Archive for August, 2019

Hombres Good and Bad: Why Did SEC Allow Cloudflare to IPO?

August 20, 2019 Leave a comment

Cloudflare describes itself in its IPO documents (Form S-1):

We have built a global cloud platform that delivers a broad range of network services to businesses of all sizes and in all geographies…

What Cloudflare doesn’t tell you is that it is also the Internet provider of choice for a host (no pun intended) of unsavory and in some cases likely entirely illegal businesses that use its platform for bad stuff.  How to they get away with it?  Well…that depends on what the meaning of “it” is.

Cloudflare, you see, means well.  And that’s what counts in the Internet economy.  There must be a TED Talk about doing bad with good intentions.  For example, its mission statement:

Cloudflare’s mission is to help build a better Internet.

Like don’t be evil, dude.

The problem is that it’s not just that Cloudflare fell in with bad company–Cloudflare seems to have been the platform of choice for really bad company.  My bet is that wasn’t an accident.

But here’s the curious thing–the Security and Exchange Commission doesn’t seem to have looked too hard at what Cloudflare is up to.  Even when the SEC is put on notice of really nasty stuff that you would expect to see in a different government document–namely an indictment.

Cloudflare evidently was the global cloud platform for both the Daily Stormer and 8Chan.  Both are dealt with in a single “risk factor” in Cloudflare’s S-1 addressing “negative publicity”:

Activities of our paying and free customers or the content of their websites or other Internet properties, as well as our response to those activities, could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and others.

Activities of our paying and free customers or the content of their websites and other Internet properties could cause us to experience significant adverse political, business, and reputational consequences with customers, employees, suppliers, government entities, and other third parties. Even if we comply with legal obligations to remove or disable customer content, we may maintain relationships with customers that others find hostile, offensive, or inappropriate. For example, we experienced significant negative publicity in connection with the use of our network by The Daily Stormer, a neo-Nazi, white supremacist website, around the time of the 2017 protests in Charlottesville, Virginia. We also received negative publicity in connection with the use of our network by 8chan, a forum website that served as inspiration for the recent attacks in El Paso, Texas and Christchurch, New Zealand. We are aware of some potential customers that have indicated their decision to not subscribe to our products was impacted, at least in part, by the actions of certain of our paying and free customers. We may also experience other adverse political, business and reputational consequences with prospective and current customers, employees, suppliers, and others related to the activities of our paying and free customers, especially if such hostile, offensive, or inappropriate use is high profile.

Conversely, actions we take in response to the activities of our paying and free customers, up to and including banning them from using our products, may harm our brand and reputation. Following the events in Charlottesville, Virginia, we terminated the account of The Daily Stormer. Similarly, following the events in El Paso, Texas, we terminated the account of 8chan. We received significant adverse feedback for these decisions from those concerned about our ability to pass judgment on our customers and the users of our platform, or to censor them by limiting their access to our products, and we are aware of potential customers who decided not to subscribe to our products because of this.

Ah, negative publicity is the issue, you see, because that affects profitability.  Because they take money and are willing too debase themselves for an internet subscriber account.  So it’s not that these sites did anything intrinsically bad, it’s that Cloudflare got caught doing business with them and they got “negative publicity.”

I’m really surprised that the SEC Examiner who processed this S-1 allowed all this stuff to just sail right through as they opened the door to the public markets for these soulless technocrats.  They used to give you the microbial scrub at the SEC before they let you feed at the public trough, but I guess those days are gone.

And you have to wonder who wasn’t minding the store when Cloudflare’s lawyers passed through the Internet trope of “censorship”.  A private company terminating an account of sickos is not censorship.  I don’t know how much “judgement” it takes to figure out that maybe you don’t want to be in business with the Daily Stormer or 8Chan.  That’s all.  There’s no grandiose mystery to it, there’s no “judgement” and there’s definitely no “censorship” (which is what the government does).  There’s just making a decision about who you are and who you want to associate yourself with.

This was not lost on Rep. Ted Deutch who recently asked why the Library of Congress was hosted by Cloudflare.  Good question.  You know, they take money from hombres good and bad.

Texas Bar Section Announces Nominations are Open for the Cindi Lazzari Artist Advocate Award — Artist Rights Watch

August 16, 2019 Comments off

We’re pleased to help get out the word that nominations are open for the Cindi Lazzari Artist Advocate Award for “heroes and heroines” involved with artist advocacy in all Texas communities.  For Texas readers, there’s info below about how to nominate.  If you’re not in Texas you may want to look into whether your community has a similar award.  If not, you might consider starting one.

If you would like to nominate someone for the award, you may use this form.


The State Bar of Texas Entertainment and Sports Law Section (TESLAW) announced that nominations for the Cindi Lazzari Artist Advocate Award are open now until 11:59 pm Central Time on October 1, 2019.  The award is named for the late Cindi Lazzari, a leading Texas attorney who went far beyond the call of duty in her efforts to protect the rights of artists in the music industry.

In these challenging times for Texas musicians, TESLAW wants to hear about the exciting heroes and heroines who carry on the tradition of Cindi’s good works in all the music communities across Texas.  Nominees need not be attorneys.

Previous recipients of the Lazzari Award include Juan Tejeda (musician, arts administrator and activist), Robin Shivers (artist manager and founder of the Health Alliance for Austin Musicians), Texas Accountants and Lawyers for the Arts, SIMS Foundation, Nikki Rowling (co-founder of Austin Music Foundation and author of the Austin Music Census), Casey Monahan (the first head of the Governor’s Music Office) and Margaret Moser (the journalist and long-time music editor for the Austin Chronicle).

Nominations for the 2019 Lazzari Award will be accepted through October 1, 2019 and should be sent by e-mail only to The nomination email should include (1) the nominee’s name and contact information; (2) a one-page statement as to why the nominating individual believes the nominee should receive the award; and (3) a biography of the nominee.

TESLAW will present the Cindi Lazzari Artist Advocate Award at the annual Entertainment Law Institute, to be held in Austin November 20-22, 2019.

For further information, please see TESLAW’s web page at

via Texas Bar Section Announces Nominations are Open for the Cindi Lazzari Artist Advocate Award — Artist Rights Watch

Must Read Guest Post by @kerrymuzzey: YouTube’s Latest Deceptive Tactic

August 14, 2019 Comments off

[We’re thrilled to have a chance to publish an important Twitter thread by composer Kerry Muzzey that crystalizes a number of phenomena:  How Kerry caught YouTube using Content ID as a tool to extend the period of time that they can profit from infringement (or the “piracy profit window”), how draining it is for indies to chase YouTube (the “ennui of learned helplessness”), and how the cost of chasing YouTube reduces (or erases) any income from the video monopolist (the “Great Streaming Disappointment”). Kerry also provides a timely illustration of both why we need copyright small claims and one reason Google is sending in their proxies to fight it.  We appreciate Kerry giving us permission to post his thread and for being “here for the long haul”.]

I’m an indie guy.  I would love to just spend my time making more music, pitching, demo’ing for jobs. But like all indies, I have to make a choice—do I let YouTube and others just rip me off or do I try to stop it despite the burdens.

Here’s a new YouTube tactic that I first thought was a mistake when it happened recently, but they tried it again today, so now I think it’s pretty much just “the new stall tactic.” 

I recently found a bunch of unlicensed uses of my music on a Chinese broadcaster’s channel: these were TV shows where my tunes were used as underscore and then the series were put on YouTube and monetized. 

It took a couple years for Content ID to locate these uses and  during that time both YouTube and the broadcaster were able to co-monetize a couple million views of these shows. 

When I caught on to what was happening, I did my takedowns through the Content ID dashboard (meaning that YouTube itself located the uses and presented them to me in my Content ID dashboard) but they didn’t process my takedowns, which was weird.

I emailed YouTube Copyright (there are no names and no direct contacts at Copyright/Legal & you can’t get a name or direct contact person).  “YouTube Copyright” said they needed confirmation of the titles of my works because there was something wrong with my metadata with these particular titles in Content ID. 

Spoiler alert: there was nothing wrong with my metadata: these same works have been active just fine for 6.5 years now, and suddenly when I have claims against a massive China broadcaster YouTube finds there’s a problem with the accuracy of my titles & my metadata when they never have before?? 

Back to my claim—the Music Department at YouTube confirmed that my metadata was fine and accurate after all, and deferred to YouTube Copyright. I sent YT Copyright my copyright registrations for the works in question, reaffirmed that my metadata was fine and reaffirmed the accuracy of my claims: 24 hours later those infringing videos finally came down. 

I thought this was a one-off thing: a glitch. Until this morning when I got a batch of the same emails  from YouTube Copyright saying that there was a problem with my titles and metadata relating to the particular songs that I had struck on another Chinese broadcaster yesterday: videos that have a collective 4,000,000 heavily-monetized views on them from a different one  of China’s largest broadcasters.

But there’s nothing wrong with my metadata or my titles.  These works have been just fine since Feb 2013. So suddenly, 6 years later, there’s a problem with these songs…on the same day when I catch a huge TV network in China having used my music in their shows that were then put on YouTube and co-monetized by YouTube for 2.5 years to the tune of 4,000,000 views, with forced pre-roll ads, forced intermittent ad breaks, bannering, and video-adjacent page advertising, all on a channel in China that has 3,500,000 subscribers and more than 400,000,000 channel views on it. 

I just replied to all of their “problem w/title+metadata” emails with my copyright registrations attached and a re-affirmation of my claims and asked them to lay off the stall tactics and just process my takedowns. Which is NOT gonna go over well with this heavily-monetized channel in China and they’ll probably falsely counter-notify on everything because that’s what usually happens with China. 

But you know what? YouTube has a China problem. And they know it. And they look the other way because they can make a ton of money on those infringing videos. 

The asterisk here, and the “watch this space” moment is something I’ve long suspected and now feel like must be true: YouTube says that it has the same detection thresholds for music in Content ID worldwide, but I don’t believe it.

I think that my continuing discovery of my music in these ex-US programs, years after the fact and only after millions of monetized views have happened, is building up a body of proof towards that theory. 

And if that’s the case – YouTube has a problem.  What happens if YouTube tightens detection thresholds in big ad-sales territories like China with major broadcasters for the purpose of avoiding detection so as to increase ability to monetize what they know is content with 100% unlicensed music? Then YouTube is violating the DMCA and eventually they’re gonna get busted. 

So if you’re a tech person or journalist who’s interested in this sort of thing, here’s the question I would pose directly to YouTube the next time you talk to one of their execs: Does YouTube set different music detection thresholds based on territory, channel subscribership and degree of monetization on a channel? 

Get them on the record. Record their answer, write it down, put it in your article, publish it. Eventually someone has to hold their feet to the fire.  Step 1 is getting them to go on-the-record with their lies or their admission of gaming the system for the sake of ad revenue. 

I’m an indie guy and would love to just spend my time making more music. But until YouTube stops making it OK for giant corporations to steal my stuff and co-monetize it with YouTube itself, I’m stuck in this muck. 

Here for the long haul, – Kerry

@musictechsolve: Vote for Creator and Startup Licensing Education at SXSW

August 7, 2019 Comments off

I have a class in the track titled “TEACHING ARTIST ROYALTIES TO CREATORS AND STARTUPS.”  It follows my philosophy that we need smart artists and smart startups to work together if we all are to succeed.

The class has three purposes:

–A building block approach to teaching artists and songwriters about the principal royalty streams that sustain them.  This is targeted financial literacy which is as critical to artists and songwriters as balancing your checkbook.

–A licensing roadmap overlay for entrepreneurship studies.  It’s far too frequent that entrepreneurs spend more time developing their product roadmap and critical path than they do developing their licensing roadmap side by side with the product.  That way when a startup gets to launch there is less likelihood they will go into the terminal holding pattern or worse–launch without licenses.

–the importance of clean and stable metadata to both artists and startups (and mature companies) and how to accomplish this goal starting with the digital audio workstation.

The class description:

Royalty rates, royalty reporting and earnings are some of the least understood–yet most important–parts of a creator’s career or a startups nightmare. Understanding royalties is as important as understanding how to balance your checkbook. Starting with metadata and simple revenue streams, leading to complex calculations and government run compulsory licenses and sometimes impenetrable royalty statements, the workshop gives educators tools and building blocks to teach the subject.

I’d really appreciate your vote for the class in the SXSW Panel Picker here. To vote, you just need to sign in to PanelPicker or create a free SXSW account with your email only.

PledgeMusic Disclosures Would Bring Sunlight to Fans and Artists and @InsolvencyGovUK

August 6, 2019 Comments off

There appears to be some unusual statements regarding the unusual PledgeMusic liquidation bankruptcy currently underway in the UK involving at least one of the Pledge companies, Limited.

In a nutshell, Mr. Benji Rogers (who is very quick to haul out the implied, ostensible or actual invisibility cloak of working on a “voluntary basis”) has posted and also told Variety:

Note: PledgeMusic cofounder Benji Rogers, who left the company in 2016 but returned on a voluntary basis earlier this year, contested that claim in a blog post last week: “Pledge pursued a range of sale options with a basic hierarchy to try to achieve the best outcome for the creditors,” it reads in part. “In order for an administration to be successful any sale would have needed to generate a minimum price and although we were in contact with several interested parties, ultimately none offered that price and so we were unfortunately unable to appoint an administrator. The final and least desired option was to place the company into liquidation which was done on the 31st of July.”

He has also said something similar in the linked Medium post:

The problem for those in Mr. Rogers neighborhood is that the company never made a public statement disclosing that liquidation was at least a plan and that the liquidation filing had already occurred as of June 13.  Why is that important?

A number of reasons, but let’s start with the lack of candor toward those whom I would call the coerced investors in Pledge, being (1) the fans who gave them money to hold for the artists in good faith, and (2) the artists who relied in good faith on Pledge to pay them that money.  The artists who themselves undertook obligations to vendors recommended by Pledge in good faith and (3) the vendors who agreed in good faith to undertake reciprocal obligations to perform based on the expectation of future payment by Pledge.  There are probably other categories of coerced investors as well.

Here is the required bankruptcy notice from the London Gazette, which is a newspaper of record for legal notices in the UK.

Pledge Windup

Let’s unpack what was in that notice.  One purpose of the publication is to inform the public of an upcoming hearing on whether Pledge should be allowed to wind up.  Since it was the company itself that was filing the petition, it’s pretty safe to say that the only people who might oppose it might be creditors.  Those creditors might show up in court and make various arguments against the petition (subject always to proof), such as anyone running a ponzi scheme should not be allowed to seek the legal protection of the courts, misuse of funds generally, self enrichment, the whole range of comments that one can find about Pledge with a quick review of social media.  Or it could be as simple as why allow a company to wind up that hasn’t filed pubic financials since 2016:

Pledge Companies House

As indicated by the arrow, this petition was published on July 17, nearly a month after it was filed with the court.

Pledge Windup Publication Date

The petition was “presented on 13 June 2019″:

Pledge Windup File Date

It was filed “on behalf of the directors of Limited (the Petitioner)” presumably authorized by a board and shareholder vote at some time prior to June 13.

Pledge Windup Filed By

Often wind up petitions are filed by creditors, including relatively small creditors.–£750 or more.  When the debtor company itself elects to enter wind up, that may be at least an ostensibly legal tactic to get the benefit of any stays of litigation or other protections.

Mr. Rogers seems to be saying that the reason that Pledge filed for winding up is in case they could not find a buyer after months of looking, a buyer that would allow the company to enter administration (which is like a reorganization where the company comes out on the other side and continues to operate).  What he does not explain is why the company did not share this situation and strategy with the coerced investors, namely the fans, artists and vendors.

This is particularly odd because winding up a company is one of the biggest events in any company’s history.  No one person makes this decision in some kind of autocratic ruling in a company with as complex a corporate structure as Pledge, SPVs and all–it typically will require at least a board vote if not a shareholder vote as well.  This vote is based on a “resolution”.  When that resolution is put to a vote, it is usually accompanied by statements from at least the officers (and directors in the case of a shareholder vote), and a fairly detailed explanation of why ending the company’s life is the right course of action.   There is typically a set period of time that shareholders have to respond to the vote notice, further calling into question the sequence of events at Pledge.  It would not be unusual to see a somewhat detailed discussion of the company’s financial situation that gave rise to the wind up, WARN Act analysis if applicable, and other downside analysis, tax payments, potential claims, some or all of which the Official Receiver at the Insolvency Service may also review now that the petition order is granted.

If the company’s minute book and board records were shambolic up to that vote, there is usually a rush to clean up any missing minutes (which is where resolutions usually start before they are voted on by the board in a telephonic or in-person board meeting).  That final vote is usually carefully drafted because when the company submits to the jurisdiction of the courts and their agencies (the Insolvency Service and the Official Receiver in this case) it’s entirely possible that someone in the government is going to start with the basics–a close review of the corporate maintenance records.  Failing to keep proper books may be a sign of things to come, so that’s one reason they may start there.

What this should say to you is that there’s an easy way to clear this up–just publish the board resolution authorizing the wind up petition.  The filing was on behalf of the board of directors, after all so it’s not like they were responding to a creditor complaint.

And as Mr. Rogers said, this was all part of the plan, and the plan should be written down to one degree or another in board resolutions authorizing continued efforts to sell the company (even by a volunteer) or in the alternative wind it up if no sale can be had.

And here’s another reason that board resolution is important, both its existence and what it says.  When the notice was filed in the Gazette it would have been discovered in any due diligence review of the company by a potential buyer.  If I found it with a casual search, a buyer would have found it in a purposeful one.  So keeping it “secret” for strategic reasons with a potential buyer was just not going to fly, particularly because a buyer would also get the corporate records as part of their due diligence (as well as what appears to be the horror show financials).  And if it got to the asset purchase agreement stage, there’s any one of a number of customary representations that Pledge would have to make that would have triggered this issue.

So why didn’t Pledge publish the petition on their website as early as June 13 when it was filed?

Pledge Windup Objection Date

In order to be heard by the Court at the July 31 hearing, you would have to have given notice to the Court by 4pm GMT on July 30, i.e., close of business the day before.  But if you didn’t know that you had to give that notice, then no one would show up.  American creditors could have hired a lawyer to appear for them as a group, for example, sometimes called an unsecured creditors committee.  Or a pesky unsecured creditors committee that can get underfoot.  And a good way to be fairly certain no one was going to show up would be not to tell anyone through the Pledge website and instead only publish the notice in the London Gazette, a newspaper that artists, fans and vendors were very, very, very unlikely to read.

Pledge Windup Hearing Date

On the hearing date, the only people concerned with the interests of the artists caught up in this thing who were there was UK Music, the very effective trade group representing a wide variety of interest groups in the UK (which was organized by the artist Feargal Sharkey, OBE, lead singer of the Undertones and his extraordinarily able crew–take note US readers, we could use something like this).

UK Music

What did we hear from Pledge?  On or about July 25–six days before the hearing and six weeks or so after filing their petition, the site simply went dark with this message;

pledge statement

Digital Music News noted that an earlier version of the post had additional sentences in bold that was quickly deleted:

The company will go into administration at some point this week or early next which means that any funds received for the assets of Pledge will be distributed to all of the creditors involved.  This will include all of the artists who are owed money.”

Why was that deleted?  Someone knows.

Note as late as July 25 the company was guiding to administration–although that language was changed to the more cagey “work with outside counsel”  (therefor privileged communications if no crimes or fraud were involved).  The company also said it would take “the most appropriate next steps” which could literally mean anything but it seems to me in retrospect that in this case it pretty clearly referenced the wind up petition.  As Paul Resnikoff reported in DMN “Exactly how the board is planning to ‘update’ artists and fans on ‘appropriate next steps’ is unclear, though most likely, there isn’t another word from the company.”

This statement would have been the perfect time to call everyone’s attention to the filing deadline of July 30 for the July 31 hearing.

Mr. Rogers also tells us in a blog post:

This [liquidation] was not the route that I personally wanted for PledgeMusic and I wanted you to know that the last line of the many options that I had to get a sale of the company in administration, was cut on the evening of the 28th of July by text. This was the last viable option that I personally had after all previous attempts failed.

It was actually an option for the company.  So Mr. Rogers knew that the wind up liquidation was going forward on Sunday, July 28–two days before the deadline for notices in the wind up hearing on July 31.  I can’t find any place that he disclosed this impending deadline or its import.

It must be noted that Pledge’s insolvency likely meets two common insolvency tests: balance sheet insolvency and the failure to meet obligations when due.  There may be other liabilities that come to light in the course of the wind up proceeding, such as liabilities relating to taxes or the commingling of funds.

It seems to me that Pledge can make a few disclosures to begin to rehabilitate itself.  I mention these for the record and the list certainly is non-exhaustive.

–Publish the board resolution and voting records authorizing the winding up of the corporation, including all provisions made for paying debts or resolving liabilities, if any;

–Publish the July 25 text Mr. Rogers says he received (which he should have preserved);

–Publish any materials from the company’s accountants regarding their “going concern” warnings from the financials (which they should have preserved);

–Publish a bring down of the company’s financials that they are required to file with Companies House (not filed since 2016 per Companies House, see above);

–disclose which of the other Pledge companies are involved in the wind up;

Pledge Affiliatesand, of course, any US companies; and

–Publish any internal correspondence relating to the decisions to withhold from the creditors the fact that Pledge had filed for wind up on June 13 if such correspondence exists.

While there will be further disclosure to come, these documents would enlighten the public and the Official Receiver as to what are their appropriate next steps.

And here’s a tip:  In future be very skeptical of any company that has “.com” in its corporate name.


Three Issues @HawleyMO Should Address in his Anti-Social Media Addiction Bill

August 5, 2019 1 comment

Senator Josh Hawley recently introduced the The Social Media Addiction Reduction Technology (SMART) Act which is legislation to go after social media addiction.  His main line of attack is through addressing and limiting functionality (you can just hear the handwringing now from the EFF, Public Knowledge, Engine and R Street about censorship, innovation, etc., etc.)

Of course, one underlying issue is what appears to be the endemic loneliness and withdrawal of children and adults.  If you doubt that, just try a search for “12 step social media addiction” or “12 step gaming addiction” or “12 step internet addiction.”  There are a bunch and that usually means the harm is widespread.  Any fines that result from enforcing regulations against the social media profiteers should definitely be spread around to these groups who could put those resources to good use.  All the legislation in the world is unlikely to resolve these underlying social issues.

While Senator Hawley’s ideas have merit, there’s a couple of simple fixes that he might also want to consider.  These fixes sound in our experience in regulating the tobacco industry, or “Big Tobacco.”

I am deeply concerned–as I think artists and songwriters are–that among all the other bad things Big Tech does with music, one big attraction for them is that music is a honeypot for addiction.  So I think we should all care about that.  There are also some policy lifts that don’t just concern us and should be socialized to the broader electorate if for no other reason than the harms affect us all.  Not only are we affected, but I would argue that the harms are doing exactly what they are designed to do–get our children addicted in campaigns that are just as insidious as the Joe Camel campaign.  I’m going to briefly look at the tobacco and social media addictions and then lay out the three ideas.

Tobacco Addiction Additives

I look at social media behavioral addiction through a single lens:  It’s very similar to commercial tobacco substance addiction.  Tobacco is a natural substance that has some addictive properties.  As anyone who has seen Mad Men or followed the work of Edward Bernays will tell you, Big Tobacco conducts sophisticated marketing campaigns to sell its product and the delivery system to the addict–cigarettes instead of needles.

You’ve seen this kind of marketing manipulation–Joe Camel, for example, was tasked with making cigarette smoking cool for kids.


But in addition to marketing, Big Tobacco has used science to make their product even more addictive.  A good primer on this more insidious aspect of their business is the movie The Insider starring Russell Crowe in the role of the whistleblower Dr. Jeffrey Wigand, the former director of research for the Brown & Williamson tobacco company.  As Dr. Wigand famously told Mike Wallace on 60 Minutes, “we’re a nicotine delivery business.”


Dr. Wigand’s research also disclosed what he called the intentional and unintentional additives to tobacco:

Tobacco products are not “natural” products that contain harmless ingredients. Rather, a typical cigarette can contain numerous intentional additives. However, virtually nothing is known about these ingredients. Even worse, nothing is known about the unintentional additives that are the by-products of the growing, handling and manufacture of tobacco products. These unintentional additives or contaminants include pesticides, herbicides and ink from the packaging materials. We are in the dark about how these unintentional additives are affected when burned in conjunction with nicotine and when combusted with other intentional additives.

One big difference between tobacco and social media is that there are no unintentional additives to social media.  All are man-made and under the control of humans, Mrs. Palsgraf. I’ve always said that there is a “Pinto memo” out there somewhere at Facebook, Google, Amazon or Twitter and that Big Tech is going to get taken down by a Jeffrey Wigand-style whistleblower who just can’t take it anymore.  (See Grimshaw v. Ford Motor Co., 119 Cal.App.3d 757 (1981)


DSM 5 and Internet Gaming Disorder

Let’s have a look at the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), the shrink’s bible.  What does DSM-5 say about it?

In the fifth edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM-5), Internet Gaming Disorder is identified in Section III as a condition warranting more clinical research and experience before it might be considered for inclusion in the main book as a formal disorder.

A New Phenomenon

The Internet is now an integral, even inescapable, part of many people’s daily lives; they turn to it to send messages, read news, conduct business, and much more. But recent scientific reports have begun to focus on the preoccupation some people develop with certain aspects of the Internet, particularly online games. The “gamers” play compulsively, to the exclusion of other interests, and their persistent and recurrent online activity results in clinically significant impairment or distress. People with this condition endanger their academic or job functioning because of the amount of time they spend playing. They experience symptoms of withdrawal when pulled away from gaming.

This means that the editorial board of DSM thought there was enough of an issue with Internet Gaming Disorder to warrant including it in DSM-5 with the suggestion that the phenomenon deserved further study with an eye toward including it as a formal disorder.

A closely associated phenomenon is “Internet Addiction Disorder” which is the more generalized version of Internet Gaming Disorder.   “IAD” like “IGD” has not been officially codified within a psychopathological framework, it is the subject of considerable interest and research.  If I had to bet, I would bet that Google uses its academic shills to slow down codification.

In a search of relevant peer reviewed articles at the National Institutes of Health, I came across this title written by a number of doctors:

Internet addiction disorder and problematic use of Google Glass™ in patient treated at a residential substance abuse treatment program.

The abstract describes the findings:

Internet addiction disorder (IAD) is characterized by the problematic use of online video games, computer use, and mobile handheld devices. While not officially a clinical diagnosis according to the most recent version of the Diagnostic and Statistical Manual of Mental Disorders (DSM), individuals with IAD manifest severe emotional, social, and mental dysfunction in multiple areas of daily activities due to their problematic use of technology and the internet….

Over the course of his 35-day residential treatment, the patient noted a reduction in irritability, reduction in motor movements to his temple to turn on the device, and improvements in his short-term memory and clarity of thought processes. He continued to intermittently experience dreams as if looking through the device. To our knowledge, this is the first reported case of IAD involving problematic use of Google Glass™.

And that’s just Google Glass, a product that failed in its 2015 launch but that Google relaunched in 2017 with its “Enterprise Edition.”

Another peer reviewed article at NIH stated:

[S]udden cessation of online social networking (i.e., lack of Internet connection) may in some chronic users cause signs and symptoms that at least partially resemble the ones seen during drug/alcohol/nicotine abstinence syndrome.

Other relevant reading should include Development of a Facebook Addiction Scale, Andreassen et al (2012).

The cracks are starting to show.  In a USA Today op ed by Roger McNamee, who runs a venture capital outfit called Elevation Partners said:

I invested in Google and Facebook years before their first revenue and profited enormously. I was an early adviser to Facebook’s team, but I am terrified by the damage being done by these Internet monopolies….

Facebook and Google get their revenue from advertising, the effectiveness of which depends on gaining and maintaining consumer attention. Borrowing techniques from the gambling industry, Facebook, Google and others exploit human nature, creating addictive behaviors that compel consumers to check for new messages, respond to notifications, and seek validation from technologies whose only goal is to generate profits for their owners….

How does this work? A 2013 study found that average consumers check their smartphones 150 times a day. And that number has probably grown. People spend 50 minutes a day on Facebook. Other social apps such as Snapchat, Instagram and Twitter combine to take up still more time. Those companies maintain a profile on every user, which grows every time you like, share, search, shop or post a photo. Google also is analyzing credit card records of millions of people….

Consider a recent story from Australia, where someone at Facebook told advertisers that they had the ability to target teens who were sad or depressed, which made them more susceptible to advertising. In the United States, Facebook once demonstrated its ability to make users happier or sadder by manipulating their news feed. While it did not turn either capability into a product [yet, that we know of], the fact remains that Facebook influences the emotional state of users every moment of every day. Former Google design ethicist Tristan Harris calls this “brain hacking.”

So both the literature and the anecdotal evidence of insiders leads us to believe that Senator Hawley’s bill is addressing a serious and pervasive societal harm from behavioral addiction profiteers.

Behavioral Addiction Additives


We’re all familiar with the view-selling and fake views problems with YouTube.   Michael H. Keller in the New York Times  takes a deep dive into the skullduggery behind fake views.  Mr. Keller’s post ends with this provocative conclusion:

View-selling sites continue to advertise with apparent impunity. A post on the YouTube Creator Blog warning users against fake views has numerous comments linking to view-selling sites.

“The only way YouTube could eliminate this is if they removed the view counter altogether,” said Mr. Vassilev, the fake-view seller. “But that would defeat the purpose of YouTube.”

That’s an interesting proposition.  Why would removing the view counter defeat the purpose of YouTube? One reason might be that subscriber count is a function of view count, and subscriber count is tied to compensation and perks for YouTube creator channels.

But what about artists?  Can you imagine a marketing plan that doesn’t include YouTube?  Aren’t we told that artists can’t reach an audience without YouTube?  So isn’t the purpose of YouTube to reach an audience rather than produce public views information?  Granted, the person making that assertion is a fake view seller and not a YouTube representative, but a YouTube representative would likely never say such a thing even if they knew it to be true.  Why not?

One reason might be that the view counter, friend counters, the likes, the retweets, the various measurements that demonstrate the re-enforcement of acceptance by “friends”, are an important component of what makes YouTube addictive, just like tobacco companies added ammonia and other chemicals to tobacco to increase its addictive powers.  And the evidence is starting to come in suggesting that it is that addiction that is the real purpose of YouTube and other social media sites.  Senator Hawley’s legislation seeks to control “badges” and the like for users (not creators) unless they increase access to goodies–and I would pick a bone on that clause because it still allows the exploitation of addictive behavior in exactly the manner that should be limited.  By allowing YouTube to integrate measurable success of YouTubers at getting users hooked on a channel, the legislation leaves an enormous loophole and you can bet Google will exploit it.

One source of evidence for social media addiction is from Professor Adam Alter of the NYU Stern School of Business whose book Irresistible: The Rise of Addictive Technology and the Business of Keeping Us Hooked describes in shocking detail just how devious sites like YouTube and Facebook are in delivering the dopamine fix to our brains, and worse yet to our children’s brains.  As Professor Alter told the New York Times:

Today, we’re checking our social media constantly, which disrupts work and everyday life. We’ve become obsessed with how many “likes” our Instagram photos are getting instead of where we are walking and whom we are talking to….

We are engineered in such a way that as long as an experience hits the right buttons, our brains will release the neurotransmitter dopamine. We’ll get a flood of dopamine that makes us feel wonderful in the short term, though in the long term you build a tolerance and want more….

I find it interesting that the late Steve Jobs said in a 2010 interview that his own children didn’t use iPads. In fact, there are a surprising number of Silicon Valley titans who refuse to let their kids near certain devices. There’s a private school in the Bay Area and it doesn’t allow any tech — no iPhones or iPads. The really interesting thing about this school is that 75 percent of the parents are tech executives.

They care about kids, too.  Just not your kids.

And of course those dopamine hits include YouTube subscriber and view counts, Facebook friends and likes and the various other feedback mechanisms that enforce a measurement of public popularity.  Popularity that is an especially powerful motivation for lonely people.

So far, social media addiction profiteering is good business as Spotify billionaire Sean Parker tells us:

“It’s a social-validation feedback loop … exactly the kind of thing that a hacker like myself would come up with, because you’re exploiting a vulnerability in human psychology.” 

“God only knows what it’s doing to our children’s brains,” Parker said.

Of course, as one Silicon Valley entrepreneur who also survived the Dot Bomb Implosion once told me, there’s something really wrong about a world in which Sean Parker is a billionaire.

None of this should come as a surprise–YouTube has a long history of failing to protect children from a host of unsavory activities on YouTube.  A must read post by James Bridle tells us of the truly bizarre goings on at YouTube Kids.

I’ve also been aware for some time of the increasingly symbiotic relationship between younger children and YouTube. I see kids engrossed in screens all the time, in pushchairs and in restaurants, and there’s always a bit of a Luddite twinge there, but I am not a parent, and I’m not making parental judgments for or on anyone else. I’ve seen family members and friend’s children plugged into Peppa Pig and nursery rhyme videos, and it makes them happy and gives everyone a break, so OK.

But I don’t even have kids and right now I just want to burn the whole thing down.

Someone or something or some combination of people and things is using YouTube to systematically frighten, traumatise, and abuse children, automatically and at scale, and it forces me to question my own beliefs about the internet, at every level. 

Given all the harms of social media and the willingness of addiction profiteers to do evil, let’s consider some potential fixes that don’t necessarily involve a knock down drag out legislative fight.

The Three Fixes

Given the similarities to internet addiction and tobacco addiction, let’s take a few ideas from the tobacco regulation campaign that could easily be added on to Senator Hawley’s legislation.

Mandatory Addiction Warning

We know that Big Tech will simply ignore the law until there is a final, nonappealable judgement against them in every jurisdiction conceivable at which point the legislation will be watered down so as to be unrecognizable.  So rather than try to control their functionality, simply require that if they don’t change the functionality they have to put a prominent warning on all pages of their addiction delivery business…I mean, their sites. And this is something that could probably be done today through FTC regulations or as part of settlements with DOJ or FTC.  One of the harms that the FTC could control for would be data scraping and profiling (which of course is one of the many reasons that user capture through addiction is so profitable), as well as false advertising.


Private Cause of Action

The remedies part of Senator Hawley’s legislation does not really get to what strikes fear into the hearts of Big Tech companies: Getting sued by their users, particularly if those suits result in an injunction or really huge tobacco industry level damages.

Bear in mind that Google and Facebook laugh off multi-billion fines of $5 billion or less.  We are not accustomed to this in the law.  If you said Ford had to pay a $5 billion fine, the stock would tank.  When Facebook got a $5 billion fine, their stock went up.  We don’t really know the upper boundaries of that dollar figure.

FB 7-12

But we do know that the damages part of a private cause of action has to be huge.  What I have in mind is a $50 billion class action award, in other words about 10 times what we are accustomed to as a penalty.  I know that sounds a little extreme, maybe quite extreme, but that’s what it will take if the purpose is to change behavior.

I would point out that the $200 billion 1998 Tobacco Master Settlement Agreement involved 48 states led by Mississippi Attorney General Mike Moore recovering their Medicaid costs of treating tobacco-related health care costs from the four largest United States tobacco companies (Philip Morris Inc., R. J. Reynolds, Brown & Williamson and Lorillard).  I don’t think that there’s any reason the same case could not be made against Google, Facebook, Twitter and possibly Amazon (the millennial answer to the Home Shopping Network).

Ask the Government Science Agencies for Their Research the Issue

As a U.S. Senator, Sen. Hawley could simply ask the National Institutes of Health or the National Academy of Sciences for their existing research on the issue.  If they haven’t studied the problem (which I doubt), Senator Hawley can probably get a bipartisan consensus to get them to conduct a front-burner study on the subject.

He may find he is pushing on an open door.  A 2014 study commissioned by Facebook “Experimental evidence of massive-scale emotional contagion through social networks” written by Adam D. I. Kramer of Facebook’s “Core Data Science Team” and two academics from Cornell.  (Cornell was one of the first campuses outside of Harvard to adopt the early version of Facebook) was published in the Proceedings of the National Academy of Sciences but carried an “Editorial Expression of Concern” regarding the study’s methodology:

Questions have been raised about the principles of informed consent and opportunity to opt out in connection with the research in this paper. The authors noted in their paper, “[The work] was consistent with Facebook’s Data Use Policy, to which all users agree prior to creating an account on Facebook, constituting informed consent for this research.”When the authors prepared their paper for publication in PNAS, they stated that: “Because this experiment was conducted by Facebook, Inc. for internal purposes, the Cornell University IRB [Institutional Review Board] determined that the project did not fall under Cornell’s Human Research Protection Program.” This statement has since been confirmed by Cornell University.

Obtaining informed consent and allowing participants to opt out are best practices in most instances under the US Department of Health and Human Services Policy for the Protection of Human Research Subjects (the “Common Rule”). Adherence to the Common Rule is PNAS policy, but as a private company Facebook was under no obligation to conform to the provisions of the Common Rule when it collected the data used by the authors, and the Common Rule does not preclude their use of the data. Based on the information provided by the authors, PNAS editors deemed it appropriate to publish the paper. It is nevertheless a matter of concern that the collection of the data by Facebook may have involved practices that were not fully consistent with the principles of obtaining informed consent and allowing participants to opt out.

My bet is that it wouldn’t take much more than a request from a Senator to get some real research going on this subject.  The challenge, of course, would be to keep Google, Facebook and Twitter from trying to control that research through their various astroturf front groups and academics.


How to Contact the Court in PledgeMusic Case–The Trichordist

August 3, 2019 Comments off

PledgeMusic had posted this information on their website when we checked today:

As a result of the making of the order, the Official Receiver becomes liquidator of the company. Any enquiries should be forwarded to, quoting reference LQD5671373.

We gather that what that means is that if you are (1) an artist who is owed money by PledgeMusic, (2) a fan who gave money to an artist who you think did not receive your money from PledgeMusic, or (3) a vendor who didn’t get paid because PledgeMusic didn’t pay your artist, then you should write to that email address which we assume is for the “Official Receiver” who is now in charge of running the case.  (OK, that does sound like a character out of Harry Potter, but that’s how it is.)

We also assume because Pledge didn’t say that there is a deadline for submitting your claim there probably is one.  That’s probably why PledgeMusic didn’t say what the deadline was, a fact they almost certainly know very well.  Because if you fail to get your claim in on time, there’s more for them in the pot.  Ponzi to the very end.

You should take legal advice about what you should say and how to handle it, but if you can’t afford a lawyer you could say in your email that you think you are owed money, how much and why, and ask them what you should do about it.  It probably wouldn’t hurt to tell them what you have done to try to collect your money from Pledge and the approximate or exact dates you tried to get their attention.

And be sure to tell the Official Receiver if you think Pledge breached its obligations to you or otherwise did you wrong, threatened you, or any other bad stuff.

The Official Receiver probably frequently deals with people who are owed money and have no lawyer so don’t be shy about it.  The Insolvency Service (who actually appoints the Official Receiver) also responded to Chris Castle on Twitter:

Insolvency Service 1

We will keep you posted with more information as we find out.

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