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The First Rule of Lawfare: Is Google’s Active Measures Campaign on Article 13 a Trial Run for Election Meddling by a US Non-State Actor?

October 28, 2018 Comments off

Well, I wake up in the morning
Fold my hands and pray for rain.
I got a head full of ideas
That are drivin’ me insane.
It’s a shame the way she makes me scrub the floor.
I ain’t gonna work on Maggie’s farm no more.

From Maggie’s Farm, written by Bob Dylan

Google on the Back Foot with the Copyright Directive

Google and Facebook recently suffered a lobbying debacle in Europe over the European Copyright Directive.  That legislation cuts back the European version of the what Americans call the DMCA safe harbor.  A triumph for artists, Google’s European loss was the worst lobbying defeat that Silicon Valley has been handed in a long time—at least since the SESTA legislation cut back another safe harbor in the U.S.  So it shouldn’t be surprising that YouTube’s CEO is trying to influence YouTubers to lobby on behalf of Big Tech—Google desperately needs some human shields, which is exactly what participating YouTubers would be.  Once again scrubbing the floor for the House of Google.

At its core, the Copyright Directive cuts back the ability of services like YouTube to profit from infringing activities on their platforms.   One would expect corporations profiting from that safe harbor to lobby against it, just like supporters lobbied for it.  But Google and Facebook went well beyond simply lobbying by attempting to sow discord and undermine democratic institutions.  

And they got caught—red handed.   They were caught conducting active measures such as spamming, bot farming and overt messaging campaigns calculated to undermine the legislative process in the European Parliament.  You can read about it in a number of leading European publications starting with investigations by both the Times of London and Frankfurter Allgemeine Zeitung.

 

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Google’s Article 13 Lobbying Campaign from Volker Rieck

 

Most importantly Google supporters like the Pirate Party promised—or more accurately “threatened”—that “constituents” would show up to protest, and very few did.  So Google’s active measures campaign lacked a human face—the key component that brought it down.

German MEP Helga Truepel explained why the plenary vote on the Copyright Directive was so lopsided against Google at a press conference :  “…[It was] due to this message spamming campaign. I talked to some of my colleagues here [and they] are totally pissed off, cause in the streets there were a maximum 500-800 people last Sunday [at Pirate Party protests]… and we were only deleting emails for weeks now.”

Plan B and the First Rule of Lawfare

Fast forward to today: Google needs a Plan B.  Desperately.

Google’s problem today is the Members of the European Parliament (and some members of the UK Parliament) are wise to their jive after the plenary vote.  My bet is that story is not yet concluded as it merits a criminal investigation.  Because when a corporate covert influence operation is discovered and attribution is certain, it’s hard to put that genie back in the bottle (just like Internet piracy).

But while Google desperately needs a Plan B to retain its safe harbor, publicly acknowledging its influence operation is politically awkward, bread crumbs or no.  Like fight club, the first rule of lawfare is that it does not exist.

Google and Facebook are struggling to find that Plan B as the EU lawmaking process continues with the “Trilogue”, the next step to the Copyright Directive becoming national law in the European Union.  Google seeks another way to overwhelm the system by finding human shields to mingle with the bots.  And that’s where YouTube CEO Susan Wojcicki comes in with her recent appeal to YouTubers to protest the Directive.

Ms. Wojcicki may want us to overlook that Google just got caught running active measures against a democratic institution to meddle in the legislative process on another continent.  But members of the European Parliament have not forgotten.  She may be able to pull the wool over YouTuber’s eyes, but it just makes her human shields look even more duped and her methods look especially more alarming—if not terrifying—in a post-Cambridge Analytica world.

Safe Harbors, Addiction and Human Shields

Don’t underestimate how important these safe harbors are to Google, Facebook and its fellow monopolists.  They were ready to be on the wrong side of child sex trafficking legislation to preserve their other safe harbor (Section 230 of the “Communications Decency Act”)—that surely strained Sheryl Sandberg’s performance as Wendy to Mark Zuckerberg’s “boy who wouldn’t grow up.”  These safe harbors are crucial to Google, Facebook and Twitter—because it protects them as they snort up the addictive content and reward (if not sell) views, likes, follows, and “engagement.”  

Remember—YouTube is not in the music business, or even in the content business at the end of the day.  Google and Facebook are in the addiction business.  

In particular the behavioral addiction business (see Irresistible by Dr. Adam Alter).  If you’re in the addiction business, safe harbors are very, very important.  Just ask the narcotraficantes.  And don’t forget—the U.S. Attorney for Rhode Island investigated Google for violations of the Controlled Substances Act that resulted in a $500,000,000 fine and a non-prosecution agreement (not to mention a shareholder lawsuit).

Straight Outta Minitrue

But I suspect it is the embarrassing lack of human shields cited by MEP Helga Truepel that drove Ms. Wojcicki to issue a meandering tl;dr blog post trying to convince “YouTube creators” to fall in with the company line on the Copyright Directive. 

Ms. Wojcicki manages to get through her entire appeal without coming clean about the point of the Copyright Directive—YouTube profits from piracy through the safe harbor that the Directive would cut back, especially Article 13.  (There’s way more to the Directive than Article 13, but that’s another story.)

She would have YouTubers sign up to the “sky is falling” claims that “the unintended consequences of Article 13 will put [the highly profitable YouTube] ecosystem at risk”.  Why?  Because “[i]t would be too risky for platforms to host content from smaller original content creators, because the platforms would now be directly liable for that content.”  

That is quite a leap—how is it that “smaller” YouTubers would be such a big problem?  After all of YouTube’s “advertiser friendly” changes that severely hurt the earning power of many YouTubers, does Ms. Wojcicki really think that YouTubers—a pretty clever bunch on the whole it must be said—are so gullible that they will miss the irony?  

And then she says this: “We are committed to working with the industry to find a better way.  This language could be finalized by the end of the year [in the Trilogue], so it’s important to speak up now.”

Given the breadth of the coalition supporting the Copyright Directive and opposing Google and Facebook, it’s not immediately clear who is “the industry.”  I can tell you that if she includes the music industry in that reference, I can save her some time.  

Nobody in “the industry” trusts Google, YouTube, Facebook or Ms. Wojcicki.  [Although the beachhead that Google scored with the MMA may make life interesting for publishers and songwriters wishing to protest against the hand that feeds the mechanical licensing collective.]  

And, frankly, I’d be surprised if many YouTubers trust her either.  Based on the vote supporting the Copyright Directive, there’s a wide swath of MEPs that have severe misgivings about all these Silicon Valley companies trying to run roughshod over Europeans.  And then there’s the two and probably soon to be three competition prosecutions against Google by the European Commission.  That’s a thing.

Ms. Wojcicki hasn’t learned (and I predict won’t ever learn) a simple truth that every record company and music publisher knows—don’t jack with the talent.  YouTube jacks with the talent frequently, so it’s unclear how the talent is going to react to this latest request that they take time out of their day to help YouTube.

It’s not a good look and it will come back to bite.  YouTube has been profiting from the safe harbor for its entire existence and wouldn’t know how to make an honest buck if their lives depended.

Is Election Meddling Next on Google’s Agenda?

Before Ms. Wojcicki tries to rally YouTubers as human shields to support Google’s billions on her bot farm, she needs to get her own house in order.

And members of the European Parliament need to get a grip on these active measures campaigns before Google goes beyond “lobbying” on an issue vote and moves on to meddling in campaign outcomes in a few months when the European Parliament stands for election.

In a post-Cambridge Analytica world, we all know it’s a short step from undermining opposition on a particular issue to undermining the election of a particular candidate.  And Google is just as capable of meddling as any state actor if not more so.

Will Congress Bring Songwriters a Lump of Coal or Justice?

October 17, 2017 3 comments

It is axiomatic that as government expands, liberty contracts. Songwriters are among the most highly regulated workers in America, so on the continuum of liberty, guess where songwriters score? Most people are surprised by that unadulterated, and rather bleak, fact. After all, songwriters don’t make anything toxic or build in places they shouldn’t or dump chemicals in a waterway. Songwriters don’t have monopoly power. Songwriters don’t even get to set their own prices—the government largely does that in a very expensive and Kafka-esque process. They just write songs.

Not only are songwriters highly regulated workers and are forced by the government (or to use a term from political theory, “the Sovereign”) to bend a knee, the Sovereign has abdicated the enforcement of the laws protecting songwriters to the songwriters themselves except in rare criminal cases. Not only has the Sovereign failed to afford songwriters the same level of protection as the desert tortoise, the Sovereign actually requires songwriters to enforce the laws themselves. Sounds like a reality show.

So rather than getting even more government, songwriters are due for either getting the Sovereign out of their commercial lives, or if justice fails them yet again, at least getting the Sovereign to actually enforce the law.

Why is this important now? Because the Congress has conducted a “review” of the laws affecting songwriters and it’s possible that the Congress now is about to actually do something in the waning days of the current session of Congress. For songwriters, the holiday season is a good time to remember the most terrifying words in the English language: I’m from Washington and I’m here to help.

The Royalty that Time Forgot

The Sovereign compels songwriters to license their songs in two principal ways: The compulsory license for “mechanical” copies (Section 115 of the Copyright Act) and the rate courts (under a 1941 consent decree for ASCAP, the longest running consent decree in history, and a comparable one for BMI dating from 1964). The government set the mechanical royalty rate for the compulsory license at two cents per song per copy in 1909 and then forgot to raise it until 1976 when in its largesse, the Sovereign raised the rate to 2.75 cents per copy—inflation alone would have put the mechanical at 12 cents in 1976. That shadow of that injustice has dogged songwriters ever since and to this day.

Imagine for a moment if the Sovereign had set any other wage in 1909 and then forgotten to raise it for 67 years.

Today that same rate is 9.1 cents where it was set and forgotten in 2006—eleven years ago. So songwriters live in the shadow of that “minimum” statutory rate for which they never got relief from the Sovereign.

The Current Landscape

The main threats to songwriters from Washington come from one bill and the failed administration of two agencies: The Copyright Office and the Department of Justice. All these threats emanate from what is likely the largest lobbying cartel in history, the “MIC Coalition” an organization created for one purpose in my view: to crush songwriters once and for all. The MIC Coalition seems devoted to fixing prices for songwriters at zero or as close to zero as they can get them as far as I can tell.

The bill in Congress is the proposed Transparency in Music Licensing and Ownership Act (HR 3350) which is fully backed by the biggest of big businesses (MIC Coalition) to the detriment of the smallest of small businesses (songwriters). This legislation would impose yet another formality on songwriters by creating a massive database that would supersede the current copyright registration system for one purpose—denying songwriters the right to sue for statutory damages and attorneys fees in cases of copyright infringement. According to this legislation, if your song is not on the government’s list, then you can’t use the one big stick to drive compliance with the Sovereign’s own rules governing compulsory mechanical licenses.

Why is that? Because you are most likely to be suing a member of the MIC Coalition, or more precisely suing a member of one of the several trade association members of the MIC Coaltion—the DIgital Media Association (or “DiMA” in the logo above). The Digital Media Association is comprised of Amazon, YouTube, Apple and Spotify among others and has long been a stake in the side of the creative community. That’s right—one trade association member of the MIC Coalition represents three of the biggest corporations in the commercial history of the United States.

One alternative to statutory damages would be for the Department of Justice to assume a greater role in the enforcement of the copyright law. But the MIC Coalition has no intention of allowing that. No, no, no. The plan is to create a Gargantuan “gotcha” in order to take away statutory damages and attorneys fees as a right of any copyright owner to sue and replace it with….nothing.

Agency Failures

It is well to remember that the U.S. Copyright Office is a pre-New Deal legislative branch agency that has none of the civil or criminal enforcement powers we have come to associate with post-New Deal regulatory executive branch agencies. While the Copyright Office issues regulations, the Sovereign predominately leaves the enforcement of these rules to creators, publishers and labels to enforce at great expense. This is the one place that the Sovereign seems to want the market to work—the part where the Sovereign abdicates its primary purpose, that of protecting the people. Like I said, the desert tortoise fares better than the songwriter.

The Copyright Office does have power to affect the market by refusing or failing to act, however. For the last two years or so, the Copyright Office has permitted over 50 million and counting “address unknown” notices to be filed on compulsory song licenses using a backwater loophole of the Copyright Act. The loophole deems a song owner to be “unknown” if the owner’s contact information and song ownership is not available in the public records of the Copyright Office. This means that unless you have gone through the expensive and lengthy formality of registering with the Copyright Office for all your songs, you are “unknown”. If a cover recording of your song appears on a digital music service, then rather than track you down before using the song, the service can simply file—at great expense—an “address unknown” notice with the Copyright Office. This has resulted in approximately $5 million in filing fees to the Copyright Office to date according to an estimate from Paperchain.

And who is filing these notices and paying these fees? Google, Spotify, Amazon, iHeart, Pandora—all members of the MIC Coalition price fixing cartel. Think that’s a coincidence? Using this loophole, these corporate giants pay a zero royalty for their compulsory licenses. Hence, the cartel attempts to fix the price for songs at zero or as close to it as they can.

The Copyright Office permits these filings to occur and to my knowledge has raised no objection to it. They are unmovable on this point while they watch songwriters burn down. (I have a longer article on this “address unknown” issue here.)

The Department of Justice is currently engaged in a massive charade called “100% licensing”. This new and abrupt change in the way the DOJ interprets the ASCAP and BMI consent decrees was brought about under the auspices of a former outside lawyer for Google who was installed as a senior official in the antitrust division of the DOJ. What this interpretation means is that on co-written songs, the longstanding practice of each songwriter on a co-write administering their share of the song is thrown out the window. Instead, each songwriter is required to license 100% of the song, including their co-writer’s share. (Recall that Irving Azoff challenged Google by forming Global Music Rights and requiring a separate license for his writers who withdrew from the government-regulated PROs.)

The BMI rate court judge ruled against the DOJ—but the Sovereign is now appealing that ruling. The DOJ’s handling of the situation was so bad that songwriters actually sued the DOJ.

What is to be Done?

First—the DOJ should drop the appeal of the BMI rate court ruling against 100% licensing.  It’s a waste of time and creates substantial hostility among songwriters.

Second—the Copyright Office should stop accepting address unknown filings and refer the matter to the Congress to close the loophole. Digital services could also refuse to post recordings for which they have no publisher information, which is action most likely to produce unknown information from the market.

Most importantly—the Congress should not introduce yet another distortion in the market with some unicorn database that will never work.

As we approach the season of hope, it is well to echo what songwriters and publishers have told Congress for years: Songwriters need more liberty, not less.

@andreworlowski: Google had Obama’s ear on antitrust probe — Artist Rights Watch

August 21, 2016 1 comment

According to emails released under the US Freedom of Information Act, Google briefed the White House on an antitrust investigation into itself, breaking a 40-year precedent of the President’s office staying out of competition issues. It’s no smoking gun – just another small but valuable piece of evidence showing how close the ties are between Obama’s White House and the giant ad-slinger.

via @andreworlowski: Google had Obama’s ear on antitrust probe — Artist Rights Watch

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Obama Songwriter Czar Renata B. Hesse

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Google White House Fixer Doogie Howser R. David Edelman

ginny hunt

Google White House Fixer Ginny Hunt

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