December 23, 2003

See, It All Worked Out In the End, Didn’t It? [6:18 pm]

Statement by Assistant Attorney General R. Hewitt Pate Regarding the Closing of the Digital Music Investigation - (CNet News article: DOJ closes Net music antitrust scrutiny)

“The Division’s substantial investigation of pressplay and MusicNet has uncovered no evidence that the major record labels’ joint ventures have harmed competition or consumers of digital music. Consumers now have available to them an increasing variety of authorized outlets from which they can purchase digital music, and consumers are using those services in growing numbers.

“None of the several theories of competitive harm that the Division considered were ultimately supported by the facts. The Division found no impermissible coordination among the record labels as to the terms on which they would individually license their music to third-party services. The development of the digital music marketplace similarly belies any concerns that the record labels used their joint ventures to stifle the development of the Internet music marketplace and to protect their present positions in the promotion and distribution of prerecorded music in physical form.”

From the Background information from the DoJ we get this summary:

The Division considered in its investigation whether the major record labels used their joint ventures to suppress the growth of the Internet as a means of promoting and distributing music, in order to protect their present positions in the distribution of music on physical media, such as CDs. Proceeding collectively could have allowed the major record labels to explore the use of the Internet to promote and distribute their music, without relinquishing control over the pace and direction of those activities.

The poor quality and restrictive nature of pressplay’s and MusicNet’s services at launch in December 2001 provided some support for this theory. As time passed, however, both joint ventures released improved and more consumer-friendly versions of their services, and the major labels licensed their music to a broader array of third-party music services that compete on price and features. Consumers can now download individual songs from broad music collections offered by at least five such services, and might soon be able to choose among a dozen suppliers. The Division concluded from those developments that the major labels are not impeding the promotion and distribution of music over the Internet.

So, think about the recent reviews of the e-music services and see if you can reconcile them with the DoJ’s conclusions. And let’s not even go into the question of what the record companies were up to in the days before pressplay and MusicNet even existed (Napster, MP3.com and others — see John Alderman’s Sonic Boom) Or, for that matter, the ruinous business models that the emusic retailers operate under.

Then, ask yourself the following question: how do we reconcile the desire to achieve competitive markets through the application of conventional processes and investigative techniques in an era where things happen on Internet time? Particularly when our justice system lately seems to be organized around the idea that, as long as an earlier crime can be rectified with actions that yield no apparent net economic damage, then there’s nothing to prosecute (c.f., Halliburton’s gasoline price-gouging being resolved by asking for the difference between the charged price and the fair market price, rather than seeking some kind of deterring punishment?)

Bah! Humbug! Be interesting to see how much of the record of this investigation becomes public.

Update, Dec 25: the Slashdot discussion, interestingly enough, is about exactly the same issues I snarled about here — DOJ Drops Online Music Antitrust Investigation

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Bollywood and KaZaA [2:13 pm]

Via Slashdot: Bollywood in Internet download deal

India’s film makers are offering Internet movie downloads on web site Kazaa in a move that could lower costs and boost revenues in Bollywood, the world’s most prolific film production centre.

Some 35 producers will be able to sell movies using Kazaa, a file-sharing program owned by Australia’s Sharman Networks, according to company statement.

“In a distribution deal struck between Sharman’s partner Altnet… and IndiaFM.com, one of the most popular Bollywood entertainment sites, Kazaa’s estimated 60 million global users will gain access to previously unavailable content,” the statement said.

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Wired on What’s Next Post-Verizon [2:04 pm]

Battle Not Over for File Sharers — largely a rehash of recent discussions, but a few additions to be found in terms of legal strategies:

Last week’s court decision preventing the recording industry from forcing Internet service providers to identify their subscribers on peer-to-peer networks offers new hope to file traders who have been sued.

But fighting the RIAA may prove costly for anyone hoping to challenge the trade group, which spends an estimated $17 million annually in legal fees.

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Doug Isenberg’s Internet Law Roundup [2:01 pm]

From CNet News, a roundup of the year’s Internet law developments: Unexpected twists in Internet law

Internet law in 2003 was full of surprises, with Congress passing an antispam bill, the courts blessing pop-up advertising, the music industry losing lawsuits and the Supreme Court finally upholding an Internet law.

Note that Doug runs GigaLaw

Update: Slashdot discussion, The Year In Tech Law

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This Should Be Interesting [12:20 pm]

Copyright, Innovation, and the Internet at New York Law School. Check out the assignment list — [via Derek]

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Seem Linus Torvalds Disagrees With SCO, Again [9:16 am]

Slashdot: Linus Blasts SCO’s Header Claims, citing a Torvalds comment to the kernel mailing list.

What this tells me is that the original code never came from UNIX, but some architectures later were made to use the same values as UNIX for binary compatibility (I know this is true for alpha, for example: being compatible with OSF/1 was one of my very early goals in that port).

In other words, I think we can totally _demolish_ the SCO claim that these 65 files were somehow “copied”. They clearly are not.

Which should come as no surprise to people. But I think it’s nice to see just _how_ clearly we can show that SCO is - yet again - totally incorrect.

Update: See also the NYTimes Creator of Linux Defends Its Originality and a GrokLaw commentary: Funniest Story of the Day: SCO’s Linux “Expert” Contradicts Linus (Semi-related: Novell Registers Unix Copyrights

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Billboard on the Verizon Decision [9:00 am]

RIAA: Suits To Continue Despite Verizon Court Win

The Recording Industry Association of America expressed disappointment Friday after a federal appeals court ruled that the trade group has no authority to compel Internet service providers to turn over the identities of subscribers who use peer-to-peer file-sharing services. However, the trade group vowed to continue with its lawsuits against consumers suspected of infringing copyrights.

[...] The RIAA says it will now have to file “John Doe” lawsuits based on e-mail addresses of suspected infringers, a much slower process that requires significant judicial oversight.

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More on Corporate Sponsorship of Free Music Online [8:55 am]

From CNN: 2004 to bring loads of ‘free’ Net music

The great digital music giveaway is about to begin. In the new year, some of the world’s biggest brands will promote their products and services by doling out millions of free downloads through alliances with digital music services.

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“You’re going to see lots of free music given out via third-party companies,” buymusic.com founder Scott Blum says. “It’s not going to be Apple and iTunes driving the business. It’s going to be companies like Pepsi and other third parties that are promoting digital music on bottle caps and on labels.”

[...] The promotions come at a time when brand marketers, particularly beverage companies, are looking to establish broad connections between music and their products — a strategy well-served by digital music giveaways.

Music giveaways are understood to foster customer loyalty. What’s more, they provide consumers with powerful incentives to use the related products, executives say.

The trend has major implications for the nascent digital music business.

Digital download giveaways are just the latest wrinkle in a deepening relationship between the brand marketing community and the music industry.

Youth-oriented lifestyle brands like to piggyback on the strong emotional ties that young consumers have with their favorite songs and artists.

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A Look at a Related Internet Privacy Case [8:43 am]

The Register has a Security Focus article by Mark Rasch: Jane Doe ruling limits effect of RIAA legal defeat, discussing the implications of a Connecticut Superior Court decision that, he argues, may lead to a revised RIAA subpoena strategy that is equally intrusive/pervasive (of course, so far it’s only a Connecticut state court opinion, subject to review):

This provides a road map to the RIAA. While (absent a successful appeal) they may no longer issue hundreds of blanket DMCA subpoenas - at least in the District of Columbia - they can file hundreds of blanket ‘John Doe’ copyright infringement lawsuits and then issue hundreds of ordinary civil subpoenas. Or, they can go to Congress and have the DMCA amended to specifically include P2P networks.

So while the court ruling may slow the RIAA, there are many other arrows in their quiver.

Also, since the Connecticut case was about defamatory speech, rather than copyright infringement, I’m unconvinced of this argument — but there’s no question that the RIAA is not going to give up and go away…

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