President Obama’s Farewell Address on Social Media’s Threat to Democracy

GARCIN: …So this is hell. I’d never have believed it. You remember all we were told about the torture-chambers, the fire and brimstone, the “burning marl.” Old wives’ tales! There’s no need for red-hot pokers. Hell is—other people!

No Exit (Huis Clos), by Jean-Paul Sartre

In 1961, President Dwight D. Eisenhower’s prophetic farewell address famously warned of the growing “military industrial complex”:

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

Given Eisenhower’s history as a military officer of the highest rank, Ike knew of what he spoke only too well.

In 2017, President Barack Obama may well have given his own prophetic warning of a different unholy alliance between government and industry, but this time there won’t be a song written about it called “Masters of War,” except maybe “Masters of the Internet” (by Ceramic Dog/Marc Ribot) or “March of the Billionaires” by Cracker (written by Faragher-Hickman- Lowery-Urbano).

The President warned in his farewell address (“the great sorting”):

For too many of us, it has become safer to retreat into our own bubbles, whether in our neighborhoods, or on college campuses, or places of worship, or especially our social media feeds. Surrounded by people who look like us and share the same political outlook and never challenge our assumptions.  The rise of naked partisanship and increasing economic and regional stratification, the splitting of our media into a channel for every taste. All this makes this great sorting seem natural, even inevitable. Increasingly, we become so secure in our bubbles that we start only accepting information, whether its true or not, that fits our opinions, instead of basing our opinions on the information that is out there.

As Maya Kosoff reflects on President Obama’s warning in Vanity Fair:

Today, 62 percent of U.S. adults say they get their news from social media, often relying on news stories shared within their own self-selected digital bubbles. Facebook, which has finally accepted some culpability for its role in disseminating unchecked misinformation, is still experiencing growing pains as it evolves, whether willingly or not, from a social network into a media company. But the problem runs deeper. Studies in recent years suggest media fragmentation has increased partisanship—that is, paradoxically, the vast array of news outlets at our disposal today have given way to more explicitly ideological ones and have helped contribute to an increase in partisanship and polarized political opinion. [Emphasis mine]

Facebook’s own internal studies developed in Facebook’s “Core Data Science Team” as well as medical research into Internet addiction confirms what Sean Parker revealed this week–Facebook intentionally profits from addiction.  And as Professor Adam Alter teaches us about behavioral addictions, the addiction that Sean Parker tells the world was perfected by Facebook is every bit as addictive as substance addiction:

People have been addicted to substances for thousands of years, but for the past two decades, we’ve also been hooked on technologies, like Instagram, Netflix, Facebook, Fitbit, Twitter, and email—platforms we’ve adopted because we assume they’ll make our lives better. These inventions have profound upsides, but their appeal isn’t an accident. Technology companies and marketers have teams of engineers and researchers devoted to keeping us engaged. They know how to push our buttons, and how to coax us into using their products for hours, days, and weeks on end.

Mark Zuckerberg would have us believe that the true purpose of Facebook is to bring the world closer together.  I’m a skeptic, and here’s why.

The good thing about Facebook is that it brings people together in new communities.  The bad thing about Facebook is that some of those people previously only met on Death Row.  And as Sartre said, hell is other people.

 

 

 

 

Must Read: @zvirosen Critiques Florida Flo & Eddie Ruling: Another Season, Another Common-Law Copyright Opinion

This one from the Supreme Court of Florida, finding that Florida common law does does not recognize an exclusive right of public performers for the holders of common-law copyrights in sound recordings made before February 15, 1972.  The 11th Circuit certified a series of questions to the Florida Supreme Court…Instead of addressing these questions, the Court chose to address a reformulated question of its own, “Does Florida common law recognize the exclusive right of public performance in pre-1972 sound recordings?”

The obvious problem with this is that it fails to address whether pre-72 sound recordings are protected under Florida law more generally.  The Court notes (pp. 19-20) that Florida criminal law provides penalties against commercial bootleggers of sound recordings, but those criminal provisions do not impact a range of activity including noncommercial infringement.

This could be excused as judicial minimalism if it wasn’t central to the case – Flo & Eddie sued in Florida specifically because SiriusXM has servers there, and alleged that copying was ongoing on those servers in violation of their exclusive right of reproduction.

Read the post on Mostly IP History

Google’s Racketeering Challenge

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Eric Schmidt confers with some confused witnesses

According to a recent civil lawsuit, a plaintiff is suing Google for violating the racketeering laws (aka “RICO”).  (Attia et al v. Google et al, Cal. Sup. Ct. (Santa Clara) Case No. 1:14-cv-270143.)  I’ve been waiting for this since 2012 when it dawned on me one day that Google is running a criminal enterprise (see “Google’s Guide to RICO“).  So what does this RICO business mean?

If you’re even occasionally exposed to contemporary crime movies you’ll have heard of “RICO”.   The “RICO” statute is the acronym for the Racketeer Influenced and Corrupt Organization Act which allows a criminal prosecution against the leaders of an “ongoing criminal enterprise”, particularly where the leaders of that organization order others to commit crimes, often called “RICO predicates”.  The loophole was that leader didn’t do the crime, but ordered or assisted others in committing it.  (Recall the Senate hearings in The Godfather II, and see the first major RICO criminal case, US v. Scotto, 641 F.2d 47 (1980) for those reading along.)  You know, that thing that happened with those guys down at that place we used to go back in the day.

Often overlooked is the civil cause of action that may be brought either by the government or by private citizens under both the federal RICO statute and the 33 or so state law versions of RICO.  This allows private citizens who have been harmed by corrupt organizations to sue for treble damages and attorneys fees.  The Department of Justice civil RICO manual is also instructive for government action under the statutes:

Civil RICO, 18 U.S.C. § 1964(a), authorizes potentially intrusive remedies, including injunctive relief [typically sought by the government], reasonable restrictions on defendants’ future activities, disgorgement of unlawful proceeds, divestiture, dissolution, reorganization, removal from positions in an entity, and appointment of court officers to administer and supervise the affairs and operations of defendants’ entities and to assist courts in monitoring compliance with courts’ orders and in imposing sanctions for violations of courts’ orders.

RICO remedies are ample and were intended to be applied against white collar criminals as well as organized crime bosses.  The statute was drafted by Professor G. Robert Blakey–remember that name–now the William J. and Dorothy K. O’Neill Chair in Law Emeritus at the University of Notre Dame School of Law.  As Professor Blakey told Time magazine:

“We don’t want one set of rules for people whose collars are blue or whose names end in vowels, and another set for those whose collars are white and have Ivy League diplomas.”

Or whose collars are white, have Ivy League diplomas and live in Silicon Valley.

According to reports, Professor Blakey is advising Mr. Attia in filing an amended complaint in Mr. Attia’s case against Google alleging RICO violations in addition to the core claims of bad behavior by Google against Mr. Attia (The Verge has a good summary of the pre-RICO filing here).

What is particularly interesting about the RICO filing is that it turns on the RICO intellectual property theft predicate (at p. 28):

1. Defendants [meaning Google and certain Google executives and affiliates] have a long history of theft of others intellectual property which continues to date and which constitutes a pattern of racketeering activity 

112.  Defendants have engaged in a pattern of racketeering activity, as defined in 18 U.S.C. § 1961(5), through the repeated, relentless, and purposeful theft of other companies’ IP and trade secrets. 

113. Defendants have engaged, and continue to engage, in a pattern of activity whereby Defendants: 1) seek out inventors; 2) promise such inventors that Google will invest in, partner with and/or seek to acquire a license for any proprietary inventions of the investor; 3) sign a non-disclosure agreement (NDA) with inventors; 4) upon inducing inventors to reveal trade secrets and other confidential information, Google disregards the NDA and misappropriates the trade secrets; and 5) Google then subsequently attempts to box-out the victim inventors from the market by filing numerous patent applications which result in the unauthorized disclosure of the inventors’ trade secrets and the subsequent granting of a monopoly on the technology by the issuance of the patent. Where no NDA is required, Google has simply copied and criminally stole other inventors’ copyrights….

115. Google, Inc. and its executives—among others—have repeatedly had criminal and anti-trust investigations brought against them by governments around the world for their repeated theft. For example:

• Google was fined $500 million by the U.S. government for its role in the promotion of piracy through illegal online pharmacies;

• In June of 2017, Google was hit with a $2.7 billion fine from the European Union for its anti-competitive conduct in skewing search results. Google is still under investigation for its conduct with regards to its AdSense and Android software and business model which may lead the company to face even further fines;

• The U.S. Federal Trade Commission concluded that Google “used anticompetitive tactics and abused its monopoly power in ways that harmed Internet users and rivals”;

• Google was charged by the FTC with engaging in deceptive privacy practices for stealing and publishing consumers email contact lists and was ordered to submit to regular independent privacy audits for the next 20 years;  and

• Google was investigated by numerous countries when it was learned that Google’s street-view illegally stole persons’ wifi information, passwords, names, addresses and emails among other personal information….

c. Theft of others intellectual property is the Google and Flux Factory Enterprise’s regular way of doing business 

153. Violations of RICO predicate acts (e.g. theft of trade secrets and criminal infringement of copyright) are the regular way of conducting Defendants’ businesses. The previous non-exclusive list of acts of racketeering evidences a pattern of racketeering, the acts of which are related, not isolated, and continue to date by threat of further operation of Defendants’ business and through Defendants continued use of already stolen trade secrets for profits. Based on all of the following, Defendants have demonstrated that their regular way of doing business is through racketeering (e.g. by theft of trade secrets and criminal infringement of copyright) such that they are liable for harm done to others by their acts of racketeering under the Federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961, et seq.

6. Larry Page, Sergey Brin, Google, Inc., and its associates have participated in a criminal enterprise 

154. Each Plaintiff is a “person” within the meaning of 18 U.S.C. §§ 1961(3); 1964(c).

155. Each Defendant is a “person” within the meaning of 18 U.S.C. §§ 1961(3) and 1962(c)….

168. Plaintiffs hereby incorporate in the pattern of racketeering shown in ¶¶ 112–153. This pattern of racketeering evidences an intent by Defendants to continuously conspire to make income from acts of racketeering (e.g. theft of trade secrets) and to invest and/or use those funds within the greater Google Enterprise.

169. Moreover, Google, the Individual Defendants, and Flux Factory, Inc., conspired with certain venture capital firms (Does 1, 2, and 3) in order to assist in the development of the Flux Enterprise.

Sound familiar?  I’m not a RICO expert, but the RICO portion of the complaint seems to be very well-pleaded and a systematic application of the law and facts.  It’s also important to remember that Eric Schmidt, Larry Page and Sergey Brin have absolute control over Google (and Alphabet, the holding company) through Google’s bizarre voting rules as explained by the Motley Fool:

Google prevents activist investors from pressuring the company to do anything via its share class system.

There are currently three classes of Google stock — A, B, and C shares. Everyday investors can only buy A or C shares on the open market. A shares (GOOGL) are entitled to one vote, while C shares (GOOG) are entitled to zero votes. The C shares split off the original class A shares last year during its 2 for 1 split. Google uses A shares to pay its employees and fund acquisitions. Meanwhile, B shares, which are entitled to ten votes each, are only owned by Google’s founders and their inner circle.

Simply put, B shares give Google’s top brass the power to defend against any shareholder revolt. Shareholders united against that plan at a previous meeting, casting 180 million votes in favor of the elimination of share classes. Larry Page, Sergey Brin, Eric Schmidt and others crushed the proposal with 551 million votes.

Not only does the voting structure mean that insiders can block any shareholder revolt, it also means that insiders are totally responsible for any of the company’s bad acts.  That may explain why Eric Schmidt essentially “took the 5th” under questioning by Senator John Cornyn about Google executives’ narrow escape from criminal prosecution for violating and conspiring to violate the Controlled Substances Act.  Schmidt later claimed neither he nor his legal team “understood” the Senator’s questions and were “confused.”

This is, of course, another reason why Google was sued by its stockholders after insiders authorized the payment of $500,000,000 of the stockholders’ money as a fine for the bad behavior of insiders such as Larry Page.  In fact, the U.S. Attorney for Rhode Island told the Wall Street Journal that Larry Page was directly implicated in profiting from illegal drug advertising–which may have something to do with why the RICO claim refers to the $500,000,000 fine.  That stockholder settlement has one bizarre requirement that may shed some light on the RICO claims:

2.7 Criminal Activity Reporting

Google’s General Counsel shall be responsible for reviewing every situation in which a  Google employee is convicted of a felony under U.S. federal or state criminal statutes in connection with his employment by Google and for reporting to the Board (or an appropriate committee of the Board) with respect to that violation. Presumptively, any employee convicted of a felony under a U.S. federal or state criminal statute in connection with his employment by Google shall be terminated for cause and receive no severance payments in connection with the termination. If the General Counsel determines that such termination is not warranted, he shall so recommend to the Board (or an appropriate committee of the Board), which will act upon his recommendation in its discretion.

Leave aside how strange it is to have such a requirement in the settlement of a shareholder lawsuit in the first place–if it turns out that any of the Google insiders have actually been or get convicted of felonies as part of the racketeering case, the shareholder settlement will require the company to terminate that insider’s employment and  that will be that.

Where does it go?  Before you laugh it off, remember this:  If you had told a room full of MBAs in the mid 1980s that in a few years time Master of the Universe Michael Milken would be in prison and Drexel Burnham Lambert would be bankrupt, you would have been laughed out of the room as a quixotic buffoon.  But on March 29, 1989, Michael Milken was charged with 98 counts of racketeering and fraud and was facing life in prison.  That’s right–racketeering under the RICO Act.  Milken copped a plea to six lesser included crimes of securities and tax fraud, paid a $600 million fine and served 22 months in a federal pen on a 10 year sentence.

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He’s still rich, just not as rich as he was.  But Drexel never would have claimed the “don’t be evil” brand.  Even though unlike Google and the drug case, Milken paid his fine himself.  Drexel’s stockholders didn’t pick up the tab.

Of course, Milken was being prosecuted criminally and Attia is a civil case.   Different proof standards, no doubt, and different remedies, but otherwise, making a civil RICO case and a criminal RICO case are not wildly different.

Watch this space.

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@buzzfeedben: There’s Blood In The Water In Silicon Valley

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Before you think it can’t happen to Google or Facebook, remember–if you told a room full of MBAs in 1984 that in a few years time Drexel Burnham Lambert would be bankrupt and Michael Milken would be in prison, you would have been laughed out of the room.  And also remember–they almost got Google on violations of the Controlled Substances Act.  If you’re concerned, call your representatives at (202) 224-3121 and tell them you want an investigation into Google and its price fixing cartel the MIC Coalition.

The blinding rise of Donald Trump over the past year has masked another major trend in American politics: the palpable, and perhaps permanent, turn against the tech industry. The new corporate leviathans that used to be seen as bright new avatars of American innovation are increasingly portrayed as sinister new centers of unaccountable power, a transformation likely to have major consequences for the industry and for American politics.

That turn has accelerated in recent days: Steve Bannon and Bernie Sanders both want big tech treated as, in Bannon’s words in Hong Kong this week, “public utilities.” Tucker Carlson and Franklin Foer have found common ground. Even the group No Labels, an exquisitely poll-tested effort to create a safe new center, is on board. Rupert Murdoch, never shy to use his media power to advance his commercial interests, is hard at work.

“Anti-trust is back,

baby,” Yelp’s policy chief, Luther Lowe, DM’d me after Fox News gave him several minutes to make the antitrust case against Yelp’s giant rival Google to its audience of millions….

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So Facebook should probably ease out of the business of bland background statements and awkward photo ops, and start worrying about congressional testimony. Amazon, whose market power doesn’t fall into the categories envisioned by pre-internet antitrust law, is developing a bipartisan lobby that wants to break it up. Google’s public affairs efforts are starting to look a bit like the oil industry’s. These are the existential collisions with political power that can shake and redefine industries and their leaders, not the nickel-and-dime regulatory games Silicon Valley has played to date.

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Uncle Sugar and some witnesses

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The Shopkeeper–a must see movie for the artist rights movement

 

He’s worked with Carole King, Ani DiFranco, and a host of great Texas artists — but can music producer Mark Hallman keep his studio open in the age of streaming?

Everybody is talking about Spotify and the pros and cons of “free.” Musician and first-time filmmaker Rain Perry confronts a big issue by telling a small story – of the longest continuously operating recording studio in Austin, Texas, and the shopkeeper who runs it, Mark Hallman.

After recording Carole King, Ani DiFranco and many great Austin artists, Mark is struggling to keep the studio open in the era of streaming. Funny, sweet and insightful, with great music and interviews, The Shopkeeper captures the joy, resolute spirit and frustration of musicians today.

Starring:

Ani DiFranco
Charlie Faye
Colin Gilmore
Eliza Gilkyson
Johnny Goudie
Jon Dee Graham
Mark Hallman
Noell Hampton
Sara Hickman
Iain Matthews
Tom Russell
Will Sexton
and many more

If you’re not aware of this indie film about producer Mark Hallman and his Congress House Studios, you really should check it out.  Rain Perry tells the story that we all know from the point of view of a great craftsman. You can rent or buy the picture directly from the film maker here.

 

The Government’s Music Database: What Would Monk Do?

There is a fundamental difference between people with experience in the vagaries of copyright chain of title research and those who want their data served up in nice neat–very, very neat–packages.  So neat that you could eat your lunch off of those packages–one pea at a time arranged in a straight line, preferably.

Those who do not step on cracks have an especially difficult time understanding that song data is a dynamic process best left to the people who…well, who don’t mind the cracks.

Explaining this to our friends in the tech community is kind of like explaining the interpretation of a blood test to…well, to Monk.