Tag: Internet Association

Internet Association Reverses on SESTA. EFF Cranky.

I can’t say I was surprised when the Internet Association announced on Friday that the major internet companies would be halting their lobbying efforts against the Stop Enabling Sex Trafficking (SESTA) bill. While representatives for Google, Facebook, and Twitter were enjoying Day Three of occasionally intense inquiry by the Senate Judiciary Committee over foreign meddling in our politics via social media, one thing became abundantly clear: the generic defense that everything online is free speech isn’t going to fly. Not with lawmakers. And not with the American people, it seems.

The reversal on SESTA did rankle the EFF, though, which announced almost immediately that “the Internet Association does not speak for the web,” leaving us to conclude that, presumably, the EFF speaks for the web. Whatever that quite means. Perhaps what the “digital rights” group is most concerned about is that when SESTA passes, which it almost certainly will, people might notice the lack of chilling effect it will have on free speech and think, “Hey, maybe these guys who speak for the web are prone to exaggeration.”

After all, these organizations have spent a lot of energy telling Americans that the liability shield extended to online providers in Section 230 of the Communications Decency Act is the reason the web has thrived at all. And one way to understand the extent to which this is hyperbole is to note that the amended SESTA bill, which the Internet Association now backs, does not include any changes that would make it any less a “censorship bill” if it had ever been one in the first place.

In fact, the substantive amendments now agreed upon primarily provide for changes to Chapter 77 of the U.S. criminal code (Title 18), which addresses both criminal and civil litigation that may stem from acts of slavery and trafficking, including trafficking of minors for the commercial sex trade. One amendment tightens up the definition of “participation in a venture” that facilitates or profits from crimes committed under §1591 (sex-trafficking of children) by describing this as “knowingly assisting, supporting, or facilitating a violation of…”. The other major amendment to Chapter 77 adds a section to the civil remedies for all slavery and trafficking-related crimes—allowing State Attorneys General to file civil claims in federal court where such remedies may be appropriate.

The EFF insists that SESTA will place smaller entities, which don’t have the financial/legal resources of Google and Facebook, at greater risk of potential litigation by victims of sex trafficking. They further assert that, according to various experts on trafficking, SESTA will not help victims and may even place them in greater jeopardy.

SESTA Doesn’t “Go After” Anyone

It’s important to understand that the purpose of SESTA is not trafficking interdiction itself. All the change to the CDA really does is lower one narrowly-defined barrier for alleged victims of sex trafficking to potentially hold a web business liable, if their owners knowingly profit from their victimization as minors trafficked in the sex trade. That’s a lot of conditions and a fairly high burden to meet in a litigation. Yet, the EFF cites critics like Kristen DiAngelo of the Sex Workers Outreach Project (SWOP), which paints a picture of SESTA driving sex workers off the web and back onto the streets where they are more likely to be preyed upon by traffickers.

Organizations run by former victims should be afforded considerable respect with regard to their views on stemming trafficking; but I think DiAngelo misconstrues the nature of SESTA when she writes in her letter to Senator Thune, “To victims of sex trafficking, the idea of shifting liability to publishers for the actions of actual pimps and traffickers is terrifying.” But that isn’t what SESTA does. While I agree with Ms. DiAngelo that the broader spectrum of criminal justice vis-a-vis prostitution is often hypocritical and too frequently criminalizes victims rather than traffickers or customers, SESTA has nothing to do with criminal prosecution at all. It only slightly amends the landscape for civil action, and it should no more lead to a flood of lawsuits by trafficking victims anymore than we’ve seen mass litigation by victims of child pornography since the CDA became law in 1996.

To put it in practical terms, a group of sex workers could theoretically start their own website tomorrow and maintain that site without concern that SESTA has made them more vulnerable to litigation. As explained in an earlier post, the only issue of criminal or civil liability for Backpage* is whether its owners engaged in willful blindness, or worse, with regard to ads that either explicitly or implicitly promoted minors for sex. What SESTA does is actually limit the liability for the site owners who do take affirmative steps to weed out, mitigate, or report attempts to advertise minors on their platform. If SWOP were interested, for instance, in fostering safer online environments for sex workers, SESTA should actually be conducive to that effort.

Perhaps if the EFF would stop calling SESTA a censorship bill and explain in some clear example how this legislation could possibly cause any of the systemic problems they claim, theirs would be a counterpoint worth considering. Meanwhile, they may want to read the moods of both Congress and many citizens, who seem far less receptive to the universal “hands off my web” message that has prevailed up until now. The danger, of course, is that there may yet be an actual threat to free speech in digital space, and if that happens, who will speak for the internet? Surely not the organization that has cried wolf so many times.

Internet Association Wants to Encode Safe Harbors in New NAFTA

As debate over renegotiating NAFTA heats up, the copyright interests will be duking it out with the internet industry over the inclusion, or not, of “safe harbor” provisions akin to Section 512 of the DMCA and Section 230 of the CDA.  In a letter dated August 31 to USTR Ambassador Robert Lighthizer, the Internet Association sang its standard refrain on the absolute necessity of these liability shields for the growth of the digital economy and the protection of American jobs that are increasingly dependent on the tech and internet sectors.  No surprise there.  And at least some truth.

More bizarrely, though, the letter claims that the Internet Association represents “the new faces of the American content industry, winning Emmys and Oscars, providing digital distribution for streaming-only Grammy winners, while also creating services that address the challenge of piracy by allowing consumers to legally access content globally.”

Ruth Vitale, CEO of CreativeFuture took exception to this claim in a letter of her own addressed to Ambassador Lighthizer. In her response, Vitale explains the well-documented history of the unintended negative effects of the DMCA on creative producers of every size.  “Why should these provisions be in an updated NAFTA — undermining the protections for American creatives overseas?” writes Vitale. “Please don’t export a system that does nothing but shelter the most powerful internet companies, rather than the start-ups that these trade associations often claim are the beneficiaries of safe harbor.”

The only reason the IA was able to insert this plug about award-winning “content creators” is because its membership includes companies like Netflix and Amazon; but as I addressed in an older post, Netflix-like models are neither truly “internet” businesses, nor a particularly new model for content-production.  Netflix is a motion picture exhibitor and producer—one that has as much interest in the copyrights vested in the products it makes as Sony or MGM.

Moreover, Netflix remains something of an unknown quantity, if we’re looking at big-picture economics.  Presently, we are witnessing a period when the company is spending a fortune in raised debt to produce work at a blistering pace in order to grow fat with content in its bid for global market-share.  But profitability is another question altogether; and there will come a time when the growth flattens. Netflix, Hulu, Amazon Originals, etc. are really just the new HBOs, Showtimes, and FX Networks on the block; and no matter how the landscape looks in five or ten years, there is no reason to believe that the copyright interests of the leading producers, whoever they may be, will be any less relevant than they are today. Even more to the point, the copyright framework is essential for the independent writer currently banging away on a new work that she hopes to sell to one of these entities.

Similarly, for all the talk of growth and vitality—and there is evidence of both—the major internet platforms still imply futures that cannot easily be measured by the metrics of the current market.  It wasn’t all that long ago that we all jumped onto Facebook, which is now considered an essential platform for both individuals and businesses. But if my 15-year-old and her friends are any indication, Facebook’s future is questionable because these teens have abandoned the platform as a place for “old people.” This does not mean Zuckerberg and Co. won’t come up with a way to regain that market as it enters adulthood, but it does suggest that the social media market we have today may not look anything like what we will have in the relatively near future (see MySpace).  And if anybody can claim to know the precise role of safe harbors in this uncertain future, then I suspect a crystal ball is somewhere in the room.

The Crystal Ball in the Room

Speaking of fortune-telling, the most substantial quote from the Internet Association letter may be the one which states that “One recent study found that weakened safe harbors for online intermediaries would eliminate over 425,000 American jobs and lead to an annual loss of $44 billion in US GDP.”  Sounds compelling if nobody reads the study, which the IA can assume will be the case. But I read the study (which was not surprisingly commissioned by the Internet Association) authored by Christian M. Dippon, PhD at the private firm NERA Economic Consulting.

While stipulating that I may be undervaluing some aspect of Dippon’s work, the general approach of the study hopes to provide evidence to support this conclusion:  that altering (i.e. weakening) safe harbors would lead to crippling litigation that would then result in higher prices passed onto consumers.  This would in turn reduce demand for certain services, costing jobs and investment in the otherwise robust tech and internet sectors. Both the premises and the research appear flawed.

For one thing, it is false to assume that readjusting corporate liability through legislative reform can only lead to “crippling litigation.”  To the contrary, if the statutory provisions of the safe harbors were amended to restore their original intent while mitigating their unintended harm, this would more likely lead to changes in the best practices of those corporations seeking to avoid liability than it would inexorably lead to more litigation.  It is in fact the worst practices of many service providers where rights-holders find fault—practices that have often been obscured by the dysfunctional DMCA as a tool of enforcement.

In fact, the lack of rigor in the study in this regard is revealed by its reference to the BMG v Cox case as exemplary of the kind of litigation that would supposedly run amok under an amended safe harbor regime.  Having acknowledged in the early part of his paper that DMCA is a conditional shield for service providers, Dippon then fails to recognize that Cox lost that case precisely because it failed to meet those statutory conditions.  Given that the internet industry has tried to portray Cox in a similar light, its emphasis in this study suggests that the IA perhaps fed NERA this example and that nobody at NERA did careful research into the case.

Specifically, the study seeks to support its conclusions by means of consumer surveys on the use of search and cloud storage services, determining that a rise in prices for cloud storage would reduce demand for these services; and determining that increased exposure to more intrusive advertising would reduce the demand in search.  These increases in prices and/or intrusive advertising are assumed to result from the aforementioned increase in litigation, which is itself highly speculative.

Perhaps most telling is that in order to calculate the potential price increase for cloud storage, the author references MP3Tunes, which was found guilty of copyright infringement and paid damages of $41.5 million.  Perhaps this case would be a valid baseline if it were not possible for consumers to use a cloud storage service that is not also in the copyright infringement business. But this is not a reality.

For instance, like a lot of consumers, I use Dropbox, which is neither in the infringement business nor presently more vulnerable to litigation as a result of the MP3Tunes outcome.  This legal storage business will also not be more vulnerable to litigation under the kind of amended safe harbor regime rights holders seek domestically; and it especially would not be more vulnerable to litigation if we do not transpose our current safe harbor language into new trade agreements.

There are a number of large leaps, assumptions, and omissions in the NERA study, despite IA’s leaning on it to predict potential economic losses like 425,000 jobs.  For instance, while it is true that a high-paying tech job does support several other jobs in the economy, this is too broad a view to take without also accounting for the ways in which several of the IA member companies simultaneously threaten many jobs in various sectors.

While exporting the safe harbor provisions through FTAs may be of tremendous value to a provider like Google, one cannot take the “job-killer” position seriously without weighing the unprecedented market power of these near monopolies and their capacity to bully the diverse, entrepreneurial middle class on which the economy actually depends.  And that brings us back to the rather insulting notion that these companies represent the “new face of content.”

Inherent Contradiction

Frankly, the Internet Association making this claim is kind of like a state highway department saying it’s the “new face of farming” on the grounds they build and maintain the roads that get food to market. That’s not just me being flip; it’s a comment on the nature of how the safe harbors are meant to function. Remember that the safe harbor provisions are predicated on the assumption that the service provider is not in the content business but is rather in the highway-building business and, therefore, not liable for how people might use the highway.

That’s an analogy the internet industry has employed for years to explain their neutral status vis-a-vis liabilities for copyright infringement and other claims.  And I have to say it takes a deft bit of rhetorical salesmanship to imply to the USTR that these liability shields have substantially contributed to the growth of content-producing platforms like Netflix or the production division of Amazon. The DMCA safe harbors contributed like crazy to the growth of infringe-now-settle-later models like YouTube, but that’s apples-and-oranges relative to a Hulu winning awards for a major production like The Handmaid’s Tale.  Meanwhile, for all the successful YouTubers out there—and they do exist—that’s still not an economy; and the day it becomes the economy, we’re screwed because one company owns the whole damn thing.

So as the rhetoric flies across social media about the absolute necessity of safe harbors to protect free speech, innovation, and jobs, readers should keep in mind that copyright is fundamentally predicated on the right of the individual to exploit his own creative labor, while safe harbors are based on limiting the liability of giant corporations, which has so far enabled them to infringe the rights of many individuals.  So, I agree with the Internet Association that “balance” is key in these provisions, but I disagree with their assertion that the status quo has achieved anything of the kind.

Image sources:

Digital Umbrella by maxkabakov

NAFTA Map by michal812

Crystal Ball by Kzenon

Internet Association asks Trump to keep sticking it to creators.

ia-letter

On Monday, the Internet Association, which represents most of the major online platforms, sent a letter to the president-elect asking that his administration show support for the the status quo of the CDA and the DMCA in order to sustain “innovation and free expression” online.  But for the date and the name Trump, the letter is a boilerplate industry position arguing that the OSPs’ limited-liability for actions like copyright infringement is the reason we consumers enjoy all the prosperity being fostered by the internet.  Of course, I am moved to ask, even in a reluctant spirit of bipartisanship, what prosperity?

Setting aside all the vitriol and hate-speak for a moment (and it is very hard to set aside), the primary rationale voters cited in the exit polls for their votes was a “Desire for change.” So many Americans are apparently feeling anxious about their economic prospects that they are literally grasping at straws at this point.  In this regard, both parties are guilty of dissembling on the promise to “bring jobs back” when speaking to working-class voters—projecting a false image of middle-class, manufacturing jobs returning while simply ignoring the reality of automation. Even if a new factory is built in Pennsylvania, it’s mostly going to be run by robots.

Meanwhile, the internet industry is asking the presumptive change agent that is the president-elect to support the entrenchment of 20-year-old statutes that have failed to produce anything like middle-class, economic prosperity to replace what those statutes have actually cost us.  As the letter to Trump states …

“Intermediary liability laws and policies protect free speech and creativity on the internet. This, in turn, generates substantial value for our economy and society through increased scale, greater diversity, and lowered barriers to entry for creators and entrepreneurs.” 

That sounds very pretty, but where’s the beef?  We can count the money that no longer goes into the pockets of authors, music makers, filmmakers, photographers, journalists, etc. And we can count the supporting jobs and businesses those industries no longer sustain; but where is the middle-class prosperity that’s replacing those losses—all that “substantial value for our economy” the internet industry keeps talking about?  Because if people have been enjoying that prosperity, then why all the economic anxiety?  What about the millions of voters who were on the fence about Trump but are simply so worried about dwindling economic opportunity that they figured some change—any change—was worth a shot?

The internet industry is still selling roulette economics dressed up as entrepreneurism and using that pitch to justify stealing economic value from hard-working creators. I know the internet industry largely campaigned against Trump because they personally view themselves as progressives, but from a policy perspective with regard to issues like DMCA safe harbors, I’m surprised the Internet Association wouldn’t have expected a casino owner to be an ideal ally to their way of viewing the economy.  After all, the YouTube version of “prosperity” is exactly the same as a casino. A handful of big winners makes new creators forget that most who try will lose while the house always wins. They dangle stories like PewDiePie just like golden dollar signs in a casino to convince creators there is a new way to “make it” in a market where they no longer need to care about owning the rights to their work.

Maybe it’s time for the leaders in Silicon Valley to do some soul-searching and decide whether they truly care to benefit people the way they keep claiming they do; or if they just want to protect their bottom line.  There are members of the Internet Association who are more pragmatic about finding common ground with authors and creators, some who are more willing to sit down and discuss practical and voluntary solutions to solve challenges like mass infringement and other exploitations of creative work.

Other members are less inclined to this approach, given to protectionist responses and divisive PR aimed at creators seeking voluntary and legislative measures to mitigate mass infringement.  But these folks should make up their minds.  You can’t be for the people and be anti-individual rights at the same time; and the right to protect one’s ownership in expressive works is an individual right. In fact, it happens to be the first individual right mentioned in the Constitution.  Time for Silicon Valley to put down its playbook and think more humanely about the future.