Europe’s Piracy Dilemma

Internet intermediaries have scored some big policy victories recently: they’ve escaped strict regulation of their advertising businesses by a California voter initiative and they’ve avoided (for the moment) strict content filtering in Europe. These victories come at a cost, however.

In the place of the California initiative, intermediaries such as Google and Facebook will have to comply with a very lengthy, poorly-drafted law that outlaws such practices as grocery store loyalty programs. While the EU content filtering measure escaped fast-track passage, it now faces extensive debate in the European Parliament, not a pleasant prospect.

The California measure can – and will – be amended before it takes effect. But it’s likely that the EP will pass a measure that requires some level of content identification by the likes of YouTube before the battle is won or lost.

SOPA Revisited

The EU measure was derailed by the usual coalition of the Pirate Party, the big intermediaries, and pressure groups claiming to speak for the public. MEPs were given a petition with close to a million signatures warning them to: “Stop the censorship-machinery! Save the Internet!”

Internet luminaries from Tim Berners-Lee to Jimbo Wales of Wikipedia warned the MEPs not to enact anti-piracy measures despite the fact that non-profits are specifically exempt. And academic papers written for lobbying groups claiming content filters are expensive and ineffective were circulated.

EFF, our least favorite advocacy group, was in the thick of fray, encouraging continuation of the status quo. The Digital Rights Group assembled a list of Twitter accounts used by people who favor copyright enforcement, all the better to monitor them.

Speaking for Artists

Sir Paul McCartney wrote an eloquent letter asking MEPs to protect artists from Silicon Valley’s rapacious ways:

Music and culture matter. They are our heart and soul. But they don’t just happen: they demand the hard work of so many people. Importantly, music also creates jobs and economic growth and digital innovation across Europe.

Unfortunately, the value gap jeopardizes the music ecosystem. We need an Internet that is fair and sustainable for all. But today some User Upload Content platforms refuse to compensate artists and all music creators fairly for their work, while they exploit it for their own profit.

The value gap is that gulf between the value these platforms derive from music and the value they pay creators…

Please vote to uphold the mandate on Copyright and Article 13. You hold in your hands the future of music here in Europe.

The appeal didn’t fall entirely on deaf ears; the vote was 318-278, a lot closer than previous anti-piracy measures have been.

The Technical Question

Article 13 requires UGC sites such as YouTube to apply upload filters to content submitted by users before making it available to the public. To a limited extent, YouTube does this today because of agreements it has made with creative industries to make some content available provided other content it restricted.

The YouTube system isn’t complete, but it’s good enough to be helpful. Most unlawful uploads of music and movies are recent releases, so the database doesn’t have to include every work ever created.

Upload filters in use today aren’t 100% accurate either; they may have one – two percent false positive rates, but these can be rectified by the CDA’s appeal process. The major issue is ensuring that once a piece of content is taken down it’s not simply re-uploaded.

Easier to Detect Repeat Offenses

One of the artists’ main complaints about Section 512 of the DMCA is that the notice-and-takedown process is easily defeated by users who simply upload unlawful content over and over again. User IDs are free, and any song or movie that can be uploaded once can be uploaded twice.

UGC intermediaries complain that automated filtering is costly and ineffective, but this is a crocodile tears argument. It can be somewhat costly to match each upload against a large database of copyright works, for sure.

But once this lengthy process has been undertaken, it’s extremely less expensive – as well as less error prone – to identify identical copies of works that have been found to be infringing. This is something UGC intermediaries don’t want to do, but it’s something they must do. It’s simply a cost of doing business in this space.

Business Priorities

The logic of Section 512 of the DMCA is the problem here. This measure was intended to jump-start Internet use on the US by making free content available to people who didn’t see any reason to pay for Internet service in the mid ’90s.

The implicit message of Section 512 is: “come to the Internet, where all the movies and music are free!” When YouTube was started, one of the founders seeded it with recently-released movies to make sure people knew what it was about. This came out in a lawsuit Viacom filed against YouTube in 2007:

“In a July 19, 2005 e-mail to YouTube co-founders Chad Hurley and Jawed Karim, YouTube co-founder Steve Chen wrote: ‘jawed, please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.'”…

The basic argument here is a simple one. YouTube’s founders hoped to build a massive user base as quickly as possible and then sell the site. “Our dirty little secret… is that we actually just want to sell out quickly,” said Karim at one point. In an e-mail, Chen talked about “concentrat[ing] all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil.”

Things haven’t changed as much as they should at YouTube.

User Generated Content is a Weak Business Proposition

YouTube and Facebook pay for the servers and networks that enable their sites to run, but (for the most part) they pay nothing for content. They take in money from ad sales (and in YouTube’s case, from handouts from the mother company obtained from ad sales). But they claim not to make enough money to pay for content filtering.

This is peculiar because big YouTube stars who actually do create their own content and make money from it should provide the site with enough income to prosper while maintaining a responsible business model. The big stars also don’t require much in the way of takedown issues either.

Their problem in the long tail of pirates, scammers, and amateurs who impose costs on the platform but don’t generate revenue. That’s a business model issue that should concern Alphabet. It’s not an excuse for making artists pay for YouTube’s content-related costs out of their own pockets to support piracy.

I’d like to see the Europeans deal with this problem in a serious way. Our government has shown itself to be too weak and ineffective to man up to it.