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What’s Good for the Goose: Europe for Creators Asks for Equal Time on YouTube for Their Pro-Article 13 Messages — Artist Rights Watch

March 19, 2019 Comments off

In case you had any doubts, YouTube’s antics in pushing its messaging on copyright reform in Europe should dispel the idea that it is a neutral platform.

When safe harbors for companies like YouTube were created in the US and in Europe 20 years ago, it was with the idea of providing a little latitude to reasonable people acting reasonably on the condition of being a neutral platform–for not creating an app for Room 101 where 2+2=5.

Not only is YouTube not a neutral platform, but YouTube and its parent Google are using YouTube to do the very thing with public discourse that Google is being prosecuted for with commercial transactions–using its monopoly position to crowd out competition.

This press release from Europe for Creators sums it up with this statement to YouTube: “You advocate freedom of expression but what we have seen is a media service dedicated to the promotion of its own views, based on false information and scare tactics.”

A cautionary tale for artist advocates around the world.

PRESS RELEASE

Brussels, 15 March 2019

Europe For Creators is asking YouTube for access to the same tools YT has used to promote its own messages on the EU’s copyright directive and article 13. The request is to allow Europe For Creators to message YouTubers and place banner ads on YouTube’s network, in the same way YT has done.

An open letter has been sent by Europe For Creators, a coalition of professional organisations of writers, musicians, producers, comedians, films makers coming from all over Europe and representing 12 million jobs across the European cultural and creative sectors. YouTube’s behaviour in using its own network and advertising has been the subject of much debate about the platform’s dominance.

Read the full letter below and on Article13.org.
An Open Letter to Susan Wojcicki, CEO of YouTube

Dear Ms Wojcicki,

After almost three years’ worth of in-depth examinations and negotiations involving the three EU Institutions, 28 Member States, 751 MEPs, and thousands of experts and stakeholders, the European Parliament is about to take a formal decision on the directive on Copyright in the Digital Single Market.

The aim of one of the main provisions of this directive – Article 13 – is to ensure that platforms such as YouTube fairly compensate the creators whose works are made available through their services. In other words, to play fair and respect the creators who made YouTube what it is today.

We believe that the Copyright Directive will create a level playing field for the European Digital Single Market, with fair and equal rules for all.

There is ample public debate around this directive and your right to defend your position, as a concerned party, is not in question. Indeed, the positions you have taken in the media or through your own videos against Article 13 are well known and nourish the public debate.

However, since the European Parliament voted overwhelmingly on Sept. 12 to approve its version of the Copyright Directive, YouTube has been actively using its own services to influence public opinion, often with misleading or false information.

You have taken advantage of your considerable influence over 1.8 billion monthly users as the biggest media entity in the world to:

  • Circulate your own message to video makers and YouTubers
  • Create a uniquely formatted page, similar to SaveYourInternet, on Youtube.com
  • Create a portal comprising all videos defending your position on Article 13
  • Run banners, pop-ups and push notifications on YouTube defending your point of view and directing traffic to your unique YouTube.com webpage

This is unprecedented and raises ethical questions.

Moreover, YouTube enabled the propagation of misinformation – such as the claims that Article 13 would lead to the shutting down of YouTube channels, kill European startups, put an end to memes and gifs and harm freedom of speech. In other words: change the Internet as we know it. Such scaremongering deliberately ignores the special protections provided in the text and misleads public opinion.

It interferes with the democratic and balanced debate that all European citizens are entitled to. We believe it is totally unfair and unacceptable that your service, which dominates the online market, is exclusively used as a media service to promote your own commercial interests in a debate over European legislation.

You advocate freedom of expression but what we have seen is a media service dedicated to the promotion of its own views, based on false information and scare tactics.

We believe in pluralism and open, democratic debate. We believe our views also need to be voiced to your audience. That is what freedom of speech is all about.

This is why we are asking you to let us, over the week of March 18-24:

  • send a message to the same YouTubers so we can share with them our vision of article 13 – the one we promote on our website, www.article13.org.
  • publish banner ads on YouTube as you did for the “saveyourinternet” campaign

Acting as a media service requires responsibility and accountability to ensure democratic debate.

Best regards,

EUROPE FOR CREATORS

About Europe For Creators:
A gathering of professional organisations of writers, musicians, producers, comedians, films makers coming from all over Europe…. We represent some 12 million jobs across the European cultural and creative sectors. We are people, not bots. And we are protesting against the false divide that has been put between citizens and us.

About IMPALA:
IMPALA – IMPALA is the European association of independent music companies. Its mission is to grow the independent music sector, return more value to artists, promote cultural diversity and entrepreneurship, improve political access and modernise perceptions of the music sector.

 

 

Facebook and the Enemy Within: T-Bone Burnett’s Keynote at SXSW 2019 — Artist Rights Watch

March 19, 2019 Comments off

 

As usual, Henry gives an extremely relevant and literate dissertation on the loss of humanity imposed on us by Big Brother’s youngest sibling, Mark Zuckerberg–the boy who wouldn’t grow up, but who instead created an app for Room 101.

Please listen to T Bone when you have a quiet hour to yourself.

 

Le Tatou’s Excellent Explainer on YouTube’s Role in Article 13 Lobbying–from @TatouProd

March 18, 2019 Comments off

“What no one tells you about Article 13”

As we’ve read in recent reporting from Europe, Google’s Susan Wojcicki has been twisting arms among their “YouTubers” to put out videos not only opposing Article 13, but also using the Google party line.

Now that’s starting to backfire because Ms Susan doesn’t really understand how this treating the artist like they’re stupid thing always does.  Think about it–can you imagine Lucian Grange telling Taylor Swift, “Yo, Tay Tay, I need some help on Universal’s latest antitrust review so you can help Universal look cool and make me a video that toes the corporate line?”

Ah, no.  That would never, never happen.  Not only would it never happen, it would probably backfire.

Enter Le Tatou, who are significant YouTube stars in French.  They produced a very thoughtful and articulate (face it–these guys are YouTube stars who actually know stuff, like how to actually research an issue and present it to the public–if you’re wondering why, try applying to a French university some time).

Their Article 13 explainer demonstrates how YouTube has tried to manipulate YouTubers and deceive the public.  The video is in French with English subtitles and you really should take the time to watch the whole thing.

It’s also really funny.

 

“Purchased Protest” Bombshell: Germany’s FAZ News Uncovers The Seamy Underbelly of Google’s Article 13 Lobbying

March 16, 2019 Comments off

 

 

The usual suspects got caught again.  And you can’t have the usual suspects without Keyser Söze.

 writing in the top German paper Frankfurter Allgemeine Zeitung has uncovered the financial link between YouTubers in the paid service of Google to “protest” in favor of the multinational monopolist’s interests in the European Copyright Directive (aka “Article 13”).

In his story filed today “Gekaufter Protest?” or “Purchased Protest?”, van Lijnden’s reporting has turned up what appears to be proof positive that Google’s interference lobbying has sunk to new depths of depravity (translation courtesy of Google Translate, courtesy of Google Books):

According to research by this newspaper, several German Youtubers have been offered money by an interest group that appears under the name “Create Refresh” to position themselves in videos against Article 13 of the copyright reform, which is particularly relevant for the video platform. “I am writing for financial support available to content creators who want to protest against Article 13. Be it a video, memes or graphics – we are open to suggestions, “says Mirko Drotschmann, who trades on Youtube as “mrwissen2go “and has about 900,000 subscribers.

Similar offers have been received by the Clixoom Science & Fiction channels (over 500,000 subscribers), Pietsmiet (more than 2.3 million subscribers) and Jana Riva (around 50,000 subscribers). The latter were promised €2,000 for a critical opinion on Article 13. All four emphasize the finding that they have not responded to the offer and have wondered very much about it, as such attempts to collect money would otherwise be almost non-existent and money would be offered only for the promotion of products.

Google’s interference lobbying should come as no surprise.  As MTP readers will recall, German Member of the European Parliament Helga Truepel was threatened with interference lobbying by Google’s lawyers during a trade mission to Silicon Valley:

helga google interfere

 

MTP readers will also recall the humiliating failure of the pro-Google lobbying effort to turn out any actual humans to protest in advance of prior votes.  I warned at the time not to underestimate Google’s ability to deliver protesters–one only need remember how the homes of Germans who opted out of Google Street View were mysteriously egged by “protesters” all in one night who also hung signs on their target homes stating “Google is Cool”.

The opposition to Article 13 is organizing a protest for March 23 and claims to have a number of cities in Europe targeted, mostly in Poland and Germany (two countries where Google has invested heavily in their academic missionary outposts for a decade or more).  The efforts may be aided by the general waive of protests about a host of social issues sweeping Europe, not to mention a large Brexit protest scheduled for March 23–coincidentally.  It may be possible to create the impression that one protest is about another topic altogether, particularly if the propagandist shows pictures of a protest in a wide shot that has no readable protest signs in frame.

Still, the logistics of getting protesters from one stronghold to a weaker outpost at a particular date and time was striking challenge given the geography.  Van Lijnden addresses how Google’s lobbyists rose to the challenge in the FAZ article:

[T]he protest is financially supported: Under the name of “EDRI” [the European Digital Rights lobby shop] numerous net political NGOs has offered…to bear the travel and hotel costs of people who want to lobby in personal talks with the deputies of the European Parliament. According to EDRI, a budget of €15,000 is available, two-thirds of which would be provided by the Open Society Foundation founded by George Soros and one third by the industry association “Copyright 4 Creativity”.  [MTP readers will have seen that bunch before back in 2015.]

The latter is also one of the supporters of “Create Refresh” and is led by Caroline De Cock, also managing director of the Brussels-based lobbying company “N-square”. Its clients include Google which as a parent company of Youtube would be hit hard by the reform. Such indirect lines from Silicon Valley to the aggravation and whipping of the protest can also be drawn elsewhere, such as the “Center for Democracy and Technology”, which is also listed as a supporter of “Create Refresh” and “Save your internet” and led by Nuala O’Connor, the former lawyer of Google subsidiary DoubleClick.

We wrote about the N-Square group back in 2015:

While Google itself is not a member of Copyright 4 Creativity, the organization is run by a long-time Brussels lobbyist whose firm represents Google, and even a cursory look at the Copyright 4 Creativity materials reveals some of the same rhetoric we have heard for years from the Google-funded anti-artist crowd.  This, of course, is how the astroturf game is played.

“Purchased Protest?” is extraordinarily brave reporting by FAZ given the level of hostility that Google has ginned up in Europe through its interference lobbying efforts rivaled only by Russian bot farmers and Cambridge Analytica–if not inspired by them.  Ahem.  Vlad would be proud.

Bots 14-2-19 Edited

This isn’t the first time that a major newspaper has caught Google and its YouTube subsidiary faking an Article 13 protest or stirring the contagion pot complete with bots and Russomania.  And of course David Lowery and Volker Rieck have done important work in exposing the rot.

Dj_qcYOW4AAfyRy.jpg-large

But it’s the first time that Google money has been linked to YouTube “creators” engaging in lobbying efforts to assist Google’s political goals, attacking Google’s political enemies and supporting Google’s political allies–all of which smacks of electioneering requiring compliance with Europe’s election transparency laws.

And of course there’s no one who knows more about where to find individuals likely to carry Google’s water, knowingly or unknowingly, than the one company in the world that knows what you’re thinking before you do.  Unbridled snooping by the pervy Google data scientists produces unimaginable benefits when that information is turned to political profit.

The first rate reporting in these bombshell revelations are all the more reason why the European law enforcement authorities need to open a criminal investigation into the whole mess.  As van Lijnden concludes:

[Big Tech’s attempt] to buy critical voices in the channel that is relevant to the debate highlights the manipulative methods that have fueled or even generated parts of the protest.

Can I get an “amen”?

Guest Post by Iain Baker of @jesusjonesband: An update on the PledgeMusic Debacle

March 15, 2019 Comments off

[We’re pleased to provide a platform for Iain Baker of Jesus Jones to update MTP readers on the slow motion train wreck called Pledge Music.  This has turned into a real financial crisis for artists and their vendors as well as the fans.]

We are still no nearer a resolution, it would seem. And it feels like they’re running down the clock. Artists are told to dial back any criticism of Pledge, in order to make it easier to sell the company. The inference here is that it’s our fault if this process doesn’t progress smoothly.

Well, the longer this all goes on, and the more urgent it becomes for artists to pay bills and replace money that PLEDGE took from them, the more I just feel like saying: Well, was it my fault that the company seems to have been basically insolvent in 2016? Was it my fault the company never told anyone about that?  Was it artists that oversaw a culture of financial mismanagement? Did artists offer huge wages for people to come in and try and turn Pledge into an “industry leader”?

I can’t help feeling we’re being kept in the dark, and fed horseshit. And we’re not the ones who caused any of the problems–the only thing we’re responsible for is helping the company thrive. Pledge has a beautiful set of offices in a prime central London location, and it feels like they’re sitting around a conference table, trying to save their careers, while the artists are stood outside in the rain with our noses pressed up against the windows, hoping they’ll help us out [with the artists’ own money].

None of these problems were caused by us, yet we’re the ones being made to wait, made to pay, made to struggle. If nothing else, this situation is profoundly unfair.

Pledge’s continued lack of transparency makes it even harder for the artistic community. We’re more than stakeholders in this – the company thrived on the backs of all the hard work that artists put in

And of course, it’s a slap in the face for all of the fans that engaged with the artists and provided the cold hard cash to make this thing fly.

Business is an equation – a system that should be in a state of balance. Pledge allowed this to spin out of control, and they forgot about the people that made it all work. That’s you, and it’s me.

Now, as they try to make it all work – shouldn’t they be trying to balance the equation? To ensure everyone feels like a valued part of the business? Well, hands up anyone who thinks that’s the case, right now.

 

 

 

 

 

 

 

 

 

 

 

 

A Cautionary Tale for Congress: Big Tech Uses Fake Grassroots Interference Lobbying In Europe

March 11, 2019 Comments off

There’s a sound policymaking reason why the European Parliament should ignore the bombardment of email and social media messaging it has recently endured for copyright reform.  That reason is well articulated in a 2010 memo by Professor Cass Sunstein (then Administrator of the White House Office of Information and Regulatory Affairs) when he cautioned the Obama Administration against relying on social media for making policy:

“Because, in general, the results of online rankings, ratings, and tagging (e.g., number of votes or top rank) are not statistically generalizable, they should not be used as the basis for policy or planning.”

In a post-Cambridge Analytica world where social media platforms not only are ubiquitous but also have earned the distrust of policy-makers and voters as well as parents, Sunstein’s nine-year old admonition is especially prescient-but he could have added “easy to fake.” This would apply to the new boiler rooms of fake Twitter accounts with distorted ratios of tweets to followers, or followed accounts to likes–such as the infamous Internet Research Agency.

Sunstein’s memo is both ominous and also relevant given developments at the European Parliament over the last few months.  Big Tech’s interference lobbyists are fighting the last war against safe harbor reform using “fake grassroots” online campaigns against Members instead of legitimate advocacy.

Specifically, the reaction of multinational Big Tech legacy players to the European Parliament’s safe harbor reform effort demonstrates a toxic brew of corporations attacking Members.   That’s a dark turn to Sunstein’s analysis.  Crucially, it appears that bot farming techniques and mass email attacks verging on denial of service are weapons in Big Tech’s interference lobbying arsenal despite their hollow assurances to multiple governments about policing interference by state actors in national elections.

Think it can’t happen here?  Think again.

Europe’s Safe Harbor Reform

Known formally as the “European Directive on Copyright in the Digital Single Market” or informally as “Article 13”, the EU legislation is intended to update the law and, among other things, substantially cuts back the legacy safe harbor privilege that is so valuable to Big Tech. (See Emmanuel Legrand’s excellent summary.)  It’s understandable that they would–Facebook, Google, Twitch and others have based their trillion-dollar market caps on what otherwise would be called piracy–also known as the “value gap”.

Congress has yet to grapple with the US version of the DMCA safe harbor (referring generally to Section 512 of the Copyright Act), although the Copyright Office is beginning field hearings on the much needed overhaul.  Originally conceived in 1998 as a way to afford a little latitude to reasonable people acting reasonably, Big Tech and its acolytes have distorted the DMCA “safe harbor” beyond recognition in the last twenty years and converted into an alibi.

In the last session, Congress took an important step by cutting back a different safe harbor in Section 230 of the Communications Decency Act with the SESTA-FOSTA package.  SESTA-FOSTA eliminated a safe harbor for sex trafficking which seems uncontroversial-but caused a huge lobbying counterattack by Big Tech.  If you caught any of the manipulated onslaught against SESTA-FOSTA, you have a taste of what the European Parliament is experiencing with their Copyright Directive.

There’s no question that Google and Facebook lobbyists interfered with the EU’s legislation–the companies threatened an MEP that they would interfere in the EU elections if they were challenged on Article 13:

German MEP Truepel gives a first hand confirmation of what happened.  Further, in an official blog post that has become controversial because it struck a little close to home, the European Commission commented conclusively on the MEPs’ experience with Big Tech’s “fake grassroots” campaign and interference lobbying tactics:

[T]here is ample evidence from respected sources, here and here and perhaps here or here or indeed here that ‘Big Technology’ has even ‘created’ grassroots campaigns against the Copyright Directive in order to make it look and sound as if the EU is acting against the ‘will of the people’….

Do Google, Facebook or others really need to pay to persuade?

Are we in a world where ordinary people side with the fire breathing dragon against the knight with a blue and yellow shield?

The Fake Interference Campaign

Yes, Google and Facebook attempted to pass off a blistering email spam campaign targeting Members as a spontaneous grassroots uprising.  Not just once, but three times on three separate votes in Parliament on the Copyright Directive-even after they had been caught faking and interfering by major news outlets.

The first “campaign” was around a committee vote that resulted in a win for Big Tech. Thanks to David Lowery and Volker Reick, the press called out the fakery in exposes by the Times of London and Frankfurter Allgemeine Zeitung among others.  Big Tech attempted to counter that expose by organizing in-person protests after making online threats of the “we’ll show you we’re real” variety across Europe.

Far from setting Europe ablaze, some estimate that these protests drew fewer than a total of 500 across Europe in multiple locations.  Pictures taken at these “protests” suggest that they were primarily organized by the Pirate Party, a fringe political party with one MEP that supports piracy and safe harbors as its name suggests.

Expose or no expose, the “fake grassroots” and spamming were repeated as the Copyright Directive went through successive procedural votes-which Big Tech lost miserably.  Yet the multinationals keep running the same interference play and kept getting sacked.

Members and the European Commission Speak Out Against Interference

Members were not fooled.  One example is an odd Tweetstorm against reform by suspicious accounts.  Members were subjected to attempts to stimulate the documented “emotional contagion” that drives social media.  A typical bot-like Twitter account against the Copyright Directive would have followers in low double digits or fewer but tens of thousands of tweets and a disproportionately high number of “likes” (in some cases over 100,000).  That ratio suggests that the account was used to capitalize on the Twitter “ratioing” algorithm to drive the corporate message into user timelines.  One wonders what did Twitter know and when did they know it?

In addition to the Tweetstorm, interference lobbyists ran a near-DDOS level email campaign that was actually counter-productive.  When asked at a press conference why the vote tally switched from opposing the Copyright Directive in the first committee vote to overwhelmingly supporting it in the next plenary vote, German MEP Helga Truepel pulled no punches:

“I think it’s due to this message spamming campaign. I talked to some of my colleagues here [and they] are totally [angry]…”

The European Commission’s official blog echoes Sunstein:

So next time, when you get a sponsored message on your timeline, which says something like ‘the EU will kill the world wide web as we know it’, stop, pause and consider for a moment. Ask yourself: Cui Bono? Who really benefits from this message or this wider negative campaign?

We know the answer to that question.  Google and Facebook became the biggest corporations in commercial history by manipulating legacy safe harbors in ways that neither Congress nor the EU intended.  Despite assurances about policing interference by bad actors on their networks, the European experience suggests they are actively using similar interference techniques to protect their privilege.

Europe has shown the world that legacy Big Tech business models can be brought into the 21st Century through well thought-out legislation.  But Congress would do well to arm itself against comparable “fake grassroots” interference campaigns in making policy for vital DMCA safe harbor reform to close the value gap.

[This post first appeared in the MusicTechPolicy newsletter, sign up for free version here.]

Guest Post by @Volker_Rieck: CLOUDFLARE: THE BAD, THE WORSE AND THE UGLY?

February 27, 2019 Comments off

You may have never heard of Cloudflare and you may be wondering what the company has to do with music, technology or policy.  Cloudflare plays a vital role in the worldwide criminal enterprise of piracy and competes with Google, Facebook and Amazon for the moniker of the Genco Olive Oil company of the Internet.  Here’s how the company describes itself:

Cloudflare, Inc. is a U.S. company that provides content delivery network services, DDoS mitigation, Internet security and distributed domain name server services. Cloudflare’s services sit between the visitor and the Cloudflare user’s hosting provider, acting as a reverse proxy for websites. Cloudflare’s headquarters are in San Francisco, California, with additional offices in London, Singapore, Champaign, Austin, Boston and Washington, D.C.

But Torrentfreak tells us:

As a CDN provider, Cloudflare relays traffic of millions of websites through its network, including many pirate sites.

Or said another way, Cloudflare is a lynchpin in the biggest income transfer in commercial history.  So what do you do when you’re Cloudflare?  How do you get some liquidity with that big income transfer?  How else–you find some sleaze bags to underwrite an IPO so they can shovel some money their way, too.

Cloudflare, a U.S. startup whose software makes websites load faster and with greater security, is preparing for an initial public offering (IPO) that could value it at more than $3.5 billion, people familiar with the matter said.

The company is looking to go public in the first half of next year, the sources said this week, joining a string of software and internet firms seeking to tap the stock market and capitalize on strong investor appetite and rich valuations.

The IPO will be led by investment bank Goldman Sachs, said the sources, who asked not to be named because the matter is confidential. Exact timing of the IPO has not been finalized, the sources added.

The astute researcher in Germany Volker Rieck has some insights into Cloudflare that the Securities and Exchange Commission would do well to review before they let Cloudflare make Mr. & Mrs. Main Street their partner in crime.

Read the post on Webschauder

In the US, a large technology company is about to go public. Cloudflare, a San Francisco-based company, wants to collect nearly $3.5 billion on the stock exchange in the first half of the year with the support of the investment bank Goldman Sachs. But there are dark shadows over Cloudflare. The spectrum of its customers ranges from credit card fraudsters and spammers, to sites that engage in copyright infringement as a business model, to terrorist sites. Even US embargos are undermined.

What is Cloudflare?
Cloudflare offers a content delivery network. In simple terms, it provides a kind of turbo drive for web pages, allowing them to be delivered world-wide quickly and securely. Cloudflare places itself between, on one hand, the web page and/or servers of its customers and, on the other, the site visitor and/or user of the service. By enabling it to selectively control and distribute site traffic, it can offer increased speed and protection against network overload attacks (DDoS).

However, Cloudflare also offers another feature: anonymizing its customers.
By placing a virtual screen over the original web page and/or their server, Cloudflare makes the operator practically untraceable. Upon inquiry, Cloudflare will only provide its own data, hiding client information such as hosting service and IP address, making it impossible to take legal action against illicit sites and services.
Civil law inquiries are futile, because Cloudflare only provides the naming of the hosting services, which is worthless without the respective IP address. This is roughly equivalent to seeking info on an unmarked apartment with just the address of a high-rise building housing thousands of residents.

The Cloudflare problem is well known
This anonymizing feature from Cloudflare attracts a number of unsavory customers including, again and again, copyright infringers. But it doesn’t stop there.

Since December 2018, the EU Commission has included Cloudflare on a watch list for counterfeiting and piracy.

Most recently, the service received the dubious prize as the worst enemy of the creative community from the US blog TheTrichordist.

The listing of infringing market participants has a long history in the US. The music association RIAA submits an annual list of the worst offenders to the US Trade Representative. In 2017, 9 out of 20 violators could not be identified by the RIAA because Cloudflare effectively camouflaged them. The US film association MPAA is also aware of the problems with Cloudflare obfuscation and names the company in its annual list of interferers.

In the relatively new piracy segment IPTV – the streaming of non-licensed TV signals – the company is also on the move. A study from Fall 2018 shows the role of Cloudflare both in camouflaging the sites that sell IPTV subscriptions and in concealing the origin of the streams.

In a survey of data centers comprising file and streaming hosts in 2016, 40% of the Top 10 and 47% of the Top 30 used Cloudflare.

The ECO, a German association, which obviously doesn’t care about anything
Cloudflare is a member of the German industry association ECO. The purpose of this membership is probably to get a discount for traffic at the Frankfurt (DE-CIX) internet node, which ECO operates through a subsidiary.

ECO has never seemed to care that providers who are very heavily involved in piracy, including Cloudflare, are members of the association. In any case, there was no reaction to corresponding reports that ECO members, including Cloudflare, are responsible for over 50% of piracy traffic in the film sector in 2014, with 45.2% of this activity accounted for by Cloudflare and around 6% by a further five members.

Screenshot: Extract from the ECO member list, February 2018, http://www.eco.de/ueber-eco/mitglieder/#C

 

Cloudflare in court
The reports of legal proceedings against Cloudflare are long and concern more than just virtual goods. For example, two manufacturers of bridal fashions filed suit for trademark and copyright infringements by plagiarizers who were made anonymous by Cloudflare. And, while a claim brought by adult entertainment provider ALS-Scan ultimately ended in settlement, the judge found that Cloudflare’s activities could significantly support copyright infringement by hosting cached copies of files (though the settlement precluded a final judgment on Cloudflare’s actions and liability).

Supporting Illegal Activity: Calculated or Coincidence?
In Fall 2018, Cloudflare made news by ending its business relationship with pirate hosts like Rapidvideo due to violating its terms of use. After all, before this, Cloudflare had only voluntarily terminated its business relationship with US Nazi site the Daily Stormer in 2017.

Screenshot Youtube Video with Cloudflare CEO Matthew Prince on Fox Business Network


Big Data brings it to light

The current Google Transparency Report offers a look at the actual extent of Cloudflare’s involvement in piracy.

In the report, Google lists all requests from rights holders for deletions from the Google search index that concern rights violations. Meanwhile these are more than 2.9 billion messages. The top 5,000 of still existing domains already account for 79% of all reported URLs.

In order to understand the significance of Cloudflare for this market, the 1,355 domains that are parked with companies such as Team Internet, Sedo or GoDaddy have to be subtracted from the 5,000 domains, since it makes no sense to protect parked sites with Cloudflare.
This leaves 3,645 domains. Of these 3,645 right-infringing sites, 41.9 % run via Cloudflare. For their part, they are responsible for 44.7 % of the copyright infringements reported to Google.

If one were to extrapolate this proportion to the total number of domains listed in the Google Report for copyright infringements, one would come up with almost 670,000 domains protected by Cloudflare – a significant portion of the 2.2 million domains with requests for delisting from Google’s search engine.

Among Cloudflare’s customers are: Torrentz.eu, Gosong.net, Share-online.biz, Catshare.net, Bitsnoop.com, Deepwarez.org, Turbobit.net, Myfreemp3.eu, and Nitroflare.com.
Each of these websites received at least 3 million deletion requests from the Google search index.

Not only pirates love Cloudflare – also credit card fraudsters, phishing sites, extortionists, and terrorists

The Watchwebsite Crimeflare is a real treasure trove of information about Cloudflare, listing 650 credit card fraud sides alone, to which Cloudflare offered shelter.

Cloudflare also proudly deals in SSL certificates, providing sites like Phishingseiten the manufactured consumer security and confidence-building necessary to be successful. According to the German magazine Heise, hundreds of such certificates for cheats were issued by Cloudflare.

Of course, as Spamhaus reports, the spreading of Malware often takes place over Cloudflare.

With Cloudflare, extortion is also par for the course, which conveniently generates additional services. By providing anonymity and untraceability to sites threatening, for example, to bring a web page to a standstill through DDoS, Cloudflare can then sell the attacked site its protection services. A truly special form of customer acquisition.

Cloudflare has also found good business in terror. As far back as 2012, the news agency Reuters confronted Cloudflare with the fact that it maintained the websites of Hamas and Al-Quds, designated by the US as terrorist groups.
And in 2018, terrorist organizations were still being supported, with Dutch security researcher Bert Hubert identifying at least 7 different terrorist organization websites that use Cloudflare.

The Huffingtonpost had these findings evaluated by Benjamin Wittes, Senior Fellow of the Brookings Institution:

„This is not a content-based issue. Cloudflare] can be as pure-free-speech people as they want – they have an arguable position that it’s not their job to decide what speech is worthy and what speech is not – but there is a law, a criminal statute, that says that you are not allowed to give services to designated foreign terrorist organizations. Full stop.“

As icing on the cake, the company even has customers who are on the official embargo list of the US (SDN-List). For example, CENTRAL REPUBLIC BANK from the Donetsk region uses Cloudflare’s services.

Screenshot: Collage of information from the US Treasury’s Office of Foreign Assets Control
https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx
Screenshot: Whois record of crb.dnr.ru at February 18th 2019

 

Do investors actually know what they are investing in?
Against the background of all these facts, two things are worth considering:
1) How has Cloudflare been able to obtain financing rounds from various investment companies in the past, including Google’s parent Alphabet?
2) Does Goldman Sachs actually know anything about the extent of its involvement in rights violations and its support of dubious „ventures,“ even to the point of undermining US embargoes?

Risk management is one of the central parameters of investment banks when evaluating investments. Risks must be known and assessable in advance. Cloudflare’s considerable participation in dubious transactions is rare in an IPO and a huge risk. Particularly if, as in the ALS-Scan case, the company is faced with its own liability, or if criminal law is violated through the service’s business with terrorist organizations.
Goldman Sachs and current investors either lack moral standards, are naïve, or consider the risk of failure to be very low, which only shows how urgently we need government regulation of intermediaries on the Internet.

Volker Rieck, Jörg Weinrich

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