Late last month, Mark Zuckerberg wrote a brief post on Facebook at the conclusion of Yom Kippur, asking his friends for forgiveness not just for his personal failures but also for his professional ones, especially “the ways my work was used to divide people rather than bring us together.” He was heeding the call of the Jewish Day of Atonement to take stock of the year just passed as he pledged that he would “work to do better.”
Such a somber, self-critical statement hasn’t been typical for the usually sunny Mr. Zuckerberg, who once exhorted his employees at Facebook to “move fast and break things.” In the past, why would Mr. Zuckerberg, or any of his peers, have felt the need to atone for what they did at the office? For making incredibly cool sites that seamlessly connect billions of people to their friends as well as to a global storehouse of knowledge?
Lately, however, the sins of Silicon Valley-led disruption have become impossible to ignore.
Facebook has endured a drip, drip of revelations concerning Russian operatives who used its platform to influence the 2016 presidential election by stirring up racist anger. Google had a similar role in carrying targeted, inflammatory messages during the election, and this summer, it appeared to play the heavy when an important liberal think tank, New America, cut ties with a prominent scholar who is critical of the power of digital monopolies. Some within the organization questioned whether he was dismissed to appease Google and its executive chairman, Eric Schmidt, both longstanding donors, though New America’s executive president and a Google representative denied a connection.
Meanwhile, Amazon, with its purchase of the Whole Foods supermarket chain and the construction of brick-and-mortar stores, pursues the breathtakingly lucrative strategy of parlaying a monopoly position online into an offline one, too.
Now that Google, Facebook, Amazon have become world dominators, the question of the hour is, can the public be convinced to see Silicon Valley as the wrecking ball that it is?
These menacing turns of events have been quite bewildering to the public, running counter to everything Silicon Valley had preached about itself.
[Editor Charlie sez: This is what happens when Silicon Valley gets its paws on the food supply. But Amazon will get away with it, not least because the lawyer who kept Larry Page and Eric Schmidt out of the slammer for violating the Controlled Substances Act is on Amazon’s board of directors: Jamie Gorelick.]
Amazon is under fire for reportedly inflating prices as Floridians prepare for Hurricane Irma.
However, some people have been disturbed to find wildly inflated prices for essentials such as water on the e-commerce site.
For example, a 24-pack of Aquafina — typically sold for less than $6 — was priced at $20. And, Deadspin editor Diana Moskovitz reported that a 24-pack of Nestle bottled water with expedited shipping was priced at $179.25.
Price gouging on essential items during emergencies is illegal in Florida, the Miami Herald reported. While Amazon is not based in Florida, the Florida Attorney General’s office told the Miami Herald that “If a business is selling an essential commodity to persons who are using it in Florida as a result of the emergency, the business may be subject to Florida’s price gouging law.”
[Editor Charlie sez: More on royalty deadbeat Facebook’s charm offensive, this time from Jim Cramer’s The Street featuring quotes from David Lowery. And notice–no mention of takers for the hillbilly deal offer.]
For years, Facebook chose not to pay licensing fees to music labels or songwriters despite the site’s billions of hours of uploaded music. The world’s most popular social media platform argued that because the site didn’t make it possible for users to search for a particular song, in the manner of Alphabet Inc.’s (GOOGL) YouTube, it wasn’t using music to drive sales….
Yet as Facebook’s priorities have evolved, so has its view on music. As CEO Mark Zuckerberg has repeatedly said of late, Facebook is focused on becoming a hub for premium video content, both from advertisers and users as well as original content for its Watch and other platforms.
As a result, Facebook has begun to negotiate licensing deals with the industry’s three major music labels as well as Merlin BV, which represents hundreds of independent distributors, according to a person familiar with the talks. A deal is likely to take place within months rather than years, the source said. News that Facebook had offered the labels hundreds of millions of dollars so that its users might legally upload music to the site was initially reported by Bloomberg on Tuesday, Sept. 5.
“It’s a major win for songwriters in that Facebook is actually admitting they need licenses,” said David Lowery, a lecturer in the music business program at the University of Georgia and frontman for the bands Cracker and Camper Van Beethoven. “If you expect to get major brands to spend big money on video advertising that’s professionally produced, you absolutely need licenses. That’s what’s driving this.”
[Editor Charlie sez: Remember that most of these companies are in the MIC Coalition cartel that is colluding to destroy songwriters, and royalty deadbeat Facebook refuses to license at all.]
Until recently, it was easy to define our most widely known corporations. Any third-grader could describe their essence. Exxon sells gas; McDonald’s makes hamburgers; Walmart is a place to buy stuff. This is no longer so. Today’s ascendant monopolies aspire to encompass all of existence. Google derives from googol, a number (1 followed by 100 zeros) that mathematicians use as shorthand for unimaginably large quantities. Larry Page and Sergey Brin founded Google with the mission of organizing all knowledge, but that proved too narrow. They now aim to build driverless cars, manufacture phones and conquer death. Amazon, which once called itself “the everything store,” now produces television shows, owns Whole Foods and powers the cloud. The architect of this firm, Jeff Bezos, even owns this newspaper.
Along with Facebook, Microsoft and Apple, these companies are in a race to become our “personal assistant.” They want to wake us in the morning, have their artificial intelligence software guide us through our days and never quite leave our sides. They aspire to become the repository for precious and private items, our calendars and contacts, our photos and documents. They intend for us to turn unthinkingly to them for information and entertainment while they catalogue our intentions and aversions. Google Glass and the Apple Watch prefigure the day when these companies implant their artificial intelligence in our bodies. Brin has mused, “Perhaps in the future, we can attach a little version of Google that you just plug into your brain.”
More than any previous coterie of corporations, the tech monopolies aspire to mold humanity into their desired image of it.
What appears to be a backdated NOI sent to the author. If this was intentionally backdated this is fraud. Note MRI is simply a third party that sent the notice on behalf of the service. All legal responsibility rests with the service.
Digital music services are trying to end songwriters ability to ever sue broadcasters and digital music services for copyright infringement with this bill. In order to sue for copyright infringement you have to mount a case in a federal court. Not your local district court. This is extremely expensive. I would estimate you need about $250,000 to effectively fight a case. This bill takes away statutory penalties and legal fees, even when the songwriter prevails. This makes it impossible for independent songwriters to exercise their legal rights. NAB Broadcasters and digital services like YouTube and Spotify can safely ignore songwriters, especially independent songwriters with no resources. Songwriters and publishers would have never been able to achieve the recent settlements against Spotify, without statutory penalties and legal fees.
So this may surprise you but I say “fine!” Take away our ability to mount copyright infringement lawsuits? We still have plenty of other (sometimes much more severe) remedies available. Most songwriters don’t really care about the money. The royalties are pretty paltry to begin with. This is really about the principle. This is about justice.
I’m no lawyer but the more I learn about the predicament of songwriters in the US, it feels like something more than just copyright infringement seems to be going on. My layman’s reading of the situation makes me wonder if this isn’t exactly what the authors of the RICO laws had in mind. [RICO stands for “Racketeer Influenced and Corrupt Organizations Act”. Copyright infringement has long been one of the RICO “predicates”.]
By Chris Castle
“[Government] interference is but the first link of a long chain of repetitions, every subsequent interference being naturally produced by the effects of the preceding.”
James Madison, The Federalist Papers No. 44
There is a bill in Congress backed by the mega lobbying juggernaut called the MIC Coalition that would force songwriters and artists to “register” with the government in order to protect their rights from the biggest corporations in the world. Failing to do so would take away the stick of statutory damages and an award of attorneys fees to songwriters or artists who are victorious in copyright infringement litigation. Statutory damages and attorneys’ fees are the only real protection that the government gives these creators–the smallest of small businesses.
Why? Because the government does virtually nothing to protect the rights of artists. If it weren’t for statutory damages and attorneys’ fees there would be nothing between a creator and the ravages of mega-corporations. Try calling a U.S. Attorney and asking them to prosecute a massive infringer. If it hasn’t happened yet given the rampant piracy we’ve seen over the last 20 years now, it should tell you that it’s never going to happen with rich corporations that run roughshod over artist rights.
Yet songwriters in particular are some of the most highly regulated workers in America. The government forces songwriters to license their work and sets the price they can license at–yet does nothing to enforce the “compulsory licenses” it imposes on songwriters. Not only is the government in their lives at every turn, songwriters are poorly treated by their government. Why? One reason is that songwriters are among the smallest of small businesses and have little political clout.
That explains why the government imposes wage and price controls on songwriters through consent decrees and rate courts, but forgets to raise their wages for 70 years. Can you imagine how that would go down if the government tried doing the same to auto workers or even the minimum wage?
The Rate that Time Forgot
When the government enacted the Fair Labor Standards Act in 1938, the government-mandated minimum statutory rate for songs was 2¢ per copy. The hourly minimum wage was 25¢. The government didn’t get around to raising the minimum statutory rate until 1978 when they raised it to from 2¢ to 2.75¢–the hourly minimum wage had then been raised from 25¢ to $2.65. Shortly after, the government started indexing the minimum statutory rate from the rate that time forgot–had the government indexed to the rate of inflation from 1909 to 1978, the rate would have been closer to 13¢, a level it has yet to reach over 100 years after it was first set–today the rate is 9.1¢.
That’s a cruel mess.
What happens if a music user wants to avail themselves of the statutory license but simply refuses to pay the paltry royalty rate? Nothing happens. At least not unless the songwriter or their publisher sues for statutory damages and attorneys’ fees. If you’ve followed the class action cases brought by David Lowery and Melissa Ferrick against Spotify, you’ll know that these cases only involve small songwriters. Now there’s two publishers suing in Nashville–again, small publishers.
If these plaintiffs didn’t have the statutory damages and attorneys’ fees, do you think anyone in the government would care that the government’s compulsory license was being misused?
We’re From Washington and We’re Here to Help
Individual music users like Amazon, Google, Facebook and Spotify have about as much political clout as any notorious monopolists in history from Standard Oil to United Fruit. As an organized lobbying group, these companies have the political clout of Big Tobacco, Big Pharma or Big Bombs.
These companies are all part of the MIC Coalition (or are members of other lobbying groups that are). The MIC Coalition is all about this new “government list” that’s supposed to protect small business by crushing small business.
Here’s the pitch on the government database from the MIC Coalition:
The lack of an authoritative public database creates problems for venues and small businesses including restaurants, taverns, wineries, and hotels. For example, venues are declining to host live musicians rather than risk potential liability due to lack of up-to-date and actionable licensing information. The lack of a database is also a challenge for local broadcasters and digital music streaming services that rely on accurate copyright information to provide music to millions of consumers.
The assumption behind this legislation is that if the government just forced songwriters and artists to register in the government’s list, that music users would actually use that database. If there’s one common theme in the recent lawsuits against digital services it is that the services don’t seem to use the available data–except to file millions of mass statutory licenses using a loophole in the Copyright Act claiming the users can’t find the copyright owner of the songs they use in the current Copyright Office records and seeking the government’s cover from lawsuits as if they were legitimate users.
If they put the same effort into finding the songwriters that they do into filing millions of mass NOIs, these services might not have so many problems. And instead of removing the loophole, the government now floats this “government list” database idea to create an even more complicated loophole at taxpayer expense.
Reject the 11th Century Solution to a 21st Century Problem
It’s important to realize two key causes for the licensing mess the government has created through over-regulating songwriters, one of which is not entirely the government’s fault.
The Government Should Allow Statutory Licensing by ASCAP and BMI: Because the government imposes a near-compulsory license through consent decrees against songwriters who are members of the two largest performing rights societies (ASCAP and BMI), a perfect opportunity to streamline the compulsory license is simply lost. ASCAP and BMI are prohibited from engaging in compulsory licensing. If these PROs were allowed to issue licenses for all the rights digital services need, that would be a meaningful step forward.
This would make ASCAP and BMI similar to SESAC which can issue both performance rights licenses and mechanical licenses after SESAC’s acquisition of the Harry Fox Agency. SESAC is not subject to a consent decree. The MIC Coalition didn’t like that either and complained to the Department of Justice seeking an investigation into stopping an idea that could work.
Require Music Users to Search the PRO Databases for Song Ownership before Serving Address Unknown Mass NOIs at Taxpayer Expense: There is nothing in the “government list” bill that actually requires music users to search or document that they have searched this new database. Current law requires a search of at least the Copyright Office records (which Amazon, Google, Pandora, Spotify, Microsoft, iHeart and others are supposedly doing already by the millions) and in some circumstances permits a search of the performing rights society databases as well (see 37 CFR Sec. 201.10 h/t Richard Perna).
It is a short leap to require music users to search the publicly available databases of ASCAP and BMI as well as the public records of the Copyright Office before serving millions of address unknown NOIs on the Copyright Office. This will be particularly relevant given the recently announced voluntary cooperative effort between ASCAP and BMI to combine their repertory databases (which could include other PROs). While there is some complaining from MIC Coalition members that ASCAP and BMI won’t indemnify users of their databases for the accuracy of the data.
That simply isn’t true for parties to the ASCAP and BMI licenses, which after all is why the databases are created in the first place. Since ASCAP and BMI have no idea what use anyone may make of the data and if that use is even authorized by the song or recording owners, how could they possibly be expected to indemnify all users for any use in any country of any song? Those databases are not a search engine. Nobody else does that, especially not search engines, e.g., Google’s disclaimer:
Our Warranties and Disclaimers
We provide our Services using a commercially reasonable level of skill and care and we hope that you will enjoy using them. But there are certain things that we don’t promise about our Services.
OTHER THAN AS EXPRESSLY SET OUT IN THESE TERMS OR ADDITIONAL TERMS, NEITHER GOOGLE NOR ITS SUPPLIERS OR DISTRIBUTORS MAKE ANY SPECIFIC PROMISES ABOUT THE SERVICES. FOR EXAMPLE, WE DON’T MAKE ANY COMMITMENTS ABOUT THE CONTENT WITHIN THE SERVICES, THE SPECIFIC FUNCTIONS OF THE SERVICES, OR THEIR RELIABILITY, AVAILABILITY, OR ABILITY TO MEET YOUR NEEDS. WE PROVIDE THE SERVICES “AS IS”.
SOME JURISDICTIONS PROVIDE FOR CERTAIN WARRANTIES, LIKE THE IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. TO THE EXTENT PERMITTED BY LAW, WE EXCLUDE ALL WARRANTIES.
If the government wants to tinker with the Rube Goldberg system of music licensing that it has imposed on songwriters, it could start by making these two changes before imposing a 21st Century version of William the Conqueror’s Domesday Book, the Great Survey of England conducted in 1088.
Oh, and if they’re so fired up about forcing people to do things through regulation, why not force music users to license, pay and account in compliance with the law.
[Editor Charlie sez: Another good reason to link to local retailers for vinyl and CDs and not to a data lord.]
Two Consumer Watchdog reports show that Amazon is deceiving its customers by putting fake crossed-out prices next to its products. It’s a deceptive marketing ploy meant to trick consumers into thinking they are getting a deal for the products they are purchasing when they are not.