RIAA Lobbyists Turn Anti-Pandora Desperation Level Up To 11

from the are-they-serious? dept

We've written a few times about MusicFirst, a front group set up by the RIAA (potentially illegally), pretending to lobby for "artists'" interests, but which is entirely about pushing the agenda of the RIAA in increasing royalties. It was originally set up to target terrestrial radio rates, but has had a real hard on for Pandora lately. In April, we wrote about the group's nutty argument that Pandora was deliberately not selling ads to avoid profitability. They honestly claimed that all Pandora had to do was sell additional ads and profitability would be no problem -- leaving out the simple fact that, if Pandora could sell more ads, it would. The ad business is a terrible business, and it's not easy to sell into it. Yet, these lobbyists pretend anyone can just snap their fingers and the ad dollars come rolling in. More recently, they argued that Pandora's attempt to seek the same internet streaming rates that other companies get was "a sick joke." Again, they weren't seeking lower rates as others -- but rather the exact same rates that competitors like iHeartRadio had. And they were told it was a sick joke?

The latest is really just blatant stupidity. MusicFirst commissioned a study from Jeffrey Eisenach, and apparently they gave him the instructions to do anything possible to make Pandora's rates look "low," because the results of the study don't even pass the most basic laugh test. I honestly, expected some reasonable argument, but got the following:

Other Retailers Pay as Much or More Than Pandora: Measured as a proportion of revenues, several major "online" retailers, including 1-800 Flowers, Netflix, and Overstock.com, and "brick-and-mortar" retailers, like Best Buy and WalMart, pay about as much as or more than Pandora for the products they purchase from others and resell to consumers.

Yes, you read that right. They're comparing Pandora to retailers, rather than other streaming sites. But, Pandora is not a retailer like 1-800 Flowers. I mean, you have to be scraping the absolute bottom of the barrel to try to prove your point when the best you can come up with is this totally different and unrelated business of reselling flowers pays a higher rate to its wholesale providers than a streaming radio station pays for licensing its songs. That's not even comparing apples to oranges, because at least both of those are fruit. Even apples to orangutans would be comparing two living things. This is comparing apples to ornamental knickknacks.

Two of Pandora's Major Online Music Competitors Pay More: "Pandora has made much of the high proportion of revenues it pays out in royalties, but there is nothing surprising or uneconomic about a retailer passing through a high proportion of its gross revenues to the ultimate producers of the products it sells – indeed, at least two of Pandora's major competitors, Spotify and iTunes, pay out higher proportions of their revenues (70 percent) in royalties than does Pandora."

Of course, once again, iTunes is not a competitor (well, other than the streaming service they just launched, but that's not what's being discussed here). But, of course, iTunes uses music as an enticement to get people to buy iPhones, not to make money directly off of music. And, using Spotify as an example here actually cuts against their argument, since the rates Spotify pays are insanely high as well, took over two years to negotiate, and yet some musicians are still whining that it's not enough.

Pandora Has Realized Hundreds of Millions in Profits for Investors: "Pandora's initial investors, including venture capital firms and Pandora's executives, have already realized hundreds of millions of dollars in profits since the company's 2011 Initial Public Offering." In addition, "Company founder Tim Westergren sold shares totaling nearly $15 million between January 2012 and June 2013"

Um, then why didn't the RIAA invest? This argument gets thrown out sometimes by people who don't understand the difference between revenue and equity. Capital gains from investment -- especially for startups -- is entirely different from revenue, yet people who don't understand the difference between income and equity like to compare the two as if it means something. It doesn't. It just makes them look ignorant. You get capital gains from taking an investment risk (many of which don't pan out) and it is not related directly to revenue. The fact that someone who put in a lot of equity is able to capitalize on that is very different from arguing that a business is profitable. If you don't understand the difference between equity and revenue, you really shouldn't comment on it, and it's pretty sad to put it in an official "study" as it just seems to scream ignorance about how these things work.

Basically, there's no "there" in the study. The best they can do is pretend that Pandora is in a totally different business to attack it. It kind of shows just how desperate the RIAA is getting.

Filed Under: jeffrey eisenach, licensing, lobbyists, royalties
Companies: musicfirst, pandora, riaa

Legacy Recording Industry Claims Pandora Is Playing A 'Sick Joke' In Seeking The Same Rates Others Pay

from the really-now? dept

The ability of the record labels and RIAA front groups to flat out lie about the internet is really quite incredible. There's been some buzz recently about the crazy fact that Pandora just bought a small terrestrial radio station in South Dakota. Now, you might wonder, why would an innovative company that basically seems to be focused on making terrestrial radio stations obsolete need to own such a station... and Pandora is rather upfront in its answer: because the music collections societies, like ASCAP and BMI discriminate against internet companies, in direct violation of an antitrust agreement that ASCAP signed. Furthermore, ASCAP not only won't offer Pandora the same rights, but it engaged in highly questionable negotiation practices, such as refusing to tell Pandora what songs it was pulling the rights to, such that Pandora risked huge statutory awards for copyright infringement:

During negotiations, ASCAP and the publisher increased the pressure by refusing to provide Pandora the list of tracks that were being withdrawn, exposing Pandora to copyright infringement liability of up to $150,000 per work. At Pandora’s scale, such liability would be enormous. Faced with such potential liability, Pandora negotiated an agreement that resulted in increased rates. Shortly thereafter, additional major publishers took steps to withdraw their catalogs from ASCAP, again with respect to Pandora.

ASCAP created additional ways to circumvent its antitrust consent decree. Our motion also describes how ASCAP refused to provide Pandora a license under the same terms as the iHeartRadio service, for only one reason: iHeartRadio is owned by a terrestrial broadcaster.

All of this is in direct violation of the antitrust agreement ASCAP has with the DOJ, in which it's supposed to make sure that ASCAP can't use its monopoly power over compositions to discriminate against certain players. Yet, ASCAP is clearly trying to discriminate against internet streaming services, by charging them significantly higher rates.

So, Pandora has bought the station in order to get the same rates as other streaming radio stations that are owned by terrestrial stations. As Public Knowledge points out:

This is a perfect example of the twisted incentives and strange results we get from a music licensing system that is based on who wants a license instead of just what they want to do with the music they’re using. This makes no sense. The law should treat like uses alike. Regardless of how high or low you think performance royalty rates for webcasting should ultimately be, there is no logical reason to give preferential rates to certain companies just because they arrived at the negotiation table first.

And this is only about composition rates, not even getting into the rates that Pandora has to pay for sound recordings, which is infinitely higher than terrestrial radio. Buying the radio station won't help on that front, because the internet streams are charged differently than terrestrial radio no matter who owns it, but just the fact that it's paying different rates than everyone else seems ridiculous.

And, of course, the incumbents try to twist all of this. First up, we see that BMI has sued Pandora for buying the radio station. I'm not joking. I can't see on what possible grounds a lawsuit would make sense. Are they saying it's illegal for a company to seek to get the same rates that BMI offers radio stations?

But, even worse than that is the reaction of the RIAA front group, MusicFirst, a lobbying group set up by the RIAA and SoundExchange solely for the purpose of lobbying against internet companies and seeking ever higher rates for those companies, to make sure no internet music company can stay in business. That this is short-sighted and stupid never seems to occur to MusicFirst, who is always quick with a blog post arguing that internet companies are up to no good. In this case, it accuses Pandora of playing a "sick joke" in making this purchase:

This has to be some kind of sick joke. Pandora bought an FM radio station to game the system in order to pay songwriters less?

Pandora continues to find new ways to give artists and songwriters a raw deal from the bottom of the deck. In their race to the bottom to see how little they can pay music creators, they have stooped to misleading legislation, bait and switch petitions, and now fronting as an FM radio station.

Oh really now? It's a "sick joke" to try to get the same license rate that ASCAP and BMI offer terrestrial radio stations? How so? It's a "sick joke" that the company doesn't think it's fair for ASCAP and BMI to discriminate against internet streaming radio services? The only "sick joke" is MusicFirst pretending to represent artists as it seeks to kill off new and innovative internet services that are helping artists build bigger fan bases. No wonder the RIAA-funded MusicFirst has to resort to silly claims like this. The RIAA has never wanted to adapt to an internet world, and is, once again, looking to spread completely bogus propaganda in an attempt to stifle internet progress, which tends to help independent artists, such that they don't need the RIAA labels any more. What's incredible is that the RIAA, which set up MusicFirst, has it pretend to represent the interests of "artists" when it's never been anything more than a big-label front group. If there's any "sick joke" it would be MusicFirst's pretend concern for artist's rights, that just so happen to align entirely with the interests of the big labels.

Meanwhile, David Israelite, the lobbyist for the music publishers has piled on as well, claiming that this is about Pandora "going to war with songwriters."

David Israelite, CEO of the National Music Publishers Association (NMPA), tonight interrupted his state-of-the-industry speech at the group's annual meeting in Manhattan to lash out at Pandora's decision to acquire a radio station in South Dakota. "Pandora is going to pursue lawsuits and gimmicks," Israelite told the hundreds of songwriters and composers in attendance. "Pandora is hoping to fraudulently sneak in the back door. Any shred of credibility that Pandora had is gone. They are at war with songwriters "

Once again... huh? Asking for the same rates that radio pays to stream music online is "going to war"? How does that compute? It's as if the music publishers, collection societies and the RIAA can't help but lie because they have such distaste for Pandora actually figuring out a service that people like online, when they've spent so many years trying to ensure that online services fail. If there's any "war" going on here, it's the legacy recording industry against online services that fans seem to love.

Filed Under: discrimination, licensing, lobbyists, music publishers, radio, recording industry, royalties, streaming
Companies: ascap, bmi, musicfirst, nmpa, pandora, riaa

EU Commission Sued For Refusing To Reveal Trade Agreement Documents They Shared With Lobbyists

from the right-to-know dept

A recurrent theme here on Techdirt is the lack of transparency when international agreements and treaties are being drawn up. That's increasingly recognized not just as problematic, but simply unacceptable in an age when the Internet makes it easy to provide both access to draft documents and a way for the public to offer comments on them.

Despite this growing pressure, nothing much has happened on either side of the Atlantic as far as providing greater openness for major negotiations is concerned. Perhaps frustrated by this lack of movement, the transparency organization Corporate Europe Observatory decided to take legal action against the European Commission back in February over the secret trade talks between the EU and India.

As the detailed history of this case (pdf) explains, the European Commission was apparently quite happy to pass on copies of certain documents to industry associations, but when Corporate Europe Observatory asked for the same, they only received censored versions. The lawsuit accuses the European Commission of discriminating in favor of corporate lobby groups and of violating the EU's transparency rules. As the Corporate Europe Observatory asks:

how can documents that the Commission has already shared with the business community at large suddenly become confidential and a threat to the EU's international relations when a public interest group asks for their disclosure? This is the core question raised by the lawsuit.

And it points out:

What is at stake in the lawsuit is whether the Commission can continue its habit of granting big business privileged access to its trade policy-making process by sharing information that is withheld from the public. This practice not only hampers well-informed and meaningful public participation in EU trade policy-making, it also leads to a trade policy that, while catering for big business needs, is harmful to people and the environment in the EU and the world.

The European court will be handing down its verdict on 7 June. If the judges side with transparency, it could have a major impact on how the imminent TAFTA/TTIP negotiations between the EU and US are conducted. If they don't, then the battle for the public's right to know what is being agreed in its name will doubtlessly continue.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: eu, eu commission, india, lobbyists, public interest, secrecy, trade agreements
Companies: corporate europe observatory

Lobbyists, Politicians And USTR Planning A 'Rally' To Show 'Strong Support' For TAFTA

from the oh-really? dept

As the plans for the new TAFTA agreement are getting increasing heat and concern from the public, apparently the US Chamber of Commerce (a lobbying organization that has long favored these protectionist policies that seek to protect their members) along with the acting head of the USTR, Demetrios Marantis, and various "lawmakers," are planning to host a "rally" next week to pretend that there is "strong support" for such an agreement. Somehow, I doubt that this will bring out crowds of young people. Apparently this will be held on Capitol Hill and they'll be launching a "coalition" in support of "trans-atlantic trade." Sounds like a party.

Of course, this reeks of desperation on the part of the USTR and the Chamber of Commerce. The momentum against these kinds of agreements has been growing, and putting together a pretend rally where the only folks likely to show up are the representatives of big legacy businesses (apparently GE and IBM expect to attend) isn't going to mollify a concerned public.

I say this as someone who believes strongly in the value and importance of free trade. Trade barriers can create serious economic harm, especially for those they're supposedly designed to help. However, the reality is that these agreements are not really about free trade. They tend to be about helping out a few legacy businesses who don't want competition and don't want to deal with the impact of innovation. And, for reasons that are beyond me, the USTR thinks it's their job to help prop up those legacy businesses and to slow down the pace of innovation. I understand why the Chamber of Commerce does this (they're paid to), but it's pretty shameless for the USTR to be so obviously in the pocket of big business, rather than representing what is really in the best interests of trade policy across the board.

Filed Under: lobbyists, politicians, rally, tafta, tpp, trade agreements
Companies: us chamber of commerce

Recording Industry Lobbyists Accuse Pandora Of Deliberately Not Selling Ads To Plead Poverty To Congress

from the right,-and-the-labels-just-need-to-sell-more-albums dept

I'm always amazed at how copyright maximalists from the entertainment industry insist that no one can comment on their own businesses unless they're "in it" while freely commenting on other businesses they clearly know nothing about. Here's the latest example. The musicFIRST coalition, which is basically a lobbying operation set up by a few of the big legacy players in the recording industry (including the RIAA, A2IM and SoundExchange) in order to push for ever higher royalties for music, has been fighting hard against any effort to create royalties for internet companies that would allow those companies to survive. Like the Golden Goose, the labels have decided that if anyone online is making money, it's best to squeeze as much of it out of them as possible until they're dead, rather than allowing them to grow and to provide sustainable revenue back to the industry.

But their latest blog post really takes public cluelessness to new and impressive levels. It's a response to the news that Pandora's listener base has been growing. That should be celebrated, but, as Pandora has been pointing out for ages, thanks to the crazy high royalty rates that it has to pay SoundExchange (which are many times the rates of satellite radio and infinitely larger than terrestrial radio, since terrestrial radio has an exemption from performance royalties) it is close to impossible for Pandora to ever be profitable. Even worse (for musicians, the industry and the public) these crazy high rates means a lot less competition, fewer new authorized services and a smaller market overall. Pandora has been seeking more reasonable rates that would actually allow it to provide more services and to grow the overall pie even more by adding more value. However, so far, that's been cost-prohibitive given how much goes out the door to SoundExchange.

So, along comes MusicFIRST with the "solution" to all of Pandora's profitability problems: sell more ads. No, that's not a joke. They seriously seem to think that Pandora's problem is that it has chosen to take on less revenue and that all it has to do is turn the knob up and sell more ads:

As economist Jeff Eisenach testified last year regarding Pandora royalties, "the ratio of Pandora's content costs to its revenues is within Pandora's control: To raise its revenues, it need only choose to sell additional advertising" or find other ways to cash in on its popular and successful product.

Pandora is choosing to limit revenues for now by keeping advertising low and attracting customers to its free service tier.... It's no reason to plead poverty in the face of massive audience growth and "better than expected" earnings reports.

As someone who relies on advertising for a portion of my income, I wish musicFIRST had just told me all along that the fact that ad rates are so low and that fill rates are so dismal on advertising all across the internet is because I just wasn't trying enough and that I'd purposely been "limiting revenues." Why don't we just flip that one around? Perhaps the reason that the major labels and SoundExchange have been making so little money is that they're not selling enough. All they need to do is sell more and all their problems are solved. No need to go plead poverty to Congress and demand a jacking up of rates, since -- by their own logic -- they just need to sell more, and clearly, that's easy. If they're not selling more, it's because they've decided to limit revenue.

Stories like this make you wonder if anyone actually takes musicFIRST seriously.

Separately, musicFIRST trots out the lamest trope in the book in the attacks on Pandora: focusing on the value of the company and the equity its founders hold. Only someone who is deliberately misleading or completely clueless on basic financial issues would equate a company's valuation with revenue. The two are wholly different beasts. And yet, these lobbyists pretend that the equity that Pandora execs hold somehow is taken unfairly from artists. That, of course, makes no sense if you actually understand the difference between equity and revenue. Any artist could have had the same equity if they had built Pandora. They didn't, so they don't.

Filed Under: business models, interactive streaming radio, licensing, lobbyists, performance rights, royalties, selling ads
Companies: musicfirst, pandora, riaa, soundexchange

Copyright Lobby: The Public Has 'No Place In Policy Discussions'

from the don't-list-to-them,-they're-just-the-public dept

"To promote the Progress of Science and useful Arts." That is the purpose of Article 1, Section 8, Clause 8 of the Constitution, which is sometimes referred to as the "copyright clause" (or "the patent clause"), which enables both areas of law to be created via Congress. It's also the part that is most often ignored. As we've discussed, the whole purpose of this clause is to make it clear that the public are the sole stakeholders when it comes to proper policy making decisions regarding these laws. However, with this new push for comprehensive copyright reform, it appears that the copyright lobby is already working on ways to make sure that the public is marginalized in the discussion.

We've got two recent examples from the "Copyright Alliance," a DC-based lobbying shop put together by copyright maximalists (with the help of super right wing interests who normally don't link up with Hollywood on much), who are seeking to spin the debate in their favor with a lot of bluster and propaganda, often trying to demonize and/or marginalize the public's role in this debate. First up is an op-ed piece, in which the Copyright Alliance argues first that any new copyright reform must focus on maximalist principles, whether or not they make any sense. And then it digs in against the public, arguing that their voice shouldn't count for much because, apparently, they're so easily manipulated.

Those skeptical of copyright protection have expended a lot of energy to redefine its language and revise its history. Calls for lessening copyright protections are far too often accompanied by heated rhetoric. Appealing to emotions may be a great way to drum up signatures for online petitions, but has no place in policy discussions. Finally, it is not hard to find examples of those who propose dramatic changes without understanding the business realities of how creative individuals and industries operate.

Let's unpack that a bit. Each sentence is ridiculous in its own special way. If we are to look at the history of the copyright debate, one side and one side alone, has focused on "redefining its language and revising its history" and that would be the maximalists. In fact, there's an entire book that details exactly how the copyright maximalists have continually changed the language of copyright and revised its history. Copyright turned from a very narrowly focused concept, which was designed to encourage the spread of learning and knowledge, to something entirely different. A "limited monopoly" (as the framers called it) was turned into boundlessly vague "intellectual property." The act of "infringement" was turned into "theft and stealing." People who incidentally infringed on copyrights were describes as "pirates." The law was expanded and expanded because of moral panic after moral panic.

As for "heated rhetoric," we've been told over and over again that if we don't expand protections and kill of technologies, "the creative industries will die," despite no evidence to support that. Technologies which have helped to expand the industry, to create new ways to create, to promote, to distribute and to monetize were seen as the enemy because the powers-that-be did not control them. This is why the VCR was called "the Boston strangler of the movie industry" by the MPAA's Jack Valenti. I'm sorry, but the idea that those of us skeptical of today's copyright laws are the ones redefining the language or history is simply a laughably false claim.

But the really disturbing part is the next line. The claim that the public speaking out, such as via petitions or through various actions in which they contact politicians, should be ignored because it has "no place in policy discussions" is really just downright insulting. We know that, in the wake of SOPA, the copyright lobby has spent plenty of effort pretending that the public really didn't speak out, or that, if they did, it was only because they were stupid and deluded. But that should be seen for what it rightfully is: an insulting way of dismissing the public's interest in a law that is for the public's benefit.

The copyright lobby is scared to death that the public might actually speak up on its own behalf, because that would ruin the scam it's been running for quite some time.

In another piece by the same Copyright Alliance group, in response to the good ruling in the Kirtsaeng case, the alliance lashes out at public interest groups Public Knowledge and others for supposedly deluding the public:

Supporters of Kirtsaeng, including companies like eBay and groups such as Public Knowledge, have played an aggressive role in warping the public's understanding of the anti-arbitrage provisions of the Copyright Act and the benefits of market differentiation. Behind the veil of the Owners Rights Initiative, they perpetuated a series of falsehoods; these sweeping generalizations mischaracterize the impact of Kirtsaeng, generally attempting to recast a case limited in scope as an issue that will concern all individual resellers of goods.

The entire article is full of "redefinition" and "revising of history" -- to the ridiculous point of suggesting that the US hasn't recognized first sale rights on foreign goods for decades (a laughably false claim). But in the paragraph quoted here, you see its true contempt for the public. Apparently the public is simply too stupid to understand copyright law and is easily led astray by groups like Public Knowledge.

Taken together, you see both the fear and outright contempt that the copyright lobby has for the public. To them, the public are interfering with "the industry's rights" and are apparently stupid, gross and easily led astray and into mob behavior. I'm guessing that some of this is just PTSD following the lobbyists getting their clocks cleaned in the SOPA fight -- through cognitive dissonance, they've determined the only plausible explanation is that the public was duped.

But some of us believe that copyright law is supposed to be used in the public interest, and if that's the case, we should recognize that the public is the stakeholder who matters. To claim they should "have no place in policy discussions" isn't just wrong, but it's insulting. We should be welcoming the public into these discussions as much as possible -- not just because they are the key stakeholders here, but (more importantly) because if the Copyright Alliance actually wants a law the public respects, it might want to try including them in the process this time around. That its kneejerk reaction is to insult, demean and exclude the public gives a pretty clear indication where they would like this debate to go.

Filed Under: copyright, lobbyists, public, rhetoric

Dear Hollywood: Hire Better Shills

from the wow dept

The Wall Street Journal recently ran a puff piece showing just how much work it is for NBC Universal to keep fighting all those darn pirates. It's basically a propaganda piece starring Rick "Save the Corn Farmers!" Cotton, NBC's general counsel who fights piracy the way that Captain Ahab chases Moby Dick. There are all sorts of problems with the piece, including the fact that it appears to believe that just because NBC is sending a lot more takedowns, it means that the "problem" is growing. Of course, as we were just discussing last week, when you look at the actual data, it makes a pretty clear case for anti-piracy efforts doing nothing to stop piracy, but investment in lots of innovative startups providing consumers what they want being the path to success. But, that's not Cotton's style.

Anyway, Janko Roettgers, over at PaidContent, wrote a nice post debunking much of the story, which quickly got three comments that all sounded vaguely similar in their poor use of the English language -- all of which tried to spin the story into "proof" that greater enforcement, such as the six strikes effort, was needed. Two of them make the laughable claim that each infringement represents "lost revenue." That's not how it works. Here's one of the three comments:

I’m glad the author is pointing out what is pretty clear to people who browse the internet everyday, piracy is still widespread and is evolving every year. Not even taking into account the huge piracy issues overseas, each of these takedown requests represents lost revenue for both views and time spend tracking and reporting this illegal behavior. NBC will and should continue to do this because legal viewing of their content is vital for their business. But the better long term solution is to create a system where NBC isn’t playing a carnival game just to receive the proper copyright benefits for the content they invest so much in.

Of course, the real way to get to that "long term solution" is for NBC to stop playing the carnival game of takedowns -- which do nothing to reduce infringement -- and focus on making sure its content is more widely available from more legitimate sources.

Either way, Janko quickly pointed out that, in a surprise to no one, it was pretty clear that the comments were from DC-based hired shills for the entertainment industry:

Kelseliz, AlexB and SteveFeather, I’m glad you all enjoyed my story. However, I’m not too surprised you all share the same point of view. After all, the three of you commented from the same Washington D.C.-based IP address, and one of the email addresses you left points to a D.C. lobbying firm that gets paid by major labels, rights holder groups and movie studios… but I’m sure that’s all just one big coincidence.

I know that it's common in our comments for people to accuse others of being "shills." Frankly, people jump to the shill label way too fast. While it is clear that some of our commenters do work in the industry, there are very few indications that they are paid to be propaganda spreaders, and I try to give them the benefit of the doubt (similarly, I would urge our commenters to stop throwing around the "shill" term so readily -- unless there's actual evidence, don't leap to unsupported conclusions). That said, in this case it seems pretty blatant that some entertainment industry "friends" from a DC lobbying group are now out trying to spread a very poorly argued concept that we somehow "need" six strikes. I'd suggest that the RIAA, MPAA and others might find better ways to spend their money.

Filed Under: entertainment industry, hollywood, lobbyists, piracy, shills, six strikes

How Lobbyists' Changes To EU Data Protection Regulation Were Copied Word-For-Word Into Proposed Amendments

from the well,-just-look-at-that dept

Everyone knows that politicians are lobbied, sometimes massively. But it's rare to be able to track directly the detailed effects of that lobbying. That's why a new site called LobbyPlag is so interesting: it allows people to do precisely that in the case of the controversial data protection rules in the EU, which aim to regulate how personal information harvested from users of online services can be used. Naturally, many large Net companies -- mostly in the US -- are unhappy about these moves; some US diplomats are even talking of a possible "trade war" if the proposals go through in their current form. That's unlikely, not least because the lobbying is starting to pay off, as LobbyPlag's analysis makes clear.

The site takes two sets of publicly-available documents -- those prepared by companies or their lobbyists, and the amendments proposed for the Data Protection Regulation -- and compares them, showing the results in a highly visual way. It turns out that entire paragraphs have been copied word-for-word from the lobbyists' documents and put forward as suggested amendments. Similarly, some of the deletions that European politicians have proposed are precisely those asked for by various companies.

One amendment concerns what LobbyPlag terms "forum shopping":

This amendment allows companies to "designate" its main establishment. The previous version of the law would make the member state of the factual "main establishment" responsible. This amendment allows massive "forum shopping" -- companies can choose the member state with the weakest data protection authority or the littlest enforcement (e.g. UK or Ireland) while actually being situated in a totally different member state. Even Peter Fleischer (Google’s Privacy Officer) has recently criticized Microsoft for "forum shopping" in Luxemburg

Here's the original text from the European Commission (pdf), Article 4(13):

'main establishment' means as regards the controller , the place of its establishment in the Union where the main decisions as to the purposes, conditions and means of the processing of personal data are taken; if no decisions as to the purposes, conditions and means of the processing of personal data are taken in the Union, the main establishment is the place where the main processing activities in the context of the activities of an establishment of a controller in the Union take place. As regards the processor, 'main establishment' means the place of its central administration in the Union;

Here's what Amazon (pdf) and eBay (Microsoft Word) wanted:

'main establishment' means the location as designated by the undertaking or group of undertakings, whether controller or processor, on the basis of, but not limited to, the following optional objective criteria: (1) the location of the European headquarters of a group of undertakings; (2) the location of the entity within a group of undertakings with delegated data protection responsibilities; (3) the location of the entity within the group which is best placed in terms of management functions and administrative responsibilities to deal with and enforce the rules as set out in this Regulation; or (4) the location where effective and real management activities are exercised determining the data processing through stable arrangements. The competent authority shall be informed by the undertaking or group of undertakings of the designation of the main establishment;

Here's what several MEPs proposed as an amended version:

'main establishment' means the location as designated by the undertaking or group of undertakings, whether controller or processor, on the basis of, but not limited to, the following optional objective criteria: (1) the location of the European headquarters of a group of undertakings; (2) the location of the entity within a group of undertakings with delegated data protection responsibilities; (3) the location of the entity within the group which is best placed in terms of management functions and administrative responsibilities to deal with and enforce the rules as set out in this Regulation; or (4) the location where effective and real management activities are exercised determining the data processing through stable arrangements. The competent authority shall be informed by the undertaking or group of undertakings of the designation of the main establishment;

As you can see, the last of these is identical with the companies' text. Of course, there's nothing wrong in using lobbyists' suggestions if they are valuable; and there's no reason why companies shouldn't come up with good ideas that could be used. But what's striking about the changes adopted by European politicians, as revealed by LobbyPlag, is that they seem to favor the companies, and to be detrimental to the European public -- not what you would hope for from the latter's representatives in the European Parliament, who should be protecting their interests, not attacking them.

Some have countered these accusations by pointing out that suggestions from civil groups moving things the other way have also been included; that may well be true, although I've not seen any proof that exactly the same wording has been adopted. But even if that were true, that doesn't represent balance of any kind: the money that companies like Amazon or eBay are able to put behind lobbying efforts in the European Union (and around the world) dwarf the very limited resources of cash-strapped citizen rights groups.

Given that lobbying will never disappear, perhaps the best we can hope for is what LobbyPlag provides us for the first time: real transparency. Using the powerful digital tools now available, we can easily compare huge numbers of documents to find similarities. That allows us as citizens to follow the threads that link lobbyists -- of all persuasions -- to the politicians that shape our laws. The hope has to be that by shining a light on those links, and letting politicians know that we are watching what they do and where they get their amendments from, the more blatant dependencies on external groups might be diminished, or at least made more subtle.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Filed Under: data protection, eu, lobbyists, politics

Former RIAA VP Named 2nd In Command Of Copyright Office

from the revolving-door dept

We've talked in the past about how unfortunate it is that the US Copyright Office seems almost entirely beholden to the legacy copyright players, rather than to the stated purpose of copyright law. That is, instead of looking at how copyright can lead to the maximum benefit for the public ("promoting the progress of science") it seems to focus on what will make the big legacy players -- the RIAA and MPAA -- happy. Part of this, of course, is the somewhat continuous revolving door between industry and the Copyright Office. Just a few months ago we wrote about how the Copyright Office's General Counsel, David Carson, had jumped ship to go join the IFPI (the international version of the RIAA).

Last night the news came out that the US Copyright Office had now named Karyn Temple Claggett as the Associate Register of Copyright and Director of Policy & International Affairs. While Temple Claggett has actually been at the Copyright Office for a little while as Senior Counsel for Policy and International Affairs, not too long ago she was a hotshot litigator for... the RIAA. In fact, an old bio of hers, from when she was at the RIAA (as VP, Litigation and Legal Affairs), notes that she was instrumental in their ever-present legal campaign against pretty much any innovative technology that comes along:

While at the RIAA, Ms. Temple-Claggett has worked on some of the most high-profile copyright cases brought by copyright owners in recent years, including the Supreme Court Grokster litigation, as well as litigation against LimeWire, XM Satellite Radio and Usenet.com

I'm sure she's a fine person and a good litigator, but it's difficult to think that she'll be anything but a pure maximalist in favor of expanding copyrights and copyright enforcement, and against any innovation that challenges the status quo. It's hard not to be cynical when you see this kind of revolving door. And, of course, it's always entirely one-sided. Could you imagine the Copyright Office naming a top EFF litigator as second in command? Exactly the point. How is it possible to take the Copyright Office seriously as an advocate for what's best for the public, when the connections there are to industries who lean heavily on keeping out innovation and promoting an old business model through aggressive litigation and regulation?

Filed Under: bias, copyright office, david carson, karyn temple claggett, lobbyists, revolving door
Companies: riaa

That Was Fast: Hollywood Already Browbeat The Republicans Into Retracting Report On Copyright Reform

from the so-that's-how-that-works dept

So, late Friday, we reported on how the Republican Study Committee (the conservative caucus of House Republicans) had put out a surprisingly awesome report about copyright reform. You can read that post to see the details. The report had been fully vetted and reviewed by the RSC before it was released. However, as soon as it was published, the MPAA and RIAA apparently went ballistic and hit the phones hard, demanding that the RSC take down the report. They succeeded. Even though the report had been fully vetted and approved by the RSC, executive director Paul S. Teller has now retracted it, sending out the following email to a wide list of folks this afternoon:

From: Teller, Paul
Sent: Saturday, November 17, 2012 04:11 PM
Subject: RSC Copyright PB

We at the RSC take pride in providing informative analysis of major policy issues and pending legislation that accounts for the range of perspectives held by RSC Members and within the conservative community. Yesterday you received a Policy Brief on copyright law that was published without adequate review within the RSC and failed to meet that standard. Copyright reform would have far-reaching impacts, so it is incredibly important that it be approached with all facts and viewpoints in hand. As the RSC’s Executive Director, I apologize and take full responsibility for this oversight. Enjoy the rest of your weekend and a meaningful Thanksgiving holiday....

Paul S. Teller
Executive Director
U.S. House Republican Study Committee
Paul.Teller@mail.house.gov
http://republicanstudycommittee.com

The idea that this was published "without adequate review" is silly. Stuff doesn't just randomly appear on the RSC website. Anything being posted there has gone through the same full review process. What happened, instead, was that the entertainment industry's lobbyists went crazy, and some in the GOP folded.

Frankly, if they wanted to win back the youth vote, this was exactly how not to do it. If you just look through the comments on our post on the original, or through the Twitter response to this report, there were tons of people -- many of whom were lifelong Democrats -- claiming that they would switch parties if the GOP stuck with this. Instead, they folded like a cheap card table in less than 24 hours.

In the long run, that's going to hurt the GOP, because the people who were suddenly interested in supporting the GOP will assume that any such effort is subject to a similar bait-and-switch. Meanwhile, this leaves open an opportunity for the Democrats as well. The Republicans just came close to becoming the party that actually listened to what was important to young people today -- and they quickly changed their mind. The Democrats can sweep in and take the issue since apparently it's there for the taking. All they have to do is be willing to tell some Hollywood lobbyists to pipe down.

Filed Under: copyright, copyright reform, gop, lobbyists, rsc
Companies: mpaa, riaa