legislation  

Handke, C., Bodó, B., & Vallbé, J. J. (submitted). The Value Of Online Licenses For Recorded Music. Journal of Cultural Economics.

A fundamental question in cultural industries is how to cope with the widespread use of digital ICT for unauthorized copying. Over 15 years ago, the explosive growth of the file-sharing network Napster put the issue on the agenda of policy-makers and stakeholders. So far, neither private nor public copyright enforcement measures have resolved the issue.

This paper discusses whether a compensation system (CS) for recorded music – endowing private Internet subscribers with the right to download and use works in return for a fee – would be welfare increasing under current market conditions. It reports the results of a discrete choice experiment conducted with a representative sample of the Dutch population consisting of 4,986 participants. The Internet penetration rate in the Netherlands is 95%, one of the highest worldwide (Eurostat 2014). The Netherlands also entertain a system of levies on copying technology, so that basic elements of a CS should be familiar to many residence.

We find that applied only to recorded music, a mandatory CS could increase the welfare of rights holders and users in the Netherlands by over €600 million per year (over €35 per capita). This far exceeds the current sales value of recorded music of ca. €144 million. Even if a CS were to substitute all of the current sales of recorded music and provided no cost savings, it could simultaneously increase user welfare and rights holder revenues at a price that constitutes a reasonable surplus split. According to our results, this is achieved over a broad range of CS user fees, for example between ca. €1.74 and €9.25 for a CS that is mandatory for all households with Internet subscription.

Some market conditions in the Netherlands make this result particularly noteworthy. On the one hand, during data collection unauthorized private copying from unlawful sources was not outlawed in contrast to some other European countries. On the other hand, the digital market for recorded music in the Netherlands is relatively advanced. In 2012, the year preceding data collection, the digital market in the Netherlands already accounted for 31% of all revenues in the primary market for recorded music, in which authorized services make copies of recordings available to end-users (IFPI 2013). Given lower average retail prices for digital copies, the share of ‘digital’ in unit sales would be higher. Music subscription services and ad-supported online music services accounted for 54% of digital revenues. Residents of the Netherlands thus report substantial willingness to pay (WTP) for participation in a compensation system covering recorded music, in spite of (1) virtually no legal risk associated with private copying from unlawful sources at the time of data collection, and (2) availability and widespread use of authorized digital music services and in particular music subscriptions.

The paper is structured as follows: section 2 briefly discusses digitization in the copyright industries and the literature on CS. Section 3 describes the application and limitation of contingent valuation methods to value untraded goods and discrete choice experiments in particular, and provides information on the method and data used in this paper. Section 4 describes basic results and section 5 presents estimates the effect of several CS options on user welfare and rights holder revenues. Section 6 discusses a number of limitations and extensions to our assessment. Section 7 presents main conclusions.

 

 

Bodó, B. (forthcoming). Hacktivism 1-2-3. Internet Policy Review

This short essay explores how the notion of hacktivism changes due to easily accessible, military grade Privacy Enhancing Technologies (PETs). Privacy Enhancing Technologies, technological tools which provide anonymous communications and protect users from online surveillance enable new forms of online political activism. Through the short summary of the ad-hoc vigilante group Anonymous this article describes hacktivism 1.0 as electronic civil disobedience conducted by outsiders. Through the analysis of Wikileaks, the anonymous whistleblowing site, it describes how strong PETs enable the development of hacktivism 2.0 where the source of threat is shifted from outsiders to insiders, who have access to documents with which power can be exposed, and who, using PETs can anonymously engage in political action. We also describe the emergence of a third generation of hacktivists who use PETs to disengage and create their own autonomous spaces rather than to engage with power through anonymous whistleblowing.

The future of copyright amendments crowdsourced by the Finnish public appear to be in doubt. The citizen-drafted proposals, which received 50,000 signatures, seek to decriminalize file-sharing, but Finland’s Education and Culture Committee now wants to reject the historic initiative.

via Finland Wants to Kill Crowdsourced Copyright Law | TorrentFreak.

Austrian Tor Exit Node Operator Found Guilty As An Accomplice Because Someone Used His Node To Commit A crime

from the bad,-bad-news dept

Three years ago we wrote about how Austrian police had seized computers from someone running a Tor exit node. This kind of thing happens from time to time, but it appears that folks in Austria have taken it up a notch by… effectively now making it illegal to run a Tor exit node. According to the report, which was confirmed by the accused, the court found that running the node violated §12 of the Austrian penal code, which effectively says:

Not only the immediate perpetrator commits a criminal action, but also anyone who appoints someone to carry it out, or anyone who otherwise contributes to the completion of said criminal action.

In other words, it’s a form of accomplice liability for criminality. It’s pretty standard to name criminal accomplices liable for “aiding and abetting” the activities of others, but it’s a massive and incredibly dangerous stretch to argue that merely running a Tor exit node makes you an accomplice that “contributes to the completion” of a crime. Under this sort of thinking, Volkswagen would be liable if someone drove a VW as the getaway car in a bank robbery. It’s a very, very broad interpretation of accomplice liability, in a situation where it clearly does not make sense.

via Austrian Tor Exit Node Operator Found Guilty As An Accomplice Because Someone Used His Node To Commit A crime | Techdirt.

The Law Library of Congress has digitized its collection of pre-1923 piracy trial. This historical collection of piracy trials is critical for understanding how the various nations of the world handled piracy issues before the year 1900. The full texts of these titles are available from the bibliography listed below.

via Piracy Trials | Law Library of Congress.

The error message that launched this whole investigation.

Darrell Whitelaw / Twitter

For years now, Internet users have accepted the risk of files and content they share through various online services being subject to takedown requests based on the Digital Millennium Copyright Act (DMCA) and/or content-matching algorithms. But users have also gotten used to treating services like Dropbox as their own private, cloud-based file storage and sharing systems, facilitating direct person-to-person file transfer without having to worry.

This weekend, though, a small corner of the Internet exploded with concern that Dropbox was going too far, actually scanning users’ private and directly peer-shared files for potential copyright issues. What’s actually going on is a little more complicated than that, but it shows that sharing a file on Dropbox isn’t always the same as sharing that file directly from your hard drive over something like e-mail or instant messenger.

The whole kerfuffle started yesterday evening, when one Darrell Whitelaw tweeted a picture of an error he received when trying to share a link to a Dropbox file via IM. The Dropbox webpage warned him and his friend that "certain files in this folder can’t be shared due to a takedown request in accordance with the DMCA."

Whitelaw freely admits that the content he was sharing was a copyrighted video, but he still expressed surprise that Dropbox was apparently watching what he shared for copyright issues. "I treat [Dropbox] like my hard drive," he tweeted. "This shows it’s not private, nor mine, even though I pay for it."

In response to follow-up questions from Ars, Whitelaw said the link he sent to his friend via IM was technically a public link and theoretically could have been shared more widely than the simple IM between friends. That said, he noted that the DMCA notice appeared on the Dropbox webpage "immediately" after the link was generated, suggesting that Dropbox was automatically checking shared files somehow to see if they were copyrighted material rather than waiting for a specific DMCA takedown request.

Dropbox did confirm to Ars that it checks publicly shared file links against hashes of other files that have been previously subject to successful DMCA requests. "We sometimes receive DMCA notices to remove links on copyright grounds," the company said in a statement provided to Ars. "When we receive these, we process them according to the law and disable the identified link. We have an automated system that then prevents other users from sharing the identical material using another Dropbox link. This is done by comparing file hashes."

Dropbox added that this comparison happens when a public link to your file is created and that "we don’t look at the files in your private folders and are committed to keeping your stuff safe." The company wouldn’t comment publicly on whether the same content-matching algorithm was run on files shared directly with other Dropbox users via the service’s account-to-account sharing functions, but the wording of the statement suggests that this system only applies to publicly shared links.

We should be clear here that Dropbox hasn’t removed the file from Whitelaw’s account; they just closed off the option for him to share that file with others. In a tweeted response to Whitelaw, Dropbox Support said that "content removed under DMCA only affects share-links." Dropbox explains its copyright policy on a Help Center page that lays out the boilerplate: "you do not have the right to share files unless you own the copyright in them or have been given permission by the copyright owner to share them." The Help Center then directs users to its DMCA policy page.

Dropbox has also been making use of file hashing algorithms for a while now as a means of de-duplicating identical files stored across different users’ accounts. That means that if I try to upload an identical copy of a 20GB movie file that has already been stored in someone else’s Dropbox account, the service will simply give my account access to a version of that same file rather than allowing me to upload an identical version. This not only saves bandwidth on the user’s end but significant storage space on Dropbox’s end as well.

Some researchers have warned of security and privacy concerns based on these de-duplication efforts in the past, but the open source Dropship project attempted to bend the feature to users’ advantage. By making use of the file hashing system, Dropship effectively tried to trick Dropbox into granting access to files on Dropbox’s servers that the user didn’t actually have access to. Dropbox has taken pains to stop this kind of "fake" file sharing through its service.

In any case, it seems a similar hashing effort is in place to make it easier for Dropbox to proactively check files shared through its servers for similarity to content previously blocked by a DMCA request. In this it’s not too different from services like YouTube, which uses a robust ContentID system to automatically identify copyrighted material as soon as it’s uploaded.

In this, both Dropbox and YouTube are simply responding to the legal environment they find themselves in. The DMCA requires companies that run sharing services to take reasonable measures to make sure that re-posting of copyrighted content doesn’t occur after a legitimate DMCA notice has been issued. Whitelaw himself doesn’t blame the service for taking these proactive steps, in fact. "This isn’t a Dropbox problem," he told Ars via tweet. "They’re just following the laws laid out for them. Was just surprised to see it."

via Dropbox clarifies its policy on reviewing shared files for DMCA issues | Ars Technica.

The Government of Antigua is planning to launch a website selling movies, music and software, without paying U.S. copyright holders. The Caribbean island is taking the unprecedented step because the United States refuses to lift a trade “blockade” preventing the island from offering Internet gambling services, despite several WTO decisions in Antigua’s favor. The country now hopes to recoup some of the lost income through a WTO approved “warez” site.

Antigua and Barbuda is a small country in the Caribbean that for years had a flourishing gambling industry.

A few years ago 5% of all Antiguans worked at gambling related companies. However, when the U.S. prevented the island from accessing their market the industry collapsed.

“What was once a multi-billion dollar industry in our country, employing almost 5% of our population has now shrunk to virtually nothing,” Antigua’s High Commissioner to London, Carl Roberts, said previously.

Hoping to rebuild the gambling business Antigua filed a dispute at the World Trade Organization (WTO), which they won.

In 2005 the WTO ruled that the US refusal to let Antiguan gambling companies access their market violated free-trade, as domestic companies were allowed to operate freely. In 2007 the WTO went a step further and granted Antigua the right to suspend U.S. copyrights up to $21 million annually.

TorrentFreak is informed by a source close to Antigua’s Government that the country now plans to capitalize on this option. The authorities want to launch a website selling U.S. media to customers worldwide, without compensating the makers.

The plan has been in the works for several months already and Antigua is ready to proceed once they have informed the WTO about their plan. Initially the island put the topic on the WTO meeting last month, but the U.S. blocked it from being discussed by arguing that the request was “untimely.”

This month Antigua will try again, and if they succeed their media hub is expected to launch soon after.

Antigua’s attorney Mark Mendel told TorrentFreak that he can’t reveal any details on the plans. However, he emphasized that the term “piracy” doesn’t apply here as the WTO has granted Antigua the right to suspend U.S. copyrights.

“There is no body in the world that can stop us from doing this, as we already have approval from the international governing body WTO,” Mendel told us.

TorrentFreak is in the process of obtaining details of the content to be offered and the prices to be charged. One option would be to ask users for $5 a month in return for unlimited access to U.S. media.

As predicted, the suggestion to suspend U.S. copyrights is already meeting resistance from United States authorities.

“If Antigua actually proceeds with a plan for its government to authorize the theft of intellectual property, it would only serve to hurt Antigua’s own interests,” the U.S warned in a letter to the WTO last month.

According to the letter Antigua will ruin their chances of getting a settlement should they approve a site that sels U.S. copyrighted goods without compensating the makers.

“Government-authorized piracy would undermine chances for a settlement that would provide real benefits to Antigua. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries,” the U.S. added.

Antigua doesn’t appear to be impressed much by these threats and is continuing with its plan.

If the Antiguan media portal indeed launches, it will make headlines all across the world, which may result in the site becoming one of the larger authorized suppliers of U.S. media on the Internet.

via Antigua Government Set to Launch “Pirate” Website To Punish United States | TorrentFreak.

According to the Federal Court, RapidShare has to take all “technically and economically reasonable precautions” without compromising its business model to ensure that its users do not upload Atari’s game. The Court also noted that by not installing a word filter RapidShare may have already breached the “reasonable” threshold.One of the additional steps that the Court said RapidShare must take is to monitor a “manageable number” of third-party sites that offer “link collections” of content available on RapidShare. Should it find them indexing a copy of Atari’s game available on RapidShare it should then delete it from its servers.

via Supreme Court: RapidShare Liable For Copyright Infringement – Sometimes | TorrentFreak.According to the Federal Court, RapidShare has to take all “technically and economically reasonable precautions” without compromising its business model to ensure that its users do not upload Atari’s game. The Court also noted that by not installing a word filter RapidShare may have already breached the “reasonable” threshold.One of the additional steps that the Court said RapidShare must take is to monitor a “manageable number” of third-party sites that offer “link collections” of content available on RapidShare. Should it find them indexing a copy of Atari’s game available on RapidShare it should then delete it from its servers.

via Supreme Court: RapidShare Liable For Copyright Infringement – Sometimes | TorrentFreak.

.http://fortunebrainstormtech.files.wordpress.com/2012/04/041112-us-v-apple-complaint.pdfhttp://fortunebrainstormtech.files.wordpress.com/2012/04/041112-us-v-apple-complaint.pdf

Allowing students access to unpaid, small excerpts of copyrighted works promotes the spread of knowledge because it reduces the cost of education, the judge said. On the other hand, decreased income for publishers could reduce their ability to produce academic textbooks and scholarly works, thereby diminishing the spread of knowledge.Evans said that “decidedly small” excerpts could be copied by Georgia State. In most circumstances, she determined, it is permissible for universities and colleges to copy 10 percent of a book or one chapter of a book with 10 or more chapters.Brandon Butler, director of public policy initiatives for the Association of Research Libraries, said the publishers lawsuit had had a chilling effect on university libraries. “There was a feeling of being under siege,” he said. “They took us to court saying we were shameless pirates.”

via Judge rules largely for Georgia State in copyright case  | ajc.com.Allowing students access to unpaid, small excerpts of copyrighted works promotes the spread of knowledge because it reduces the cost of education, the judge said. On the other hand, decreased income for publishers could reduce their ability to produce academic textbooks and scholarly works, thereby diminishing the spread of knowledge.Evans said that “decidedly small” excerpts could be copied by Georgia State. In most circumstances, she determined, it is permissible for universities and colleges to copy 10 percent of a book or one chapter of a book with 10 or more chapters.Brandon Butler, director of public policy initiatives for the Association of Research Libraries, said the publishers lawsuit had had a chilling effect on university libraries. “There was a feeling of being under siege,” he said. “They took us to court saying we were shameless pirates.”

via Judge rules largely for Georgia State in copyright case  | ajc.com.

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