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Administrative Agency Copyright Innovation Internet Legislation Uncategorized

FCC’s Extreme Proposal Threatens the Livelihood of Creators

By Matthew Barblan & Kevin Madigan

circuit board

Earlier this year, the FCC proposed a new regulatory scheme ostensibly designed to improve the market for pay-TV set-top boxes. Chairman Wheeler claimed that the proposed rules would “tear down the barriers that currently prevent innovators from developing new ways for consumers to access and enjoy their favorite shows and movies on their terms.” But set-top boxes are already on their way out as more and more consumers turn to streaming apps to watch their favorite movies and shows. So what is the FCC up to here? A close look at the proposed rules reveals that this isn’t about set-top boxes at all. Instead, the rules are designed to benefit a handful of companies that want to disseminate pay-TV programs without negotiating with or paying a license to the owners of those programs, undermining the property rights of creators and copyright owners. The creative community is understandably up in arms.

As we explain in comments filed with the FCC, the proposed rules would require pay-TV providers to make copyrighted video content available to third-party companies that have no contractual relationship with either the pay-TV providers or the creators of the video programming. The Commission essentially aims to create a zero-rate compulsory license for these companies. But this zero-rate compulsory license would fundamentally disrupt copyright owners’ ability to pursue the wide variety of business models and licensing arrangements that enable our creative ecosystem to thrive.

A key component of copyright owners’ property interest is the ability to choose to whom they license their works and on what terms. Because their livelihoods depend on the success of their works, copyright owners are particularly well-positioned and incentivized to determine the best way to commercialize them. By conveying copyrighted works to third parties without the consent of copyright owners, the proposed rules trample on the property rights of copyright owners and risk severely damaging our vibrant creative economy.

Adding insult to injury, the proposed rules wouldn’t even require the recipients of this zero-rate compulsory license to abide by the underlying contractual terms between copyright owners and pay-TV providers. Licensing contracts between copyright owners and pay-TV providers often include specific terms detailing the obligations of the provider in distributing the creative works. These terms can include things like channel “neighborhood” assignments, branding requirements, advertising limits, platform restrictions, and the list goes on. While the Commission states that “our goal is to preserve the contractual arrangements” between copyright owners and pay-TV providers, the proposed rules would transfer some, but not all, of the underlying contractual obligations to the third-party recipients of the copyrighted works.

For example, under the Commission’s proposal, third-party recipients of the copyrighted works would not be required to abide by contractual terms about channel placement designed to protect viewer experience and brand value. Similarly, the Commission’s proposal would not require third-party recipients of copyrighted works to abide by contractual terms concerning advertising in the delivery of those works. By allowing third parties to sidestep these terms, the Commission risks reducing the advertising revenue that pay-TV providers can earn from disseminating copyrighted works, thereby reducing the value of the license agreements that copyright owners negotiate with pay-TV providers.

In another thumb-in-the-eye to creators and copyright owners, the Commission’s proposal fails to account for copyright owners who may want to protect their copyrighted works by disseminating them exclusively through proprietary (and not widely licensable) content protection mechanisms. Instead, the Commission proposes to require pay-TV providers “to support at least one content protection system to protect its multichannel video programming that is licensable on reasonable and nondiscriminatory terms by an organization that is not affiliated with [the pay-TV provider].” Thus, the Commission would force copyright owners to risk exposing their property to security threats that may be associated with using widely-licensable content protection mechanisms.

Furthermore, nothing in the Commission’s proposal would prevent third parties from delivering the copyrighted works side-by-side with stolen versions of those same works. It is easy to imagine a search function that aggregates copies of creative works from a variety of platforms and displays the search results side-by-side. In fact, anyone who has run an internet search for a movie or TV show has likely seen results that mix links to both legitimate and stolen works.

Copyright owners’ ability to protect their creative works is essential both to preserve the value of their property and to give them the confidence to enter into arrangements with intermediaries (like pay-TV providers) to disseminate their works to a wide variety of audiences. This is especially true in light of the unique security challenges involved in portable, online, and short-term access to copyrighted works. Any reasonable proposal in this space would help copyright owners move forward in the ongoing battle to prevent the rampant theft and illegal dissemination of their works that has accompanied the rise of the internet. Unfortunately, the Commission’s proposal does just the opposite, limiting copyright owners’ ability to protect their property and pushing them backwards in the ongoing struggle against piracy.

Furthermore, it is entirely unclear where the Commission would draw the legal authority to change the nature of copyright owners’ property rights. The proposed rules simply claim that Section 629 of the Communications Act grants the Commission authority to implement the regulations in order to ensure competition and consumer choice in the navigation device market. In its justification of authority, the Commission repeatedly states that it will broadly interpret ambiguous terms in the Communications Act and that “a broad interpretation is necessary.” But nowhere in its analysis does the Commission cite to language granting it the authority to rewrite copyright law. Even under the broadest of interpretations, it is clear that the Communications Act does not give the Commission the authority to amend the Copyright Act and create a zero-royalty compulsory license out of thin air.

By granting artists and creators property rights in the fruits of their labors, copyright supports a diverse and multifaceted ecosystem that enables the development, distribution, and enjoyment of creative works, and that provides significant economic and cultural benefits to our society. But this ecosystem only works if copyright owners are able to safely and freely deploy their property in the marketplace. Unfortunately, the Commission’s proposal fails to respect the property rights of creators and copyright owners, risking severe disruption to the very same creative marketplace the Commission claims to promote.

Categories
Antitrust Copyright International Law Internet Uncategorized

Google Image Search and the Misappropriation of Copyrighted Images

Cross-posted from the Mister Copyright blog.

Last week, American visual communications and stock photography agency Getty Images filed a formal complaint in support of the European Union’s investigation into Google’s anti-competitive business practices. The Getty complaint accuses Google of using its image search function to appropriate or “scrape” third-party copyrighted works, thereby drawing users away from the original source of the creative works and preserving its search engine dominance.

Specifically, Getty’s complaint focuses on changes made to Google’s image search functionality in 2013 that led to the appealing image galleries we’re familiar with today. Before the change, users were presented with low-resolution thumbnail versions of images and would be rerouted to the original source website to view a larger, more defined version and to find out how they might legally license or get permission to use the work. But with the current Google Image presentation, users are instantly delivered a large, desirable image and have no need to access the legitimate source. As Getty says in its complaint, “[b]ecause image consumption is immediate, once an image is displayed in high-resolution, large format, there is little impetus to view the image on the original source site.”

According to a study by Define Media Group, in the first year after the changes to Google Image search, image search referrals to original source websites were reduced by up to 80%. The report also provides before and after screenshots of a Google Image search and points out that before 2013, when a thumbnail was clicked, the source site appeared in the background. Not only does the source site not appear in the new version, but an extra click is required to get to the site, adding to the overall disconnect with the original content. Despite Google’s claims to the contrary, the authors of the study conclude that the new image search service is designed to keep users on the Google website.

It’s difficult not to consider Google’s image UI [user interface] change a shameless content grab – one which blatantly hijacks material that has been legitimately licensed by publishers so that Google Image users remain on their site, and are de-incentivized from visiting others.

While Getty’s complaint against Google is based on anticompetitive concerns, it involves the underlying contention that Google Image search enables misappropriation of copyrighted images on a massive scale. Anyone who has run a Google Image search knows that with the click of a mouse, a user is presented with hundreds of images related to their query, and with another simple right click, that user can then copy and paste these images as they please. But Google Image search often returns an abundance of copyright protected images, enabling anyone to copy, display and disseminate images without considering the underlying copyright and existing licenses. And while using the service may be free, make no mistake that Google is monetizing it through advertisements and the mining of users’ personal data.

When users are able to access and copy these full-screen, high resolution images from Google Image search, not only do third-party image providers lose traffic to their website, but the photographers and creators behind the images lose potential income, attribution and exposure that would come with users accessing the original source. As General Counsel Yoko Miyashita explains, “Getty Images represents over 200,000 photojournalists, content creators and artists around the world who rely on us to protect their ability to be compensated for their work.” When Google Image search obviates the need for a user to access the original creative content, these artists and creators are being denied a fair marketplace for their images, and their ability and motivation to create future works is jeopardized.

Shortly after Google changed to the new image search, individual photo publishers and image creators took to a Google Forum to voice their concerns over the effects the service was having on their images and personal web pages. A recurring complaint was that the service made it more difficult to find out information about images and that users now had to go through more steps to reach the original source website. One commenter, identifying herself as a “small time photo publisher,” described Google’s new practice of hotlinking to high-resolution images as a “skim engine” rather than a “search engine.” She lamented that not only was Google giving people access to her content without visiting her site, but her bandwidth usage (i.e. expense) went up due to the hotlinking of her high resolution images.

Google Image supporters argue that creators and image providers should simply use hotlink protection to block Google from displaying their content, but Google’s search engine dominance is so absolute, this would further curtail traffic to the original source of the content. Others suggest image providers stamp their images with watermarks to protect from infringement, but Getty VP Jonathan Lockwood explains that doing so would result in punishment from Google.

They penalise people who try to protect their content. There is then a ‘mismatch penalty’ for the site: you have to show the same one to Google Images that you own. If you don’t, you disappear.

The internet has made sharing creative works and gaining exposure as an artist easier than anyone could have imagined before the digital age, but it has also brought challenges in the form of protecting and controlling creative content. These challenges are particularly burdensome for image creators and providers, whose creative works are subject to unauthorized use the moment they are put online. Over the last few years, Google Image search has contributed to this problem by transforming from a service that provided direction to creative works to a complete substitute for original, licensed content.

With fewer opportunities for image providers and creators to realize a return–whether it be in the form of payment, attribution, or exposure–from their works, creativity and investment in creators will be stifled. Artists and rightsholders deserve fair compensation and credit for their works, and technology needs to work with image providers rather than against them to ensure that great content continues to be created.

Categories
Copyright Internet Legislation Uncategorized

Copyright Policy Should Be Based On Facts, Not Rhetoric

Here’s a brief excerpt of a post by Kevin Madigan & Devlin Hartline that was published on IPWatchdog.

After nearly twenty years with the DMCA, the Copyright Office has launched a new study to examine the impact and effectiveness of this system, and voices on both sides of the debate have filed comments expressing their views. For the most part, frustrated copyright owners report that the DMCA has not successfully stemmed the tide of online infringement, which is completely unsurprising to anyone who spends a few minutes online searching for copyrighted works. Unfortunately, some commentators are also pushing for changes that that would make things even more difficult for copyright owners.

To read the rest of this post, please visit IPWatchdog.