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Google Sends in the Shills to Dodge Appearing at @SenRobPortman’s Hearing on Stopping Human Trafficking

September 14, 2017 Leave a comment

U.S. Sen. John Thune (R-S.D.), chairman of the Senate Committee on Commerce, Science, and Transportation, will convene a legislative hearing titled “S.1693, The Stop Enabling Sex Traffickers Act of 2017” (authored by Senator Rob Portman and Senator Richard Blumenthal).  The hearing will be at 10:30 a.m. on Tuesday, September 19, 2017–but Google and Facebook won’t be there.

Why?  According to the committee website:

S. 1693, sponsored by Sen. Rob Portman (R-Ohio) and 27 additional cosponsors, proposes amending Section 230 of the Communications Decency Act to create new legal liability for internet companies whose sites knowingly facilitate sex trafficking and other crimes through content hosted on their platforms. While it does not affect federal criminal liability, Section 230 of the Communications Decency Act was written to protect internet platforms from civil and state criminal liability for content created by others, including liability arising from the actions of others who post unlawful content or use the platform for unlawful behavior.

As MTP readers will recall, Google has a long history of supporting human trafficking sites like Backpage.com through Google surrogates like the Electronic Frontier Foundation and the Internet Association.  Sending surrogates works best when the people you are trying to deceive don’t figure out that you’re doing it.  Senator Portman isn’t fooled by shillery.  As reported in Politico:

Kevin Smith, communications director for Sen. Rob Portman , told MT that was less than ideal. “Senator Portman has made clear that companies that oppose this bipartisan bill should defend their position publicly and testify,” Smith said. “It’s disappointing that they chose to send up a trade association instead.”

Professor Goldman, a reliable defender of  Section 230, is also testifying.  Professor Goldman teaches at Santa Clara University–which received $500,000 from the controversial Google Buzz class action settlement.  I doubt that this payment had any direct affect on Professor Goldman’s views, however.  To his credit, he does not appear in the current version of the Google Academics, Inc. database, the definitive resource for Google-funded academics.

The incomparable Nicholas Kristof recently wrote an op-ed about Google’s sex trafficking problem in the New York Times:

Sex traffickers in America have the police and prosecutors pursuing them, but they do have one crucial (if secret) ally: Google.

Google’s motto has long been “Don’t be evil,” and I admire lots about the company. But organizations it funds have for years been quietly helping Backpage.com, the odious website where most American victims of human trafficking are sold, to battle lawsuits from children sold there for sex.

Now Google is using its enormous lobbying power in Washington to try to kill bipartisan legislation that would crack down on websites that promote sex trafficking.

It will be interesting to see if either the Internet Association or Professor Goldman tries to take the line adopted by Google lawyer Kent Walker (at the Google annual shareholder meeting) and try to get the Congress to believe that the Congress “was striking a blow for Good Samaritan review by Internet platforms” with CDA 230.  In other words, the Congress wanted to help Good Samaritans that are “quietly helping Backpage.com….to battle lawsuits from children sold there for sex.”

We shall see.  Live video will be on the Commerce Committee website.  You can call your Senator to express your views on the legislation at (202) 224-3121.

Bruce Houghton: Why Didn’t Google Shut Down YouTube-MP3 Sooner? — Artist Rights Watch

September 7, 2017 Leave a comment

By many measures, YouTube streamripping became the #1 source of music piracy, widening the riff between the music industry and the online giant. But the shuttering of #1 ripper YouTube-MP3 came only after legal action from some injured parties – the major record labels.

via Bruce Houghton: Why Didn’t Google Shut Down YouTube-MP3 Sooner? — Artist Rights Watch

Google and Amazon Leverage Copyright Loophole to Use Songs Without Paying Songwriters

October 15, 2016 4 comments

Two vastly wealthy multinational media companies are exploiting a copyright law loophole to sell the world’s music without paying royalties to the world’s songwriters on millions–millions–of songs. Why? Because Google and Amazon–purveyors of Big Data–claim they “can’t” find contact information for song owners in a Google search. So these two companies are exploiting songs without paying royalties by filing millions of notices with the Copyright Office at a huge cost in filing fees that only megacorporations can afford–an unprecedented land grab in nature, size and scope.

That’s right–Google and Amazon are falling over themselves to use their market power to stiff songwriters yet again. And as I will show, it is not just obscure songs that are affected. New releases, including one example from Sting, are also targets suggesting significant revenue loss to songwriters.  (I go into this in more detail on this series of posts.)

I happened to speak to a representative of one of the mass NOI filing companies after a recent panel in Los Angeles who assured me that the reason that his clients were filing these NOIs was not because they did not want to pay royalties but because they were so worried about liability from a “Jeff Price jihad” and that his clients fully intended to pay royalties retroactively once the song owner became known unlike the record companies who are “thieves”.   I believe that he believes that his client believes that they’re just trying to avoid being sued for not having the rights, but humor this unbeliever.  My bet would be that getting that retroactive payment will take the effort worthy of an act of Congress.

Perhaps literally.

If his new boss clients had a reputation for or history of treating creators fairly, I’d be far more inclined to bet on sunshine and puppy dog tails, but they don’t so I won’t.  The problem would be easy to solve–all they would need to do is issue a press release or even a blog post on the Google Public Policy blog stating that it is the official position of the company to pay retroactively.  Even if you accept his premise that record companies and music publishers are “thieves,” they never filed millions of NOIs.  In the meantime while we’re waiting for that post, I think we have to act as if it is not coming.

The U.S. Compulsory License

Songwriters are the most regulated workers in America. The government sets wage and price controls on most uses of songs and practically everything else about a songwriter’s business–except fulfilling government’s basic role of keeping them safe from piracy and multinational monopolists gaming the system. Congress needs to stop this latest scam.

The latest loophole that Google and Amazon are hacking is uniquely American–the compulsory license for songs. No other country has one. Most songwriters would prefer that the U.S. repeal this legacy anachronism from 1909 that keeps the government’s boot on their throats.

In order to get the government’s license, services only need notify the songwriter (or their publisher) that the service intends to use the song under the compulsory license. Of course, sending this notice of their intention to use the song (called an “NOI”) requires knowing who to send it to, and that is the “hack” that Google and Amazon are exploiting now. Others services surely will follow their market leadership if Congress fails to act.

The hack uses market power to manipulate a loophole in how those NOIs are sent. Common sense tells you that to send a notice, you must know who to send it to, even for a song. But does common sense also tell you that if you don’t know, the law should allow you to exploit the songs without compensation? Particularly if you’re the biggest purveyor of data in human history?

The legacy compulsory license allows services to exploit songs if they decide they can’t find the songwriter–and not pay royalties until the songwriter finds them.

That’s right–Google and Amazon trade on a loophole that allows them to serve NOIs on the U.S. Copyright Office if the song owner cannot be found in the public records of the Copyright Office regardless of what other information is readily available to these services, including their own. And once Google or Amazon serve that “address unknown” NOI, they don’t have to pay royalties and they cannot be sued for copyright infringement–so the millions in filing fees they will spend at the Copyright Office is a kind of insurance premium. This excerpt from the Copyright Act states the rule:

sec-115-noi-unknown
Why Can’t Google Search?

The “address unknown” NOI starts from this premise: Google is supposed to search for the song owner’s contact to send NOIs.

That’s right–Google is supposed to search. Think about that. This 1976 rule was never intended to apply to a music user with Google’s search monopoly. Yet, if Google “can’t” find the song owner after a search, then Google can serve an “address unknown” NOI to the Copyright Office and then exploit the song for free until the songwriter can be “identified” in the Copyright Office records–which may be never.

That registration by songwriters–while prudent–is costly and entirely voluntary. Forcing songwriters to register essentially turns the system into a version of YouTube’s “opt out” debacle, and probably violates international copyright treaties.

But the idea that Google can’t find someone is a remarkable thought. Gmail alone has over one billion users. Google knows everything about everyone and makes billions of dollars from reselling and manipulating that information. Not to mention the fact that Google bought the music licensing service Rightsflow–itself an NOI mill. Not to mention ten years of information Google has scraped from Content ID on YouTube or sheet music on Google Books.

Amazon also has a phenomenal amount of information about music ownership. As one of the biggest CD and DVD retailers, Amazon certainly has a head start in song research.

However–it appears that Google and Amazon are not using their own data for NOIs. Instead, they apparently are buying databases from the Library of Congress that tell them whether a song is registered for copyright or otherwise recorded in the digitized Copyright Office files (which songwriters are not obligated to do in order to get the benefits of the compulsory license). Those Library of Congress databases at best only cover copyrights after 1978 for technical reasons, so tens of thousands of jazz, blues and classical compositions created before 1978 are not included, as well as songs from outside the US before or after 1978.

LOC Prices Databases.png

Why buy this data when these giant corporations already have so much information at their fingertips? Because the point for the services is not to find out who actually owns the songs, the point is to find out if the Copyright Office has a record of who owns the songs based on the Library of Congress data.

That is the hack.

Kafka-esque Moral Hazard

In other words–the government allows Google to claim they can’t find the songwriter even if Google’s own data would reveal their identity just because the song owner isn’t included in the Library of Congress database at the time Google searches. And there’s the “gotcha”.

Kafka’s next book is in there somewhere.

Offering all the world’s music all at once presents a licensing problem that no system will be able to solve due to the sheer numerosity and disaggregation of the creative process. How many songs will be written by the time you finish reading this post and how would you find out who wrote them?

So it should not be surprising that the market has offered a few ways to solve for this problem: Direct licenses (bypassing the NOI altogether) and NOI clearance companies that specialize in maintaining song owner information to send out mass mailings of NOIs (sometimes called “carpet bombing NOIs”).

These are two significant methods available to Google and Amazon and my guess is that these monoliths employ both methods for their interactive streaming services (the kind of service that competes with Apple and Spotify).

What’s the Alternative?

If Google and Amazon cannot find the song owner under their direct licenses or through an NOI company, how can they find the song owner? The easy answer is don’t use the song. But that approach is counter to offering all the world’s music at scale by creating supply that is not responsive to demand.

Deciding which songs are right for “address unknown” NOIs requires some Silicon Valley style hocus pocus. Remember–it’s not that Google can’t find the song owner. The loophole requires that they can’t find the copyright owner in the pubic records of the Copyright Office, even if Google has actual knowledge of their whereabouts.

Then you have to believe that Google knows where to get the information for which direct licenses they want, they know how to carpet bomb NOIs, they have a decade of information in Content ID, but when it comes to some songs, Google has to turn to the Library of Congress? And Google’s only choice is to serve “address unknown” NOIs on the Copyright Office?

Once served, the Copyright Office posts these mass filings on their website in large Excel files so that songwriters can sift through the haystack to find their needles. This hit and miss and self-serving process is fraught with moral hazard and should not be the law in 2016.

This is what the filing looks like–but realize that “1 NOI” means “1 NOI With An Excel file with over 40,000 songs on it”.

co-nois-1

Sting Songs Give Some Examples

A spot check of a couple of Google’s filings reveals that Google is not getting it right. Let’s use three Sting songs for an example.

Sting’s recent release “50,000” (coincidentally a tribute to David Bowie and Prince) is on Google’s “address unknown” NOI list. That song is probably subject to a direct license, but the song copyright registration may not yet have been processed. There’s almost always a delay in processing copyright registrations, so new releases will rarely appear in the Library of Congress database day and date with the song’s release. Google will not be paying royalties on Sting’s song, but will be exploiting it.

That’s right–a song that is a tribute to an artist rights advocate like Prince is itself being ripped off.

50000-noi

Google has also filed an “address unknown” NOI for a song entitled “Fragile (Live)”. My bet is that “Fragile (Live)” is “Fragile”, the well known hit song and anthem of the environmental movement.

sting-fragile-google-noi
This likely means that someone at Google seems to think–or wants to think–that “Fragile (Live)” is a different song than “Fragile”, probably because there is a sound recording registered for “Fragile (Live)” in the sound recording metadata but no song registered by that name in the Library of Congress database. And why would there be if it is the same song? We humans have a way to catch this kind of mistake.

It’s called listening.

This pattern repeats with “Brand New Day (Cornelius Mix)”, also included on Google’s “address unknown” NOI. Again, a version of the sound recording, not the song. The song remains the same.

sting-brand-new-day-mix

It is highly likely that the songs “Fragile” and “Brand New Day” were registered with the Copyright Office long ago. That’s probably why the “Live” and remixed versions of the sound recordings show up in Google’s NOI filing for the songs and the original versions do not.

In this case, not only are these songs likely covered under a direct license with Sting’s publisher, but even if they are not, the song owner’s information is identified in the public records of the Copyright Office. The loophole does not apply, but Google takes it anyway and the cost of checking up on a multinational media company falls on the songwriter.

And given that it’s Google, the songwriter will probably have to sue them to a final non-appealable judgment in order to fix the mistake that should never have been allowed to happen in the first place.

The Congress Must Act

The government’s compulsory license has become distorted by rent-seeking behavior by multinational media corporations. It should be stopped or substantially modified. If Google is allowed to use this loophole to profit at the expense of songwriters from its considerable influence peddling and litigiousness, that will be crony capitalism writ large.

Despite the assurances of the mass NOI filing agent, my view is that until I see it in writing, I have to assume that Google and Amazon took this route because it not only offered an opportunity to react to Jeff Price or David Lowery who have the temerity to speak up on behalf of song owners, it had the added bonus of actually stiffing songwriters. The reason I think that is so is because that’s what they chose to do rather than taking the obvious alternative–just not using someone’s property if you decide you can’t find the owner.

Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

September 29, 2016 Comments off

Google, Amazon and MRI are reportedly filing “millions” of NOIs with the Copyright Office after buying data out the back door of the Library of Congress–all to avoid paying statutory royalties.  This takes “carpet bombing NOIs” to a whole new level of hurt for songwriters, and forces the Copyright Office to be complicit in the wholesale rip off.

via Big Tech’s Latest Artist Relations Debacle: Mass Filings of NOIs to Avoid Paying Statutory Royalties (Part 1) — Music Tech Solutions

@amassembly Astroturf “Study” a Case Study for How Google Launders Money

April 7, 2016 Comments off

If you read the Notice and Takedown in Everyday Practice “study” that was at the center of the controversy over the attack on the Copyright Office comment page on regulations.gov, you’ll greatly appreciate the irony in this clear and concise acknowledgement (at p. iv) of exactly how Google launders money through real or created nonprofits to produce “studies” that appear to be academic and objective.  You know…astroturf:

This work would not have been possible without both data and funding resources for the coding effort. We thank Adam Holland [of the Google-funded Berkman Center] and [former lawyer for Google-funded EFF] Wendy Seltzer of [Google-funded] Lumen (formerly Chilling Effects) for facilitating access to the Lumen data, which [is 99.4% Google data] forms the basis for our quantitative work. We are grateful for funding support from Google Inc. as a gift to The American Assembly and from the Sloan Foundation for its support through the Berkeley Law Digital Library Copyright Project.

If you have any questions about the extent of Google’s influence, I highly recommend the excellent Public Citizen report (which is not astroturf) “Mission Creep-y: Google is Quietly Becoming One of the Nation’s Most Power Political Forces While Expanding Its Information Collection Empire.”

We expect that Google will run its money through the EFF, the various Samuelson-Glushko forward operating bases around the world, but it is a surprise that the venerable American Assembly (founded by President Eisenhower–Mr. Military Industrial Complex himself) would allow itself to be manipulated by corporate interests to such a degree.

Unfortunately for the American Assembly, they are the perfect target for astroturfing by defense contractors like Google.  It sure looks like somebody or maybe several somebodies decided to shill for Google.  Easy explanation?  When Google was asked to buy “the American Assembly,” somebody must have thought they meant the Congress of the United States political science education being what it is with STEM workers in Silicon Valley.

Maybe they’ll rename Boston Dynamics something suitably semiotically Goo-Goo-Googlely like “Porridge”.

google-android-3-gingerbread

 

Power Transition, Lawfare and the Spotify/Google Interlocking Directorate

July 30, 2015 1 comment

Though this be madness, yet there is method in it.

Hamlet, by William Shakespeare

Power Transition in Business

When a relatively unequal competitor is about to overtake a dominant competitor, lawfare is most likely to break out when the less dominant competitor perceives their opportunity to replace that hegemon.  At this point in the power relationship, the less dominant competitor may seek interlocking relationships with other less dominant competitors in the relevant market in order to attack the hegemon by reducing competition with each other and coordinating lawfare operations against the hegemon.

These interlocking boards or corporate relationships may work well when there is something in it for the allied less dominant competitors that helps each of them in ways that do not harm each of them.  For example, in an alliance of two less dominant competitors G and S against hegemon A, this will be particularly true if company G has discrete  goals with hegemon A that only tangentially affect company S.  If lawfare against hegemon A would greatly benefit company G and would not harm company S, S may find an alliance with G for lawfare against A to be beneficial.

This may be particularly true if A is competing directly with S in a related market and (with apologies to Professor Kugler) at a moment when A is temporarily weaker than S, but S perceives A as about to overtake S.  In other words, lawfare is not most likely to break out when A in fact overtakes S, but rather at the moment when S perceives A as about to overtake S.  It is at that moment that an interlocking alliance with G may be most desirable to S so that the two companies can bring their collective power to bear on A by making lawfare on A.  (This is a version of the “power transition” theory of international relations.)

In the world of corporate realpolitik, such alliances may form well in advance of an anticipated move by A that threatens both S and G.

Spotify’s Dominant Market Position

On May 12, 2014, Spotify’s director of economics Will Page gave a presentation at the Music Biz Conference in Nashville (hosted by the Google-dominated Music Business Association, formerly known as NARM in a soon to be forgotten day).  As reported by Billboard, Will Page gave the audience a good deal of evidence of Spotify’s domination of the online music market:

Spotify claims to have represented one out of every ten dollars record labels earned in the first quarter….Page’s claim shows the speed at which subscription services are gaining share of the U.S. market. According to IFPI data, all subscription services accounted for 10.2 percent of U.S. recorded music revenue in 2014. If Spotify had a 10-percent share in the first quarter, it’s safe to say the overall subscription share is well above the 10.2 percent registered last year.

These numbers suggest that while Spotify may have a significant share of overall U.S. recorded music revenue, Spotify is clearly dominant in the global subscription market with its now 20 million subscribers and probably is dominant in the U.S. music subscription market.

Yet it is Spotify’s failure to convert users of the Spotify ad supported service (with ads served by Google) to the Spotify subscription service that is at the heart of objections to continuing to license the ad supported service.  Not to mention the bait and switch aspect.

The Return of the Interlocking Board

While Spotify may have enjoyed global domination in music subscriptions, it did so with an eye over the shoulder at the much anticipated and inevitable launch of the a subscription service by Apple, which also happens to be Google’s main competition in the smartphone market.  Not surprisingly, we saw this July 21, 2014 story in Re/Code by the highly credible tech journalist Kara Swisher a few weeks after Page’s presentation:

Omid Kordestani, who has just temporarily replaced Nikesh Arora as chief business officer of Google, is joining the board of Spotify, according to people with knowledge of the situation.

In addition, sources said, one of the search giant’s former execs, Shishir Mehrotra, will become a special adviser to CEO Daniel Ek and the company’s management.

The move is a fascinating one, especially since sources inside Google said that new YouTube head Susan Wojcicki has expressed interest in acquiring the popular online music service if it were for sale. It is not currently and there are no such discussions going on between the pair about such a transaction.

Thus, the new appointments appear unrelated. And, to be clear, Google’s top execs often join boards of companies, both with corporate ties to them and not.

In any case, Google is still planning on launching a long-delayed YouTube subscription music service this year that would compete with Spotify. If it actually does get going, it will be the second such offering from the company.

That YouTube subscription service is now even longer delayed.  In fact, I’m beginning to wonder if it will launch at all.

Ms. Swisher revisited that July 21 story on July 22 to clarify the reference to Google’s potential purchase of Spotify–only.   She wrote:

…Spotify co-founder and CEO Daniel Ek has indeed met with Google execs about various and substantive commercial deals at YouTube, Google Play and Android.

“There has not been a single conversation about Google’s interest between the two,” said one source, reflecting many others. “There was never a price, never a negotiation, never anything.”

Ms. Swisher followed up that July 21 story with a post on September 11, 2014:

As Re/code previously reported it would do, Spotify has officially added Google’s business head, Omid Kordenstani, to its board.

And thus the interlocking alliance was formed.

Google’s Shady History With Apple

Recall for a moment that the Federal Trade Commission pressured Google Executive Chairman (and then-CEO) Eric Schmidt to resign from the Apple board of directors.  This after Google launched a series of products that directly compete with Apple and is so coincidental as to call into question whether Schmidt violated his fiduciary duty as an Apple director (Droid, Google Tablet, AdMob, Google TV, and what was then called Google Music).

So what about that resignation?  According to Engadget, Steve Jobs said:

“Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest.”

According to Reuters, on July 9, 2009 the Federal Trade Commission announced that it would continue investigating Schmidt:

The U.S. Federal Trade Commission said it will continue to investigate the relationship between the boards of Apple Inc and Google Inc, after Google’s chief quit Apple’s board on Monday.

Richard Feinstein, director of the FTC’s bureau of competition, commended both companies for recognizing that sharing directors raises competitive issues, in light of the resignation of Google Chief Executive Eric Schmidt from Apple’s board.

Feinstein said regulators have been investigating the Google-Apple tie for “some time,” even as the two companies increasingly compete with each other in markets such as smartphones and operating systems.

“We will continue to investigate remaining interlocking directorates between the companies [for violations of the Clayton Act],” Feinstein said.

Well, that 2009 investigation seems to have trailed off and gone nowhere.  2009, 2009, what else happened in 2009?

It can safely be said that Google’s war on Apple is long standing and there is no love lost there.  It should not come as a surprise that Spotify would view Google as a valuable ally in its own competition with Apple.  Not only was Spotify’s dominant position in the music subscription market directly threatened by the launch of Apple Music, but Apple’s gifted executive Eddie Cue delivered further humiliation to Daniel Ek involving Ek’s bête noire, Taylor Swift.

Artist relations problems need to be solved quickly and generously (and frankly if an issue get to become an artist relations problem, it’s your own damn fault).  Mr. Cue quickly solved an artist relations problem around Apple’s proposed 90 day royalty free launch by his deft handling of criticism from Taylor. Mr. Cue’s successful handling of Taylor’s criticism solved his company’s artist relations problem.  Whether Mr. Ek knows it or not, this was a further humiliation to him after Spotify’s brand damage from his widely-reported collision with the Taylor juggernaut.

The Washington Hackathon Continues Apace

In September 2014, Spotify announced a hire that was largely overlooked at the time.  Taking “hackathon” to a whole new level, Spotify announced that it had hired Washington lobbyist and Clintonista Jonathan M. Prince as its corporate communications revolving doorman.

Jonathan M. Prince Revolving Door Profile from OpenSecrets.org

Now why do you suppose this person was brought on?

Compounding the urge to merge was the announced policy change at Sony and Universal demonstrating an increasingly skeptical view of the ad supported services like Spotify and YouTube, also broken by Re/Code in a March 8, 2015 interview by the outstanding journalist Dawn Chmielewski (who has written extensively on the music business for many years) with Universal’s Lucian Grainge.  This was followed shortly by a statement from Sony’s Doug Morris indicating dissatisfaction with the free content model that is at the heart of Spotify and Google’s business (“In general, free is death.”)

I seriously doubt that these relatively simultaneous statements by Lucian and Doug came as a total surprise to either Spotify or Google, but the public nature of the statements combined with personnel changes probably put a fine edge on reality for Spotify and Google.  Lawfare was now in order.

Not only did Spotify and Google have interlocking interests in preserving the ad supported model, but each brought complimentary skill sets to the lawfare ready room.  Spotify is able to play the role of plucky startup victimized by the big bad Apple and the smaller but badder major labels that are conspiring to take free music away from consumers.  Google is able to hang out in the shadows and bring its investment in Washington, DC agency capture and vast experience being on the wrong end of antitrust investigations around the world.  And in particular, Google’s stunning influence over the U.S. government through the Obama Administration including the Federal Trade Commission.

Just a quick reminder of Google’s dominance of the U.S. government:

President’s Council of Advisors on Science and Technology and Obama Campaign Volunteer: Eric Schmidt (call sign “Uncle Sugar”)

Google Lobbyist: Katherine Oyama (former Associate Counsel to Vice President Joseph Biden)

Counselor to the Chairman, Federal Communications Commission: Gigi Sohn, formerly CEO of Google Shill Lister Public Knowledge.

Special Assistant to Chairman, Federal Communications Commission: Sagar Doshi (Google Product Specialist)

Chief Digital Officer, Office of Management and Budget and Featured Revolver at OpenSecrets.org‘s Revolving Door Site: Jason Goldman, formerly Product Manager at Google.

Director of Google Ideas (and co-author with Uncle Sugar of The New Digital Age): Jared Cohen (formerly a member of the Secretary of State’s Policy Planning Staff and as an advisor to Condoleezza Rice and later Hillary Clinton).

Director of United States Patent and Trademark Office: Michelle Lee (formerly Google’s Head of Patents and Patent Strategy)

U.S. Chief Technology Officer: Megan Smith (formerly at Google[x])

Deputy U.S. Chief Technology Officer: Alexander Macgillivray (formerly Google’s point man on orphan works)

Director of Google Advanced Technology and Projects Group: Regina Dugan (former director of DARPA)

Director of U.S. Digital Service aka savior of Healthcare.gov (in case you couldn’t tell): Mikey Dickerson (former Site Reliability Manager at Google)

YouTube Global Communications and Public Affairs Manager:  Chelsea Maugham (former U.S. State Dept. Chief of Staff)

Google Head of Global Development Initiatives: Sonal Shah (Advisory Board Member, Obama-Biden Transition Project)

Deputy U.S. Chief Technology Officer (White House): Nicole Wong (former Google Vice President & Deputy General Counsel)

And then there are dozens if not hundreds of former Hill staffers now working for Google’s DC shillery.

Not to mention FTC Commissioners Joshua Wright and Edith Ramirez, Julie Brill and Maureen K. Ohlhausen.

Timing is Everything

In yet another case of curious timing involving a Google relationship, the day that Apple Music launched the New York Attorney General announced an investigation into whether Universal–remember, the same Universal that had announced it was going to take a relook at its ad supported deals of the kind it had with Spotify and YouTube–and Apple Music had somehow colluded to undermine Spotify and YouTube.  As NPR’s Laura Sydell reported:

The investigation centers on whether Apple may have urged [Sony and Universal] to drop support for free, ad-supported streaming services such as Spotify and Google’s YouTube. Such a move could be seen as anti-competitive.

That investigation was later dropped by the New York AG (who also signed the amicus brief supporting Mississippi Attorney General Jim Hood against Google).  Why was it dropped?  Well, possibly because there are solid commercial reasons for deciding that the experiment with ad supported music was a disaster?  Possibly because it became apparent that Spotify’s story about converting free users to subscribers was not borne out by the…you know…results?

How do you suppose that this investigation got started?  Just a coincidence?

I think not.

Guess what also happened right around the same time?

Spotify Lobbying According to OpenSecrets.org

Spotify Lobbying According to OpenSecrets.org

Yes, those Washington lobbyists don’t have to use a scientific calculator to add up what Spotify pays them!

The NY complaint was a skirmish before the main attack.  And here’s where the real lawfare gets interesting.  Remember, Google has been fighting Apple for years and Eric Schmidt left the Apple board under a cloud (no pun intended).  Independently of Spotify, I think it’s pretty safe to say that if Google could find a way to jack with Apple they would jump on it.

Also remember that Google has been bashing apps for quite a while and it takes no great genius to suspect that the reason is because they can’t stalk you inside of apps very easily.  So if Google could find a way to attack Apple’s apps, don’t you think they’d jump on it?

And what better way for Google to attack Apple than to go after Apple’s pricing model in the App Store?  (Apple takes 30% of “digital consumables” sold by developers through the App Store, including most subscriptions.)

Of course if Google itself went after Apple’s App Store pricing that might be a little transparent, so that won’t do.  What to do, oh what to do?

Things That Go Bump in the Night

According to the Radio and Internet Newsletter’s July 9, 2015 reporting:

Spotify has sent an email to Apple iOS subscribers, suggesting they cancel their Spotify Premium accounts, if those subscriptions were purchased through the Spotify app, and re-subscribe on Spotify’s website.

The reason for this surprisingly suggested workaround is to save money. A Spotify Premium plan costs $13 when purchased through iTunes, and $10 when bought directly from Spotify. “The normal Premium price is only $9.99, but Apple charges 30 percent on all payments made through iTunes,” Spotify said in the subscriber email acquired by Engadget.

Here’s part of the email:

Spotify Attachment-1.0

As RAIN confirmed, Apple has nothing to do with setting the price for in-app purchases.  That decision lies with the developer exclusively.  The developer–Spotify in this case–knows going in what the cost will be.  Spotify knew that when it first put the Spotify app in the App Store years ago.

But RAIN notes the curious timing of Spotify’s misleading advertising campaign:

The timing of Spotify’s communication, soon after Apple’s launch of a competing on-demand music service, cannot be ignored. It must be particularly galling to Spotify that Apple is potentially luring users to its own service, and taking a portion of Spotify subscription payments. The risk of Spotify’s communication strategy is that subscribers will cancel their Spotify/iTunes subscriptions, as Spotify recommends, and sign up for Apple Music’s three-month trial. The advice here, for what it’s worth, is for Spotify to drop the in-app subscription price to $10, eat the loss, hand the saving to subscribers, and retain its users. Complaining isn’t aggressive business. Pricing is.

There is, of course, a long way from “galling” to “illegal.”  And that’s what lawfare is all about.  So it should come as no surprise that the Federal Trade Commission is now investigating Apple for deceptive trade practices.

The Washington Post reporting on the investigation contains a helpful quote from an employee of Google shill-lister Public Knowledge (so you know it must be important to Google):

What is so tough for regulators here — other than that they are using relatively arcane laws that probably never anticipated the innovation now going on in the tech sector — is that the streaming companies really do have a lot of ways to reach consumers. They can sell it over the Internet. And they all offer apps on Google’s store, which actually serves more customers around the world than Apple does.

So is Apple’s behavior truly anti-competitive?

“The fundamental question is if it is big enough to wield enough market power that can harm the competitive process,” said Gene Kimmelman, president of media public interest group Public Knowledge. “Music distributors would need to show that they truly need to be in the iTunes ecosystem to demonstrate a legitimate competitive concern.”

Actually–the fundamental question is whether Google is manipulating the Federal Trade Commission to conduct lawfare against Apple to preserve the shite artist royalties from ad supported services like YouTube and its interlocking relationship partner Spotify.  This is not just a Nixonian fantasy.

You Won’t Have Johanna Shelton to Kick Around Anymore

After the Wall Street Journal’s release of internal FTC staff memoranda recommending that Google be prosecuted for antitrust violations (a prosecution that was squashed by political appointee FTC commissioners) Google lobbyists were caught instructing FTC commissioners to be be publicly supportive of Google according to Buzzfeed:

Johanna Shelton, a senior lobbyist at Google, emailed an official at the Federal Trade Commission with a pointed request: release a public statement that would help the search giant deal with a negative story. Two days later, the agency did just that….Google was “deeply troubled” and “puzzled” by the agency’s silence on the matter, Shelton said in the email, which emerged in response to a public records request and was obtained by BuzzFeed News. She said the inadvertently released document was being used by Google’s rivals to “sow confusion and undermine the FTC’s conclusions, especially in Europe.”

“We believe it is critical for the FTC to defend its reputation, showing that it followed a thorough process and fully took into account the Bureau of Competition staff memo, among other internal agency opinions including the Bureau of Economics,” Shelton said in the email. “A public statement standing by the FTC’s ability to make a final decision after assessing differing internal views would go far in the international space to restore the reputation of the FTC, especially on due process.”

Two days after the email was sent, and after the Wall Street Journal published another article about Google’s relationship with Washington, the FTC released a statement that provided the context Shelton had sought.

In other words, Google lobbyists said jump and the FTC’s political appointees merely asked how high.

Is Google pulling rank to get the FTC to investigate Apple on a pricing policy that has been in place for years?  Is Google using its interlocking board seat with Spotify to use Spotify’s competition with Apple in the music subscription market to get the FTC to attack Apple in a way that also benefits Google in the smartphone market?

Of course now that Spotify has Jonathan Prince on board, the company may be able to use Prince’s easy access to senior White House staff to sick the FTC on Apple all by themselves.  But either way, the motives are oddly aligned.

However–Digital Music News tells us that Apple Music to date has had no effect on Apple App Store downloads of the Spotify, Pandora or YouTube iOS apps.  I wonder what the FTC thinks of that stat?

Let’s remember that Spotify is a music service.  It’s not in as many business lines as Google.  The only reason why Spotify is able to spend hundreds of thousands on lobbying (probably soon to be millions at this run rate) is because they get cheap deals on music.  Those deals have an end point.

The most meaningful statistic of all, though, is the number of subscribers to Apple Music.  Apple reached 10 million subscribers in about 45 days.  Spotify reached 20 million subscribers in seven years.  If Apple Music continues on anything like this run rate, it is going to be very difficult for company S to overtake hegemon A.  Apple Music provides market confirmation that free music is not necessary to get users to subscribe to a music service.

And that is not good for company G or company S.  Not to mention that lawfare can backfire.  What they have to worry about is that in their effort to stop Apple by manipulating the FTC, Google and Spotify will have demonstrated that something is really rotten in Washington, DC.  And Mountain View.  Not to mention Sweden.

The MMF’s Google Problem

July 5, 2015 Comments off

David Lowery’s recent post on the Trichordist reveals the disclosure by an apparent whistleblower that the Music Managers Forum and to some extent the Feature Artist Coalition have each been taking undisclosed money from Google and Spotify.  (Given the context, I assume the whistleblower is referring to the MMF chapter in the UK.)  Why is this important?  Because when confronted with the artist rights grass roots movement that Lowery personifies, we can expect Google to do what they always do–try to co-opt it one way or another.

Want evidence?  If you’ve had a look at the Public Citizen report “Mission Creep-y“, Google’s technique of buying their way into issues or industries and increasing their dominance in their ownership and influence through control of resources should come as no surprise.  The venerable good government group provides extensive documentation of Google’s massive investment in indirect lobbying through funding a host of academic institutions (who can forget the millions Google paid for Lawrence Lessig’s enterprises at Stanford), organizations like Creative Commons, the Electronic Frontier Foundation, Public Knowledge, the Center for Democracy and Technology, and a host of others.

Creative Commons 2008 Schedule B

What’s the Spotify connection?  The distinction between Google and Spotify is more blurred after Spotify let Google onto their board of directors last year.  I find it hard to believe that Google got a Spotify board seat without a Google investment in Spotify which would be typical of how you get a seat on private company boards of directors most of the time.

In addition to any ownership stake that Google may have, what unites Spotify and Google is advertising supported, i.e., “free”, music.  For which Google sells the ads, of course.  Or as they might say, “content,” which has implications for everyone from visual artists, to movie makers, to journalists, to artists and songwriters.

As Spotify’s billionaire investor Sean Parker told CNN’s Poppy Harlow, the most important aspect of Spotify’s business success is the ability to offer music at scale–or as Thom Yorke said more accurately, the ability to commoditize music.  Commoditizing music is also exactly what Google’s goal is with the YouTube data honeypot, for example, as scale makes scraping the data from YouTube users more profitable.

YouTube Tracking

For these reasons, I think Lowery is on to something with the whistleblower disclosures.  I would agree with David that artists would want to know if their manager is participating in this co-opting exercise.  It’s all entirely believable to me as it is a 100% fit with Google’s modus operandi that I have observed.

How far does this influence penetrate the many MMF chapters?  And what about the International Music Managers Forum umbrella association?

Strange Bedfellows for the IMMF

The mission statement of the International Music Managers Forum says:

The IMMF is an international umbrella organisation comprising of regional associations of music managers from +30 countries from five continents, which currently represent +1.200 artist managers. It’s the IMMF’s mission is to defend the economic and legal interests of artists on an international scale with the vision to create Transparency and Fairness. This shall be accomplished by three core activities: training and education, networking and lobbying.

Sounds good, right?  So why is the IMMF part of a lobbying astroturf group based in Brussels (to lobby the European Commission) called “Copyright 4 Creativity“?  The group features on its home page the IMMF’s “Open Letter on Record Label and Music Publishing Deals” as a tool to accomplish some lobbying goal.  That’s the letter that was written after the mysterious leak of the Spotify/Sony agreement.  So if the group is going to use that letter as a lobbying tool we would expect that the other members of Copyright 4 Creativity would be in line with the IMMF’s mission statement, right?

Wrong.  For starters, the Computer and Communications Industry Association (Google is a member), the Center for Democracy and Technology and the Electronic Frontier Foundation (Google provides support) are all backed by Google.  Google was forced to disclose that connection in its litigation with Oracle on a filing that has become known as the “Google Shill List.”   These groups are also included in Public Citizen’s “Mission Creep-y” lists.

There are some other names on that list that seem odd bedfellows for the IMMF that purports to represent artists but in which artists have an indirect voice at best.  This is a prime example of why artists who take individual action can be so effective (I’m especially thinking of David Lowery and Blake Morgan).

For example, Google and the Computer and Communications Industry Association are also members of the MIC Coalition, a massive lobbying effort organized to continue the practice of denying artist pay for radio play in the US.  I think it’s fair to say that the CCIA has opposed every effort by artists and songwriters to improve their lives.

Dima Panel

Using IMMF positions to lobby for the goals of these other groups seems antithetical to an artist rights organization that the IMMF purports to be.  It’s certainly something deserving of a vote by artists.

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.

Here’s the real problem–artists have never confronted a multinational media corporation that is willing to spend millions and millions to undermine copyright and artist rights on a worldwide basis.  Through lobbying and strategic investments in academics, astroturf groups and competitors, Google is doing just that while at the same time trying to pass itself off as your best friend.  So the question is how many of the members of Copyright 4 Creativity get money from Google and is IMMF in that position?

There may be explanations for how MMF-UK and IMMF have ended up in this situation, and I’d love to hear what it is.  We owe them a fair hearing, but I think they owe artists an explanation and an opportunity to be heard.  That’s a fundamental aspect of the legitimacy of representation.

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