about this article is its concluding follow-up report that P&G’s brand officer Mark Pritchard — it was he in 2017, who charged the internet platforms to clean up their act — notes that “progress has been impressive” and that ninety-percent of his demands have been met.

It will come as no surprise to the creative community that, when revenue is at stake, the major internet companies suddenly discover that it is both technically possible and ideologically conceivable to police their platforms a bit more aggressively than they have to date. Artists and creators should follow these developments because the political, social, and financial pressure being exerted on the platform providers can make the companies more vulnerable to potential liability for infringing creative works; and this might make them a bit more cooperative about solving the “unsolvable” issue of mass infringement. By demonstrating a capacity for control (because now they have to), this underscores what should be obvious to most people — that the tradition of shrugging off the interests of rights holders has been a business decision. Period.

No doubt, many “digital rights” activists will prophesy the end of days for democracy in response to this trend toward platform responsibility; but they can take heart knowing that democracy hasn’t exactly thrived under the principles applied thus far. The assumption that all online interactions are protected speech, and that more speech is the only antidote to harmful speech, is still proving to be a destructive fallacy every second of every day. And it turns out the advertisers, whose money pays for these platforms of democracy, don’t accept that the answer to hate-speech and fake news is to just let it ride until our better angels eventually prevail. It turns out this is both bad for society and bad for business. It turns out money talks in Silicon Valley. And if that’s the only way to get internet companies to behave like citizens instead of bullies, then whatever works.

Time to Stop Defending the Internet As-Is

With the passing of John Perry Barlow last week, a number of articles and social media comments by internet activists offered variations on the theme that we have Barlow to thank for the internet as we know it. In general, they mean the internet that has thus far been allowed to function as a self-governing industry. While it is certainly proper that organizations mourn the loss of a friend and colleague—and in the case of the EFF, a co-founder—the internet story of the present is one running counter to the utopianism of the 1990s shaped by people like Barlow. And it’s no longer just us “Luddites” saying so.

Despite the high-minded idealism of twenty years ago—predicting that a cyberspace independent of the laws of nations would somehow reveal our latent morality, fairness, and intelligence—the banal consequence is that laissez-faire cyber policy mostly enabled platform designers to convert our crudest instincts into advertising dollars. This finally became apparent to many Americans last year with the revelation that Russian agents have been using Facebook’s ad system to intentionally exacerbate political discord in the United States.

That story was followed by some of Silicon Valley’s most prominent figures coming forward to acknowledge that the apps and systems they helped build are indeed unhealthy—politically, socially, and physiologically. In short, the internet we have is not the one we should hope to keep. And even the owners of the major platforms are now coming to grips with the fact that, despite all previous slogans to the contrary, they are not making the world a better place. In this light, it seems that organizations like EFF et al, who devote considerable effort to defend a state of zero accountability for service providers, are planting their flags on the wrong side of history.

Most recently, a team of tech industry professionals established the Center for Humane Technology. Led by former Google Design Ethicist Tristan Harris and featuring entrepreneur and early Facebook advisor Roger McNamee, the organization’s mission reads like a response to a core problem identified by Jaron Lanier as early as 2010—that web technology was not designed to serve humans so much as humans have been reprogrammed to serve technology.

The new Center emphasizes specific ways in which social media platforms have been purposely designed to exploit basic, psychological vulnerabilities in order to make the experiences addictive and retain round-the-clock user attention. They identify both specific design aspects (i.e. icons, colors, etc.) and business decisions that produce negative effects ranging from personal depression to a political climate steeped in ignorance and outrage. And of course nobody really knows the effects the devices and apps have on the developing brains of young children.

In press interviews, Harris states that many of his friends and colleagues at Google and Facebook are aware of the problems he is now publicizing; but he also notes that the people at these companies are trapped between personal values, yearning to act ethically; and company business models, which cannot easily be abandoned. This is why a key target audience of the Center’s outreach comprises the current and future employees of the tech industry, recognizing that talented designers, engineers, and programmers are in a position to exert pressure on employers to build products that actually serve society.

The fallout from the Russian hack, generally referred to as the “tech backlash,” seems to have produced three main responses. The quietest was a fleeting denial that the backlash was even happening or that Big Tech deserved the criticism. A slightly more prominent theme emerged suggesting that Silicon Valley had sold out its Barlowian ideals for profit, stressing a back-to-basics agenda that fails to acknowledge the flaws in those ideals at their foundation. And the third response, the one now dominating mainstream reporting, features leading industry players unequivocally admitting that they designed systems which produce some very negative effects.

While the Center for Humane Technology represents a step in the right direction, two ideas occur to me. The first is that more thoughtful technology design alone cannot do our work for us. For example, if our social or political views are too easily manipulated or reinforced by memes or unreliable information sources, Facebook cannot be counted on to redesign its platform to teach people how to be critical thinkers. So, while it is good to know that tech leaders are willing to admit that Facebook appeals to our lizard brains, I suspect they can only do so much to help us transcend our lizard natures. That’s on us.

The other thought is that organizations like this Center might want to reach out to the artists, musicians, authors, etc. who were among the first to identify and discuss the negative effects of the internet. The 20-year-old mud fight over copyright infringement has been cynically mischaracterized as a battle exclusively about money. But this distillation ignores, for instance, the intersection between media exploitation and media gluttony. While it is absolutely necessary to better understand—and even want to change—the mechanisms by which social media platforms foster addiction, it is also worth acknowledging the extent to which those mechanisms still rely on unlicensed exploitation of authors, artists, journalists, musicians, photographers, etc. to retain user attention.

Meanwhile, the organizations still clinging to the maximalist view that society is best served when Google, Facebook, et al are absolved from responsibility and liability will find that message increasingly hard to sell. And it’s about time.

In a must-read article by Roger McNamee, one detail I find particularly striking is how recent the “tech backlash” really is—how much evidence McNamee himself, as a trusted advisor, had to present to Facebook leadership before they finally stopped hiding behind the old saw that they’re not a publisher and cannot be held responsible for third-party content. That mantra is the colloquial version of what the policy folks know as Section 230 of the Communications Decency Act and Section 512 of the Digital Millennium Copyright Act—twin liability shields that are the legislative foundation for many of the problems now being discussed. In fact, I’ll conclude by quoting McNamee, who sums it up perfectly as follows:

“Thanks to the U.S. government’s laissez-faire approach to regulation, the internet platforms were able to pursue business strategies that would not have been allowed in prior decades. No one stopped them from using free products to centralize the internet and then replace its core functions. No one stopped them from siphoning off the profits of content creators. No one stopped them from gathering data on every aspect of every user’s internet life. No one stopped them from amassing market share not seen since the days of Standard Oil. No one stopped them from running massive social and psychological experiments on their users. No one demanded that they police their platforms. It has been a sweet deal.”

4th Circuit Remands BMG v. COX, But …

Good news for authors, creators, and sanity was delivered yesterday by the 4th Circuit Court of Appeals. Despite remanding the case back to the district court for retrial on a specific matter of jury instruction, the opinion eviscerates two of COX’s most strained interpretations of copyright law, either of which could have had devastating effects for rights holders. BMG Rights Management sued ISP Cox Communications for contributory infringement in 2014 and was awarded $25 million in damages in December of 2015. Cox appealed, and these posts from January 2017 and November 2017 detail the company’s key defenses with my commentary.

DMCA Safe Harbor Still Doesn’t Apply

In its appeal, Cox argued that the district court erred in denying it the safe harbor defense as provided in the DMCA. As noted many times, despite the rhetoric of “digital rights” activists, the safe harbor is not unconditional; and one of the conditions is that a service provider must have a repeat-infringer policy in place that ultimately leads to account termination. The circuit court agreed with the lower court that Cox’s “thirteen-strike policy,” which only tended to lead to account reinstatement did not fulfill the intent of the DMCA that a policy should act as a deterrent to repeat infringement.

Most bizarrely Cox argued on appeal that the term “repeat infringers” in the statute could only mean people who’ve been held liable for multiple infringements in a court of law. As noted in my January 2017 post, this would be almost nobody since very few individuals are ever defendants in a single copyright infringement case, let alone one that actually goes to trial. The appeals court rejected Cox’s claim in less prosaic terms, including the citation of congressional reports on the drafting of DMCA, which the court summarizes thus:

“The passage does not suggest that they [users] should risk losing Internet access only once they have been sued in court and found liable for multiple instances of infringement. Indeed, the risk of losing one’s Internet access would hardly constitute a ‘realistic threat’ capable of deterring infringement if that punishment applied only to those already subject to civil penalties and legal fees as adjudicated infringers.”

Denied Appeal to Sony

The other extraordinary appeal by Cox was its assertion that the jury in the district court should have been instructed to consider the ISP’s protection under the principle established in the 1984 Sony case, namely that its internet service can be used for substantially non-infringing purposes. As explored at length in my November 2017 post, were Cox to prevail on this point, it would effectively immunize all internet providers against any form of liability for copyright infringement, and this begs the question as to why the ISPs petitioned for the DMCA safe harbors in the late 1990s if Sony had already established this immunity.

The 4th Circuit called Cox’s appeal to Sony “meritless,” stating that in Grokster (2005), the Supreme Court clarified that simply because a product is “capable of substantial lawful use,” this does not preclude the possibility that the producer or provider can never be held liable for contributory infringement. “Because the instruction Cox requested misstates the law, the district court did not err in refusing to give it [instruction to consider Sony],” states the opinion.

Remand for Retrial

Where the appeals court agreed with Cox, and the reason for remanding for retrial, was in regard to the district court’s instructions to the jury on the standard of intent for contributory infringement. Again citing Grokster the opinion quotes, “[o]ne infringes contributorily by intentionally inducing or encouraging direct infringement.” Thus, the word intentionally suggests a distinction between “knowledge” of infringing activity (or any crime for that matter) and “negligence” that may cause a party to inadvertently contribute to criminal activity. Because the district court instructed the jury to consider whether “Cox knew or should have known of such infringing activity,” the circuit court held this to be in error. The term “should have known,” is described in the opinion as equivalent to “negligence,” which is often insufficient to establish secondary liability for criminal conduct.

It will be interesting to see whether Cox opts for a retrial or proposes a settlement. The facts presented have already been viewed by a district court judge, a jury, and now an appeals court panel as compelling evidence that Cox knew about repeat infringers and adopted a policy of avoiding account termination in its own financial interests. In fact, my favorite example cited in the 4th Circuit opinion is this one quoting a company email:

“But when Cox received another complaint, a manager directed the employee not to terminate, but rather to ‘suspend this Customer, one LAST time,’ noting that ‘[t]his customer pays us over $400/month’ and that ‘[e]very terminated Customer becomes lost revenue.’”

So, even with new jury instructions, evidence like this suggests Cox would have a hard time convincing anyone it had no knowledge of infringing activity. But the reason this quote is my favorite is that it’s a twofer—not only implicating an ISPs attempt to stretch the law beyond reason but also giving lie to so many rationalizations for media piracy by users. I mean this dude has the money to pay his ISP about $5,000 a year for bandwidth but won’t pay for music, movies, games, etc.? Damn that’s some big-ticket hypocrisy right there. He could probably pay an ISP about 35% of that total, acquire his entertainment legally, and still save money.