How To Destroy Innovation And Competition: Putting SHOP SAFE Act Into Innovation And Competition Act
from the it's-the-opposite-of-what-it-says-on-the-tin dept
Last fall, we had three separate articles about the horrific problems of the SHOP SAFE Act -- one by me, one by Cathy Gellis, and a massive one by Prof. Eric Goldman. The bill is extraordinarily bad, but it's extraordinarily bad in a somewhat sneaky manner, which we'll get to in a moment.
Unfortunately, we're hearing buzz from DC that the House is thinking about shoving the SHOP SAFE Act into the massive < United States Innovation and Competition Act, also known as the Endless Frontier Act. The Endless Frontier Act/USICA has a bold and valuable goal: having the US invest in innovation, science, and technology infrastructure. This is, actually, really important, and it's an area where the US has led in the past and has not been doing as much leading recently.
The general structure of the bill is pretty smart, and really is focused on filling important gaps that can lead to much greater innovation and commercialization of important innovations. But, with such a large bill, some are always going to see opportunities to bolt on their own pet ideas -- both good and bad. And SHOP SAFE seems to be one of the potentially dangerous ideas being considered.
Again, I recommend reading Eric Goldman's thorough takedown of the bill, but I wanted to give a brief description of why it's so dangerous, and why it requires understanding a few different things that most people will miss. The bill is framed as a way to protect people against counterfeit goods online. And that sounds like a good thing. But there are a few major problems: first, is that the "threat" of counterfeit goods online is way, way, way overblown. Second, is the method by which this tries to attack that "problem." And third is the wider impact that this law would then have on the internet. It's important to understand all three of these things, so let's break them down bit by bit.
The problem is massively exaggerated:
First up, while big brand companies like to insist that counterfeiting is a huge problem -- and one that puts people at risk -- there is little evidence to support this. While it's hidden away and rarely talked about, when the Department of Homeland Security put out data on counterfeits, it could find very, very few that actually impacted health and safety. That's not to say the number is zero, but the entire industry loves to insist that because there have been a very small number of dangerous counterfeit products out there, they can state that all counterfeiting is a health and safety issue (it gets even worse when the copyright industries like to lump "counterfeit" together with "copyright infringement" to pretend that little Bobby downloading a song is a health and safety risk).
Even outside of the question of "safety," the simple fact is that counterfeiting is not nearly as big a problem as the industry would have you believe. A GAO report noted that the industry has massively exaggerated the amount of counterfeiting that happens. Even then, in the situations where it does happen, there's a question of the supposed "harm" to the original producer. The general argument is that counterfeiting harms the originator's brand by (1) tricking consumers into purchasing a non-authentic version when they would have spent money on the real version and (2) then delivering an inferior knock-off product that harms the brand, as the buyer is less-than-impressed by the quality of the knockoff.
Again, however, actual evidence suggests that this narrative is rarely true. Instead, multiple studies have shown that buyers of counterfeit goods buy them as an aspirational purchase. That is, they know that they're buying knockoffs, but they buy it because of that fact. They can't afford the authentic version, so couldn't buy it at that moment (so no loss), and are buying it because they still want to connect with the brand. Indeed, that study showed that many people who buy knockoffs later buy the real thing when they can afford it. In other words, hurting the counterfeit market could actually harm the authentic market as well, as it is often a "stepping stone" purchase, allowing users to connect with the brand before they can purchase the real thing.
So, already, we've seen that the underlying "necessity" for a bill to attack the sales of knockoffs online is thin, at best.
The method by which SHOP SAFE works will do tremendous damage to online marketplaces and innovation:
To understand this one requires a bit of background knowledge. As you may know, Section 230 has an intellectual property exemption (section (e)(2)), which was put there at the demand of Hollywood, so that it could put in place its own, much more stringent, DMCA takedown process. Indeed, in 1996, when Section 230 became law, Hollywood was in the midst of a bit of policy laundering. The Clinton's IP czar, Bruce Lehman, had a plan all along to force the terrible DMCA regime on the US. In the summer of 1995, he published a whitepaper with the outline of a DMCA liability regime, encouraging Congress to pass a law. Congress did introduce a law, but failed to pass it. He later flat out admit that he did an "end run around Congress" by going to Geneva in early 1996 to get WIPO to put together a treaty that more or less required all signatories to implement a DMCA-like structure. That done, he then went back to Congress, and told them it was now obligated to pass the DMCA to comply with "international obligations."
So that process was happening just as the CDA was being crafted, and someone realized that 230 would undermine Lehman's DMCA plans if it applied to copyright. So (e)(2) was added to exempt "intellectual property." But no one really considered how that might impact other types of intellectual property, such as trademark. As we've discussed, this has lead to much mischief from companies (and mainly law firms) which look to hold third party marketplaces liable for counterfeit or trademark infringing goods on their sites. Sometimes, they've even sought to go after retailers for people reselling legitimate items they've bought, because the companies think they should be able to control every possible sale, including resales.
The biggest, and most important, case regarding this was one that the jeweler Tiffany filed against eBay in 2004, claiming that because users on eBay sold some infringing items, eBay should be held liable. Again, without Section 230, eBay couldn't just get the case immediately dismissed. Instead, it went on for over six years before the judicial system established a precedent protecting online marketplaces. It's not as strong as Section 230, but it more or less says that because eBay tries to remove infringing products, and has an active program in which it works with brands to find and remove infringing/counterfeit works, you can't hold the company liable for missing some stuff. That ruling has been in place for over a decade now, and has served the internet well. It's kind of like a Section 230 protection that can apply to marketplaces with regards to trademark (though it's not as clean or clear as 230).
But the big product companies have always hated it, because they want to control everything. They want to force all unauthorized sales (including resales of authentic products) off of these marketplaces. And, if they can't do that, they want the giant marketplaces -- the Amazons and eBays of the world -- to just pay them many, many millions of dollars.
So that brings us back around to the problems of SHOP SAFE. It flat out overturns the Tiffany/eBay decision, and says that unlike that precedent, online marketplaces should be considered de facto liable. There is a long, extremely onerous, and nearly impossible list of things that you need to do to get out of that default state of being liable for any infringing product on your site. Basically, the default state for all online marketplaces (and this is defined so broadly that it will sweep up tons of sites you wouldn't think of as "marketplaces"), will be that they are "contributory" infringers.
This will wreak all sorts of havoc. First off, it will massively limit where people can buy and sell things online. Over the pandemic, I've become active in buying and selling used books via a couple of Facebook groups and independent forums and news groups, that focus on the buying and selling of a niche category of books. It's been great for me, because most of the books bought and sold through these groups are unfindable anywhere else. Under this bill, it seems like those groups would all need to shut down -- or face absolutely crippling liability and risk.
Basically, the only "marketplaces" that could possibly survive would be the very biggest -- the eBays and Amazons of the world. And, even then, in order to avoid liability, eBay and Amazon would both significantly change how those forums operate, and they'd still face crippling liability because of the structure of the bill. I'll quote Eric Goldman's summary here because it's so important:
First, it creates a new statutory contributory trademark infringement claim for selling the regulated items. Second, the bill says that the new contributory claim doesn’t preempt other plaintiff claims, so trademark owners will still bring the standard statutory direct trademark infringement claim and common law contributory trademark claims (and dilution, false designation of origin, etc.). Third, online marketplaces nominally can try to “earn” a safe harbor from the new statutory contributory liability claim (but not from the other legal claims) by jumping through an onerous gauntlet of responsibilities. Those requirements will impose huge compliance costs, but those investments won’t prevent online marketplaces from being dragged into extraordinarily expensive and high-stakes litigation over eligibility for this defense. Fourth, the law imposes a proactive screening obligation, something that Tiffany v. eBay rejected. Fifth, unlike Tiffany v. eBay, generalized knowledge can create liability, and takedown notices aren’t required as a prerequisite to liability. Sixth, in litigation over direct trademark infringement and common law contributory trademark infringement claims, trademark owners can cite compliance/non-compliance with the defense factors against the online marketplace, putting the online marketplace in a worse legal position than they currently are in.
Every single one of those things is problematic -- and will massively diminish the ability of anyone to buy and sell things online, vastly cut back on the availability of online marketplaces, and just change the very nature of what can and can't be sold online. And that's not even getting into how much time, money and attention will be wasted on nonsense litigation enabled by this law.
The wider impact this law has on the internet will be massive.
Remember Bruce Lehman who was mentioned above? After pulling his little trick to "route around" a Congress that wouldn't pass his law, he later became disillusioned with his own creation. It wasn't that he recognized the myriad problems and censorship he enabled with the DMCA. He just felt that it didn't go far enough. Over the last decade, Hollywood has been pushing for a new DMCA that will put significantly more liability on websites -- including pretty much all of the stuff that we listed above about SHOP SAFE and liability around trademark: default contributory liability, expensive litigation to see if you're even liable, no notice requirements, pro-active filtering requirements, etc.
So it's no surprise at all that the whisper we're hearing is that some in Congress see SHOP SAFE not just as a tool for dealing with trademark and online marketplaces, but as a model for a new DMCA. That is, once this kind of "assume liability and litigate your way out of it" setup is "proven" under SHOP SAFE, the idea is to then rewrite the DMCA under the same basic terms.
None of this will result in any more "innovation and competition." None of this will help the internet, or help the US keep up with tech advances around the globe -- which is supposedly the point of this Endless Frontiers / USICA in the first place. It will do the opposite. It will be attempting to "deal with" a problem that is barely an actual problem by effectively re-architecting how liability works. And SHOP SAFE will be a simple kind of trial balloon for an even bigger attack on the open internet.
There's simply no reason for Congress to move forward with such a massively dangerous bill, and even less of a reason to include it in a bill that is supposed to be about innovation and competition.
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Filed Under: copyright, counterfeit, dmca, endless frontiers, infrastructure, innovation, innovation and competition act, intermediary liability, marketplaces, section 230, shop safe, trademark
Companies: amazon, ebay
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dont even have to do that! just leave things in the hands of the corrupted, bribed politicians! they'll manage to fuck things up good and proper on their own!!
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So, it's like stepping on the gas and brake pedals at the same time while the parking brake is engaged. Hamsters on a wheel make more progress.
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This is a tough one for me. Make sure that the likes of Amazon ensures that the products that it sells isn’t fake doesn’t sound too bad. Back when I used Amazon a lot, I definitely got some toothbrush heads, batteries, etc that were fake. I later heard that “Fulfilled by Amazon” means that the same product from different sellers just goes into the same bin so even if you order from a legit seller you still may not get the real product.
To me there is a big difference between eBay, still being a simpler seller to buyer marketplace and Amazon, which receives the product in, stores the product until it is sold, then packs the product and ships the product in an Amazon box in an Amazon van. I can imagine the (deserved) scandal if CVS was selling knockoff cosmetics, why should Amazon get a free pass?
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There are other ways to deal with that problem that don't involve destroying large parts of how the internet works.
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Welp, I guess I should say goodbye to every single website in the planet I guess😔
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If Amazon and Ebay are made liable for all products, they will be highly selective about who they allow to sell, and what products they sell, with consequent limitation of the range of products available, and higher prices to pay for all the vetting of products they will be required to carry out.
Unless a huge effort is pit into customs checking, or the US simply closes its borders to personally imported goods, such a law will hand the online markets to the Chinese.
The end result of laws like this is that you will be forced back into real world shopping, as most chains will give up any online store, being caught by the same requirements,
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Only the 0.1% are allowed to sell to the US Markets, it the only way to make America great again, and increase their wealth.
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I'd love to hear your thoughts on the other ways of dealing with it. I have thought about it but can't really come up with anything that I think would really work but here are a few ideas:
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Trrademark holders' dream: make everyone liable for everything, then push them into expensive litigation over any accusation - event the most groundless ones. Basically, it's the exact opposite of section 230: create a presumption of guilt, burden platforms with heavy requirements (that barely do anything to protect them) and deny them any way to toss out the case early.
Making anything on the internet a liability is obviously not how you promote innovation, but stating the obvious isn't enough to fight bribery... sorry, "speech" from large corporate donors.
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Re: It's a big planet
Since this is a US law that only applies to the USA and since 96% of the planet is NOT the USA, then no... We don't even have Amazon or Ebay here in Africa! We're the second largest continent with almost a billion people and we have our own e-commerce websites thank you very much! This law won't affect us in the slightest, since the USA is not the world!
We buy most of our goods from from Chinese websites anyway.
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What you are proposing is a world with no etsy, Ebay, Craigs list, etc, along with print on demand books, T shirts mus etc, or artists and crafts people selling their works directly. Regulation as proposed would ensure that the individual could not use the Internet to make any money by any means. I suspect it would also mean no KiskStarter.
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"Something like a DMCA takedown except reported by customers and it is very easy/obvious to report (obviously need to figure out how to handle the potential problems with that that we see with the DMCA kind!)."
How bout we figure out how to fix the current problems with the DMCA before we start exporting it to the sale of physical goods?
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This doesn’t make sense politically
Question: Imagine a scenario where the House does manage to jam SHOP SAFE Act into the Innovative and Competitive Act, wouldn’t that mean that the Senate would have to vote for that version of the ICA? Wouldn’t that cause some Senators (like Ron Wyden) to turn on the ICA?
It is astonishing that certain House members are considering how incorporating SHOP SAFE into something so essential as the ICA. It’s not just Anti-Competive and Anti-Innovative, it’s also deeply Anti-Economic.
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Why would it shut down Etsy?
Anyone can sell anything, a buyer buys something that is counterfeit, notifies Etsy, it either goest to Etsy or some other third-party verifier (perhaps paid for by the industry in general rather than the individual retailer so those that can afford to pay more like Amazon do) and, if counterfeit, it gets taken down and the seller gets a strike against them.
You'll notice I didn't propose suing or fining anyone (the problem is the seller and perhaps they can get sued at some point after some amount of verified takedowns).
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Re: This doesn’t make sense politically
I’m confused
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Re: Re: This doesn’t make sense politically
Let me rephrase that.
In a scenario where the House does manage to put SHOP Safe Act and votes on a version of the Endless Frontier Act that includes that, wouldn’t the senate have to vote for that version of the EFA?
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I’m mentioning this because the EFA already passed through the senate before Shop Safe is being considered. 68-32. Congress is obligated to debate laws and versions introduced by House and Senate. I’m just mentioning a what-if scenario.
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Anybody who is disappointed by a purchase could, and many would abuse the system,
Notice and take down will always be abused and abusable because the recipient of the notice does not have the knowledge to decide other than the most blatant abuse cases. Further, unless an automated system deals with the bulk of the notices, and such a system cannot be open for public use, the cost of simply identifying and taking down a listing is more than any company could afford because of the number of people needed to enter the notices received.
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Should I panic yet or is it a little too early?
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Re: This doesn’t make sense politically
You're assuming Wyden would vote against it. Certain congressassholes like tillis do this sneak unpopular shit into must pass shit all the tine,Wyden won't vote against it.
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"Endless Frontier Act/USICA has a bold and valuable goal: having the US invest in innovation, science, and technology infrastructure."
Can I stop laughing now?
USA= 5 guys make a corp, design/prototype something, send it to china, Acknowledge its Correct, Order 10,000 and distribute them at 100 times the price, then Order more if it sells. Also taking 1 things and making a Different box(DVD players) with the same internals, is so common for USA corps using a Subsidiary.
"counterfeit products "
How many Poor persons(those earning under $50k per year) would pay a few $100, for that Bag a Rich person paid $1000? Doent this show a marketing problem or that the $1000 Bag company, over changes cause they sell only a few?
Does a poor person Understand they are NOT buying an Original, from a fancy company? YEP! Does that Rich person paying Over $1000 understand they are over paying for goods, MOSTLY not made in the USA.
How can we have counterfeit, on a product Not made in the USA? There are a few things Really made in the USA, but most are not Exactly whats wanted, minor changes the companies Want, arnt there, but Any sort of the item is restricted. And the restricted list is 3 different sections of the import regs and if you dont look up all 3 sections, its going to cost more money.
Really sounds like the laws/regs for the RIAA and MPAA, are being pushed to the furthest extent for Everything.
The THOUGHT, that only WE can make the best/anything, is Stupid. Its going to get to a point that 1 little change makes a NEW one, so that Buying up all the rights will be worth a fortune, rather then REALLY making something.
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'And the money goes to Amazon and no-one else.'
They're just trying to make the core bill more effective, it's a lot easier to invest into an industry when you've just gutted the number of companies in it, makes for a whole lot less details to work out.
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Thanks for the feedback. It obviously is barely a seed of an idea that likely isn’t viable for 100 different reasons but I’d like other potential solutions that our side would be happy with rather than just saying “NO NO NO”.
Unlike most people here, I don’t have a problem if Gucci make a $10,000 bag and don’t want counterfeiters selling copies of it for $500. I think there is a reasonable middle ground between the “Do Nothing, everything is fine the way it is and if you touch it the internet as we know it will be burnt to the ground” side and that bill.
Adding to the idea, companies that want to be added to the Counterfeit Detection Office could register their products and explain how to detect them and then have an industry body to figure it out. How/why/when products get sent to it could be figured out (maybe after X number of people report it or whatever.
It’s not about shutting down companies but it is about removing counterfeits form the online marketplace in a reasonable measured reliable way without attacking the marketplaces themselves.
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Re: This doesn’t make sense politically
Possibly, but the previous version passed the Senate 68-32, so you'd need 18 Senators to object to the reconciled version over this.
Considering that expansion of IP protections maintains strong bipartisan support, it seems unlikely to be politically problematic.
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And just like Contentid, you have designed a system that allows large companies to bully the individual where there is a whiff of similarity, especially as they will make the detection description as wide as is possible. Also, just like ContentID and the DMCA, the individual will be extremely lucky if they can get a bad decision looked at.
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Re: Re: Re: Re: Re: Re: Re:
We can take the learnings out of what happened with the DMCA and the private technologies that were built from that like ContentID to build something fairer that takes into account all of the stakeholders.
Is there a difference between a company being “inspired” by a Gucci bag, a company that makes a complete copy of the bag and sticks a Gucci logo on it and sells it for 5% off the price or a company making toothbrush heads and sticking an Oral-B logo on them abs selling for basically the same amount as the real thing and should they be handled the same way?
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Content ID is so problematical because it lacks context, only allows corporations to register works. Further it creates more disputable result than any appeals system can handle. because not enough people with the required knowledge are available to deal with appeals. Also note, that no single person can hold the knowledge of products needed to settle appeals, and unless there is a full and maintained database of products, there is now way of determining which is the original and which the copy.
Building such a database is not really practical, when individuals can make and want to register designs, and where similarity does not imply any form of copying.
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Re: Re: Re: Re: Re: Re:
Ignoring the very real issues that have dogged the DMCA and ContentID systems is not going to magically make them go away. Neither will ignoring the very real consequences that have resulted from larger corporations and entities using them to bully end users into compliance.
How do you propose smaller websites will enforce this "middle ground", and absorb the costs of implementing these systems? Simply claiming a "middle ground" and expecting sites to work towards this vague, lofty ideal, because you hope it exists, isn't helpful. Especially when the plaintiffs on the copyright side often make it clear that they're not going to contribute beyond ideation that "something must be done".
And let's say that smaller companies do end up implementing such systems, assuming they had the resources to put up with the significant expense required. What happens when cases still slip through the cracks? The RIAA already got their "notice and takedown" systems. That hasn't satisfied them. They want "notice and staydown" systems. They want systems that preemptively prevent copyright infringement. They want systems that make it inherently harder and more cumbersome to appeal notices. Based on the behavior of other copyright holders, a similar system for physical items isn't going to have much better results.
You seem to think that we're at a crossroads between "Do nothing" and "push the strict bill". Here's the thing: we're not at the "Do nothing" stage. Corporations already have recourse to pursue legal options over counterfeiting. This idea that we're in a lawless Wild West situation right now doesn't pass muster.
You assume that companies are keen to let other people in on their trade secret methods on how to detect counterfeits. There's a reason why we still don't have any concrete insight to how antipiracy enforcement companies harvest their IP addresses and decide who to sue based on guilt. I mean, we have some idea, but their methods have never been scrutinized because they run like hell whenever a judge finds their methods suspicious, and they end up free to judge-shop until someone is dumb enough to be fooled.
Bottom line: copyright companies have a history of overstepping and screaming "good faith!" as a perpetual defense for everything they do. Just like the people who claimed upload filters weren't needed to enforce Article 13 and 17, then privately admitted that they were needed after all once those laws got approved. They've proven they can't be trusted with power, or promises to behave in a "reasonable measured reliable way".
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Two points:
1) The problems noted above about Notice and takedown can be solved, both here and in copyright law, by simply going back to what the founders wanted (and they stated so in no uncertain terms): "One is innocent until proven guilty". That concept has extended into civil law over the years, though the threshold for liability is noticeably lower. Laws like the one under discussion turn the burden of proof away from the accuser, and onto the accusee. That's just un-fucking-American. Which causes me to wonder: why do I smell the distinct odor of Republican grift in the room?
All of the above points can be solved much more easily, and less costly, if we just tell the Cartel (you know which one I'm talking about) that the law is going to be modified to read "Notice and investigate". If the investigate finds the accusee to be liable, then the damages phase begins. If it goes the other way, the penalties for a false accusation start getting toted up.
Of course, if the courts don't deny it, I foresee a cottage industry in arbitration-like investigators. But like arbitrators, they can be bought, so there's no real guarantee of fairness, each and every time. But it's better than what we have now, IMHO.
2) Can you imagine the court system becoming so overwhelmed by all the litigation that could've been prevented by simply adding a S230-style provision to the law? This alone will be worth watching closely. I suspect that the judiciary will be having a few closed-door sessions with certain members of Congress in the not-too-distant future. Something about bigger budget, more judges, more courtrooms, more support personnel, extended case time limits, you know the drill.
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How likely is the SHOP SAFE Act to be put in to the bill?
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Is that likely to happen?
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Re: Re: This doesn’t make sense politically
Its likely Wyden will try and get it out of the bill.
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Re: Re: This doesn’t make sense politically
How likely is the SHOP SAFE Act to be put in to the Endless Frontier Act? and it does not seem to have strong bipartisan support.
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No. Under this, person buys thing from Etsy, it turns out to be fake, company that makes the real thing sues Etsy out of existence regardless of what efforts they've taken.
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Re: Re: Re: Re: Re: Re: Re: Re:
What we have learned from the DMCA is that it's a horrible idea. The vast majority of DMCA notices are erroneous junk created by automated systems. It's used for censorship and economic sabotage.
To fix it: require a human being to sign every notice. If they submit a certain percentage of false claims, fine them. A certain larger percentage, throw them in jail.
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Not sure does anyone how likely is the SHOP SAFE Act to be put in to the Endless Frontier Act? is there any more info on when they may try and do this and when the bill will come up to vote in the House?
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Re: Re: Re: This doesn’t make sense politically
That’s the thing, it’s just that: rumors. Doesn’t mean that they aren’t going to try to put in the Shop Safe Act, but falling short to include it isn’t out of the realm of possibility either. The EFA isn’t a high priority right now and we don’t know when there will be a date for furthering the bill. Though the strong traction of IP reform is the only reason why it won’t be impossible.
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"Something like a DMCA takedown except reported by customers and it is very easy/obvious to report (obviously need to figure out how to handle the potential problems with that that we see with the DMCA kind!). "
No need to bring the shit-show which is the DMCA into it. The last thing we need is more examples of reversing burden of proof.
As far as I can tell sensible consumer protection laws if enforced, should neatly deal with most of these problems. Amazon's marketplace isn't a social platform. If it mediates money and goods then commercial restrictions and regulations should apply.
Of course that's all just assuming the US has any functional consumer protection laws left. My magic eight ball says that signs point to negative in that regard.
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"The end result of laws like this is that you will be forced back into real world shopping, as most chains will give up any online store, being caught by the same requirements."
Not quite. The end result is that US companies are gradually forced to withdraw from the global market as a result of such legislation. Leaving Alibaba to step in as the logical replacement.
The US can get to Amazon as they are HQ'd in the US, but where online retail headquartered outside of the US is concerned there are issues of practical enforcement cropping up.
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"Trrademark holders' dream: make everyone liable for everything, then push them into expensive litigation over any accusation - event the most groundless ones."
At the cost, of course, of rendering core segments of the national industry uncompetitive. It's a classic case of strip-mining the business future of the nation you live in.
The fact the US is dropping to near-peer status with China isn't just because China's played their cards right. A lot of it has to do with the US increasingly letting their own major players own markets through protectionist legislation rather than competitiveness.
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"I think there is a reasonable middle ground between the “Do Nothing, everything is fine the way it is and if you touch it the internet as we know it will be burnt to the ground” side and that bill."
There really isn't. People just keep looking at a reality which literally has no middle ground and keep saying "Nerd harder". That won't work.
Either you have a globalized community and a communications medium which works across it...or you have a version of the chinese firewall. It's the literal analogy of you demanding there must be a way for a woman to be "just a bit" pregnant.
The problem with catching the counterfeiter selling the 500$ bag is that in order to find the bags which are counterfeit you need to monitor every transaction involving handbags which means monitoring all of online retail. Bringing us to the proposed legislation. It places the same burden on webpage operators as it would on a mall owner suddenly being told he'll personally be responsible for every unlawful act happening in his mall.
In short, this legislation calls on enforcement mechanisms not seen even in the worst old soviet satellite states to be effective.
"It’s not about shutting down companies but it is about removing counterfeits form the online marketplace in a reasonable measured reliable way without attacking the marketplaces themselves."
And that's not happening. This shit has been tried for a few thousand years and the only way it was ever settled turned out to be by shutting the borders and make sure nothing crossed them from the country manufacturing the knockoffs.
I.e. you can do this. But it'll mean the US exiting the global marketplace. Because few companies with a US HQ can afford the burden of surveillance required.
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The US has the nasty habit of exporting the worst of their laws world wide, just look at the copyright laws that they have pushed onto other countries. Also their hands are far from clean over the copyright laws of the EU, which they are trying to bring to the US.
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The good old daze
Rant warning
Sorry guys, but the web has to go - at least in its present configuration.
Something more akin to TV is the end-goal here. A nice walled garden, where nobody in power need fear disclosure of their crimes by the general public.
Time and time again, the web has been shown to be a means to thwart suppression and expose crimes perpetrated by law enforcement personnel, government, and big business. 'This must stop'. is their mantra.
None of these new laws you're reporting on are a mistake. They are blatant attempts to thwart justice and return the world to public blindness, so the criminals in office and in business can get back to business as usual.
These attempts will only escalate until the web is no longer a place for the public to communicate freely and instead, becomes another venue for profiteering, propaganda and misdirection by police, government and big business.
When criminals write the laws, only criminals are protected by law. The public becomes the Adversary. Remove the web and you remove their only weapon against legalized tyranny.
But you already knew all of that, didn't you.
Intentional ignorance is such bliss.
Until it's not. :)
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"Why would it shut down Etsy?"
Why would it not? I'll make it easy for you - if you think you've come up with a solution that only affects Amazon and/or whatever major target you've imagined and does not place greater hardship on smaller players, you've either come up with a solution that's so narrowly targeted that it's easy for your intended targets to route around with a small amount of restructuring. Or, more likely, you really need to re-read your proposal to locate the unintended consequences.
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"I think there is a reasonable middle ground between the “Do Nothing, everything is fine the way it is and if you touch it the internet as we know it will be burnt to the ground” side "
Maybe there is. But, I don't see anyone literally saying "do nothing", and the rest of us have eyes to see the natural consequences of what's actually being proposed.
"It’s not about shutting down companies"
Maybe not, but that is what will happen whether you intend it to or not.
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"The end result of laws like this is that you will be forced back into real world shopping"
Hey, 2004 called, they want to help you close that barn door. Just ignore the distant sound of galloping.
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"Maybe there is. But, I don't see anyone literally saying "do nothing", and the rest of us have eyes to see the natural consequences of what's actually being proposed."
No, by now there isn't. Legislation you can use to deal with counterfeiting without causing fairly serious collateral damage has already been long passed - with great bipartisan support, at that. Hell, even legislation causing great inconvenience and middling harm has been passed long ago. We're at the point where further proposed "cure" has far better odds of killing the patient than the illness has.
If this metaphor was about controlling speeding vehicles we would have already implemented traffic signals, random radar traps and cameras, cruise control, GPS-mediated warnings when speed limits were exceeded...and a whole lot of cops on traffic duty monitoring almost every road.
This legislation is the equivalent of demanding every driver wears a tracker and logs their driving habits every time they enter a vehicle. On their own expense. Major trucking companies would have problems with this but will be able to manage. Individual drivers and small moving companies will be dead in the market.
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"The US has the nasty habit of exporting the worst of their laws world wide, just look at the copyright laws that they have pushed onto other countries."
That is correct. This time around, though, they're messing with a different playing field; China. Not a bunch of brawling EU member states or similar markets.
And the difference becomes obvious when you look at the chinese emergence into the global market and their internal one. They've very gradually invited foreign companies, built their own replacements for such, and then driven every foreign company out of China as soon as their own became able to cover the internal market. This is the most clear when it comes to online services; WeChat, Baidu, MaiMai, Weibo replacing Twitter, Google, LinkedIn and Facebook. But I have no doubt they operate in similar fashion for every market need. As they have with Alibaba instead of Amazon, for instance.
If the US tries to hardball the EU then Germany and France may object but generally speaking no european nation is self-sufficient. Nor most other countries. We're not big enough and don't have all the relevant raw material resources and logistics at hand to cater to the needs of our consumer sector. So when Uncle Sam says "Fall in Line" we usually do.
China just isn't as vulnerable that way. They've got more territory and a bigger market than the US and europe combined. Full self-sufficiency isn't hard to aim for. Global markets are a nice to have, not a need to have for China.
And more than half the manufacturing of the world already takes place there. So this time around if Uncle Sam tries to tell China to fall in line they'll say no. And if he tries to hardball at that point we find out that although severing ties with US business would be tough for other markets, severing ties with the supply chain of everything is even more unacceptable.
In the short run legislation in the OP benefits the most massive of US actors at the expense of raising the entry bar for smaller companies significantly. In the long run it means the US as a whole is no longer globally competitive in that sector of the market. But that's all right. His friendly beariness, Emperor Xi, will gladly fill that void.
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Such a law would make even an online supermarket store risky, as it could be targeted as part of any trademark dispute if they sell the affected products. The supermarket does not need to make or brand the product, just sell a product where other parties are in dispute about a trademark over, and prepared to use all means to stop the sale of the product that offends them.
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"We can take the learnings out of what happened with the DMCA and the private technologies that were built from that like ContentID to build something fairer that takes into account all of the stakeholders."
We really can't. And the reason for that is because the fundamental issue with the DMCA is that in practical terms it reverses burden of proof. Take that away and the DMCA becomes a paper construct without enforcement ability.
This is where you should spot a significant problem - of "borrowing" a methodology which in principle turns law from "innocent until proven guilty" into "presumed guilt upon accusation".
No, the thing is that we can have either an open marketplace which operates without sellers and buyers having to put up with incredible cost of verifications - or we can begin choking the marketplace completely until only major actors with the legal muscle to defend themselves can exist.
And as is we've already tried everything else and are beginning to slide into the paradigm where small enterprise can't exist anymore because the burdens of legal threat become too large for anyone without a full legal department to shoulder.
This is how you kill an entire industry with Red Flag Acts.
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[Addendum]
How the heck did I manage to drop the reply to the wrong comment?
Sorry, PaulIT, meant to drop this to one tier above.
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