Internet Archive Would Like To Know What The Association Of American Publishers Is Hiding

from the it's-not-the-only-one dept

Last year when a bunch of the biggest publishing houses sued the Internet Archive, in the midst of a pandemic, over their digital library program, I was a bit surprised that the announcement about the lawsuit came not from any of the publishers themselves directly, but rather from the Association of American Publishers (AAP), which is officially not a party in the lawsuit. That alone felt a bit... sketchy.

And, now it may be an issue in the lawsuit itself. Last week, the Internet Archive asked the judge for a hearing because the AAP is attempting to withhold various responsive documents on the discovery requests that were made to the publishers themselves regarding their communications with the AAP, and a separate subpoena served on the AAP. And it appears the AAP really doesn't want that stuff to get into the hands of the Internet Archive's legal team.

This dispute concerns documents (i) responsive to the Internet Archive’s requests for production served on Plaintiffs and (ii) responsive to the Internet Archive’s subpoena served on the AAP. These withheld documents are critical to the Internet Archive’s fair use defense—specifically the fourth factor, market harm. The varying views of publishers regarding whether they objected to the Internet Archive’s activities, whether they regarded themselves as having been harmed by those activities, and whether that harm was of a large or of a small magnitude are key pieces of evidence as to whether Internet Archive’s nonprofit library lending causes any substantial market harm.

There's also a hint in the letter suggesting that the Internet Archive is suggesting that the only real "harm" caused by its Open Library was that it made it more difficult for the big publishers to collude (as they did with Apple regarding ebook prices) to jack up the prices on ebooks sold (but not really sold) to libraries.

And publishers’ communications regarding the source of that harm—for example, if the Internet Archive’s activities simply make it more difficult for publishers to agree among themselves on ebook prices, as they did in United States v. Apple, Inc., 791 F.3d 290 (2d Cir. 2015)—will shed light on whether that harm is cognizable under the fourth factor. Further, the Internet Archive is entitled to explore whether Plaintiffs and other publishers conspired here as they did in the Apple case; if so, such anticompetitive conduct here may support an additional defense which could preclude infringement liability. See Saks Inc. v. Attachmate Corp., No. 14-civ-4902-CM, 2015 WL 1841136, at *12 (S.D.N.Y. Apr. 17, 2015) (“[H]istorically, the defense of copyright misuse has been successfully asserted most often in cases where anticompetitive effects were alleged.”). Finally, withheld documents are likely to be relevant to the Internet Archive’s laches defense. The requested documents will shed light onto why the AAP (and Plaintiffs), despite being aware for years of the Internet Archive’s digital lending library, waited until the summer of 2020 to sue.

The AAP is trying to argue that its communications with the publishers is protected by attorney-client privilege, which is made difficult by the fact that the AAP is not acting as the publishers' lawyers here, but rather as lobbyists.

Plaintiffs have not demonstrated beyond conclusory statements in their privilege logs that communications with the AAP were exchanged to solicit, receive, or give legal advice rather than to discuss business concerns and interests....

.... One of Plaintiffs’ justifications for withholding their communications with the AAP is that some AAP staff members are attorneys. But AAP employees who happen to be attorneys wear many hats. For example, the President and CEO of the AAP is also a lawyer, as is AAP’s Senior Vice President of Global Policy. While it is conceivable that these executives do legal work for the organization, the burden is on AAP to justify why particular documents are privileged, given these executives’ predominant business roles.

Also, generally speaking, if documents are attorney-client privileged, it means you don't share it with anyone who is not on the legal team. But, that's not what happened here:

Plaintiffs’ privilege logs also suggest that AAP employees who were not attorneys were copied on withheld documents, including communications staff—which suggests that the predominant purpose of the document may not have been to secure legal advice. United States v. IBM Corp., 66 F.R.D. 206, 213 (S.D.N.Y. 1974) (“no protection attaches to a document prepared for simultaneous review by legal and nonlegal personnel.”). Finally, several entries on Plaintiffs’ privilege logs reference communications either (i) solely between non-party third parties or (ii) between Plaintiffs and third parties (like authors and literary agents). Plaintiffs have not met their burden to show that privilege extends to any of these third parties.

There's some more in the letter, but it does seem pretty clear that the AAP desperately doesn't want the Internet Archive to know what it was talking about with the publishers regarding the plans around dealing with the Open Library.

Filed Under: collusion, copyright, ebooks, libraries, lobbying, open library, price fixing
Companies: aap, association of american pubblishers, internet archive

Letting Newspapers Band Together To Demand Payments From Internet Companies Is Bad For The Internet And Bad For Journalism

from the bad-ideas dept

In the wake of Australia getting its ridiculous, anti-open internet link tax passed into law, the push to create similar such laws everywhere else has gone into overdrive. In the US, the main driver of this effort (which has been pushed by legacy newspaper giants) has been an antitrust exemption that would allow the newspapers to collude, in order to put up (what they think is) a joint effort to demand that Google and Facebook pay them for links. The supposed "antitrust" wing of the Democratic party, David Cicilline in the House and Amy Klobuchar in the Senate, have decided that this is a good idea and introduced the Journalism Competition and Preservation Act (JCPA) (here's the House version). Leaving aside the oddity of thinking that the best way to deal with what you believe are dominant firms is to allow other firms to collude and avoid antitrust laws, the entire proposal is silly, and potentially destructive to the open internet.

Public Knowledge has put together a letter to Congress explaining why (our think tank, the Copia Institute, has signed onto the letter). In a separate blog post, Public Knowledge notes that while it as an organization has been largely supportive of Cicilline and Klobuchar's antitrust efforts around the tech companies (something we at Techdirt are somewhat less convinced by), this bill is a complete disaster.

The key part is exactly what we highlighted was wrong with the Australian law. The idea that this is a competition issue and that newspapers need to be able to band together to have enough clout to negotiate a price for linking to their stories has a totally false underlying assumption, that there's some underlying right to be paid for links. The whole nature of the open internet is that you don't need permission or a license to link to someone else. But this bill seems to think that's not true. And that's a problem.

The JCPA would create an antitrust law exception to allow certain publishers the ability to jointly negotiate business terms with major online platforms. Notably, it does not otherwise alter substantive law. However, no individual news publication currently has any legal right (via copyright, or any other statute) to prohibit third parties from linking to their content. Nor does banding together to collectively negotiate give such a right. In other words, a cartel of news sites is exactly as powerless to prevent Facebook or Google from linking to its members’ content as a small site would be negotiating on its own.

And that could lead some -- perhaps even courts -- to think that this bill actually alters copyright law to mean that you do need a license to link, and that would be horrific for the open internet.

This central disconnect means that the structure of the bill does not achieve its stated legislative aims. As such, we are concerned that this bill could be interpreted by courts to implicitly change the scope of copyright, expanding the exclusive rights that news publications enjoy in their material beyond what any copyright owner has ever enjoyed. To the extent that this creates a new substantive right to demand that material not be linked to, this is unwise; to the extent that it interferes with fair use rights, particularly of the rights of users of platforms, it is unconstitutional and violative of our international obligations.

The ability of one website to connect (“link”) to other websites, without needing to negotiate to do so, is a foundational component of modern internet infrastructure. Linking is not, and has never been, an act within the scope of copyright. It is not within the statutory or common-law ambit of copyright law, as merely linking to a piece of external content is not a reproduction, display, performance, or distribution of that content. As such rightsholders do not--and should not--have the ability under copyright law to prevent third parties from linking to their publicly available content. (Notably, the vast majority of rightsholders do not want such a right, and those that do already have technical methods which allow them to do so.)

Once again, what we're seeing with Klobuchar and Cicilline is that they're so deeply infatuated with the idea that "big tech is bad" that they fail to bother to look at the details of their own proposals and what they would mean for the open internet.

Filed Under: amy klobuchar, antitrust, cmpetition, collusion, copyright, david cicilline, jcpa, link tax, links, negotiations, newspapers

Nonprofit TV Service Locast Accuses Big Four Broadcasters Of Collusion

from the dysfunction-junction dept

Locast, a New York based nonprofit that offers viewers access to over-the-air (OTA) broadcasts via the internet, has accused the big four broadcast networks of colluding to restrict consumer access to those broadcasts. As we noted recently, Locast was custom built to test the copyright legal minefiled created in the wake of the Aereo ruling, which made made numerous dubious assumptions and provided zero guidance for companies that wanted to enter the space but comply with the law. Enter former FCC lawyer and media executive David Goodfriend, who effectively created Locast specifically in the hopes the industry would sue.

Last month Goodfriend got his wish, with ABC, CBS, Comcast/NBC, and Fox all filing suit, claiming the video nonprofit (which currently offers the service in 13 markets) is "illegally using broadcaster content." Locast in turn has now responded in a court filing (pdf), alleging that the broadcast networks have unfairly colluded to restrict public access to OTA broadcasts:

Plaintiffs have colluded to limit the reasonable public access to the over-the-air signals that they are statutorily required to make available for free, and have opted instead to use their copyrights improperly to construct and protect a pay-TV model that forces consumers to forgo over-the-air programming or to pay cable, satellite, and online providers for access to programming that was intended to be free. A large portion of the fees paid by the public is then handed over to Plaintiffs in the form of retransmission consent fees.

Broadcast TV networks are available using both an inexpensive antenna and airwaves that are technically owned by the public. But, given broadcast networks collected $10.1 billion in retransmission fees for these channels in 2018 from cable TV operators looking to include them in their cable lineups, they're obviously not keen on outfits looking to disrupt their profitable, existing models. Locast currently streams these channels in 13 markets but doesn't charge users for access, only taking donations as a nonprofit. Its lawyers say the existing broadcast model is little more than a complicated con:

This is classic copyright abuse. By limiting access to the over-the-air signals that Plaintiffs have committed to make freely available, and simultaneously using the copyrights in their programming to drive revenue for the local programming that consumers cannot now effectively receive over the air through their pay-TV model, Plaintiffs have colluded and misused copyrights to expand their market power beyond what those copyrights were intended to protect. The payTV providers get rich. Plaintiffs get rich. The public gets fleeced.

In addition to engaging in what Locast's lawyers call a "a sham copyright infringement claim," they state that the broadcast networks have been working in concert to threaten retaliation against any additional partners beyond AT&T and Dish:

Plaintiffs’ bad faith litigation is part of a broader coordinated campaign to undermine Defendants’ business dealings and chill financial support among potential donors, including with direct threats of retaliation or baseless litigation against them. These threats have harmed competition and will continue to do so until stopped by this Court.

The broadcasters' lawsuit was filed in US District Court for the Southern District of New York against Sports Fans Coalition New York (SFCNY), the organization that technically runs Locast. The broadcasters continue to argue that the outfit is not only illegal, but that it's not eligible for non-profit status because it's funded, in part, by Dish and AT&T, two companies both trying to make inroads in the streaming TV space.

Filed Under: antitrust, collusion, competition, copyright, david goodfriend, tv
Companies: locast

NY Times Publishes Laughable Propaganda To Argue Google Owes Newspapers Like Itself Free Money

from the all-the-propaganda-that-fits-to-pad-our-bottom-line dept

Earlier this week, I posted about a silly new organization that claims it's going to "save journalism" mainly by whining about how evil Google and Facebook are. As I noted in that piece, even if you believe Google and Facebook are evil, it's not clear how whining about them being evil provides any new journalists jobs. But the news industry as a whole has been on this weird "blame someone else" kick for way too long. The "News Media Alliance" (formerly the Newspaper Association of America) has been on a weird anti-tech protectionist kick for years now, and on Monday published a "study" claiming that Google made $4.7 billion from news -- a number that was then trumpeted loudly by the NY Times, which just happens to be one of the larger members of the News Media Alliance.

There's just one tiny problem. The "study" is no study at all and basically everyone in the media business is laughing at the NY Times for publishing such a ridiculously bogus study without highlighting how bogus it was. The $4.7 billion is not based on any careful research. It's based on one off-hand comment from over a decade ago by an exec who hasn't been at Google in years, and then extrapolated forward. Really.

That study relies on a public comment then–Google executive Marissa Mayer made at a media event in 2008, when she estimated that Google News brought in $100 million in revenue. The NMA report calculates what the same proportion of the company’s revenue would be today, then further inflates this figure based on the fact that news consumption via Google’s main search is 6 times larger than via Google News (according to the NMA’s estimate of referral traffic to newspaper websites).

This is not what any sensible person would call a "sound" methodology. Oh, and I almost forgot the kicker:

...the News Media Alliance cautioned that its estimate for Google’s income was conservative

The NY Times also kinda skimmed over the purposeful timing of this study's release. The News Media Alliance has been pushing for sometime for a special antitrust exemption to allow big news orgs to collude to try to force more money out of Google and Facebook, and the study was released just a day before a Congressional hearing on the topic. Most normal reporters would recognize that, maybe (just maybe) there was an ulterior motive in releasing this "report" with such a flimsy statistic. But the Times reported it as if it was fact.

There may be plenty of reasons to distrust Google and Facebook and their role regarding journalism, but this report is not any of that. Google doesn't even put ads on most of Google News, but instead pushes visitors off to the websites of news orgs. If those news orgs are failing to monetize that traffic, it seems pretty ridiculous to blame google for that and demand more money via collusive efforts.

As Jeff Jarvis notes in his own response to the NYT's piece, if the publishers want to point the blame finger, they might want to start by turning it back on themselves:

The problem has long been that publishers aren’t competent at exploiting the full value of these clicks by creating meaningful and valuable ongoing relationships with the people sent their way. So what does Google do? It tries to help publishers by, for example, starting a subscription service that drives more readers to easily subscribe — and join and contribute — to news sites directly from Google pages. The NMA study cites that subscription service as an example of Google emphasizing news and by implication exploiting publishers. It is the opposite. Google started the subscription service because publishers begged for it — I was in the room when they did — and Google listened. The same goes for most every product change the study lists in which Google emphasizes news more. That helps publishers. The study then uses ridiculously limited data (including, crucially, an offhand and often disputed remark 10 years ago by a then-exec at Google about the conceptual value of news) to make leaps over logic to argue that news is important on its services and thus Google owes news publishers a cut of its revenue (which Google gains by offering publishers’ former customers, advertisers, a better deal; it’s called competition). By this logic, Instagram should be buying cat food for every kitty in the land and Reddit owes a fortune to conspiracy theorists.

The real problem here is news publishers’ dogged refusal to understand how the internet has changed their world, throwing the paradigm they understood into the grinder.

Yes, the world has changed. But the NMA seems to think that the government should now just force the internet companies to hand over money after their own members spent years twiddling their thumbs and squandering any attempt to build up loyal followings and sustainable business models. It's not easy to keep a media business sustainable these days, but so much of it has to do with those companies refusing to recognize how the internet was changing the business, and how to take advantage of those changes.

Filed Under: collusion, internet, news, newspapers
Companies: google, news media alliance, ny times

A Nesting Doll Of Stupidity: Rudy Giuliani's Twitter Typo Leads To Bogus Trademark Threat Letter

from the this-timeline-is-so-stupid dept

Another day, another crazy trademark story. As you may recall, back in December we wrote about how President Trump's personal lawyer, and former NYC mayor, Rudy Giuliani -- who considers himself a cybersecurity expert -- made an utter fool of himself. It started with him making a typo in a tweet, in which he left out a space after the period ending a sentence. The second sentence started with "In" but after a period it became ".in" which is the TLD for India. Someone then registered that domain and pointed it to a site critical of Trump. Rather than recognize he made a typo, Giuliani ridiculously tweeted that Twitter had "allowed someone to invade my text with a disgusting anti-President message." Except that didn't happen. Incredibly, months later, Giuliani's nonsense tweet is still up.

This resulted in people hunting through previous Giuliani tweets, and they discovered that Giuliani had made a similar typo with a similar autolink effect a few months earlier for the URL "collusion.so" specifically with this text:

#REALNEWS: Woodward says no evidence of collusion.So does Manafort’s team. Mueller can investigate endlessly and he will find no evidence. The only conspiracy,using criminal means, is the campaign to stop and then remove President Trump.

Someone astutely registered collusion.so and pointed it to Lawfare's coverage of connections between Trump and Russia. It was all a good fun internet joke thing.

So what could this possibly have to do with crazy trademark claims? Well... clothing brand Asos apparently launched a clothing line called "Collusion" around the same time as Giuliani's original tweet, and its brain-dead clueless lawyers decided that the registration of collusion.so was clearly infringement, and sent a very silly cease and desist letter. Thankfully, whoever registered the domain asked EFF to represent them in responding, and EFF certainly responded:

As you will see, it would be difficult to imagine a set of circumstances further removed from trademark infringement than our client’s registration of the collusion.so domain. The story begins with Rudy Giuliani, former New York mayor and current attorney to President Donald Trump. Last year, some Twitter users noticed that Mr. Giuliani was making typographical errors in his tweets in a way that inadvertently created well-formed URLs. A September 15, 2018 tweet read, in part, as follows: “#REALNEWS: Woodward says no evidence of collusion.So does Manafort’s team.”

Our client noticed that Mr. Giuliani had inadvertently tweeted the URL “collusion.so” and decided to register the domain name. As a comment on U.S. politics, our client chose to direct the URL to the Lawfare blog’s collection of articles regarding connections between President Trump and Russia. Our client has no association with the Lawfare blog.

The registration of collusion.so received some press coverage.

[....]

In your letter, you write that the COLLUSION mark is the “ultimate youth label” and explain that ASOS recently launched a clothing line under this brand. You claim that our client is “taking unfair advantage of ASOS’ reputation in the COLLUSION brand and the COLLUSION trade mark by luring customers to your website for your own gain.” These allegations are ludicrous.

Trademark infringement requires, “use in commerce [of a] copy, or colorable imitation of a registered mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive.” 15 U.S.C. § 1114(1)(a). Our client’s registration of the collusion.so mark for an act of sardonic political commentary is not a “use in commerce” subject to trademark law. See Koch Indus., Inc. v. Does, 2:10CV1275DAK, 2011 WL 1775765, a *7 (D. Utah May 9, 2011). Moreover, there is no possible claim of confusion regarding your client’s youth clothing line. Visitors to the collusion.so domain are directed to a website that relates to the dictionary (and contemporary political) meaning of “collusion.” See Informa Business Information, Inc. v. Privacydotlink Customer 640040 / Domain Manager, Web D.G. Ltd., WIPO Case No. D2017-1756 (denying UDRP complaint where “disputed domain name [was registered] for its generic or descriptive value and has not used it in a manner that trades off the Complainant’s trade mark rights”).

While you might not have been expected to know the entire story behind collusion.so, two facts would have been immediately apparent if your firm had performed a cursory investigation before sending its letter. First, a simple WHOIS search reveals that our client registered collusion.so on September 16, 2018, which is before your client launched the COLLUSION clothing line. As your own letter explains, ASOS launched its COLLUSION line on October 1, 2018. Second, if you had visited collusion.so you would have seen that it directs visitors to a page about the alleged political collusion between the Trump campaign and Russia. From these facts, it should have been apparent that the registration of collusion.so did not in any way relate to your client’s business and was not trademark infringement.

EFF senior staff attorney Daniel Nazer has no interest in letting Asos lawyer, Stobbs, off easy either:

I note with some concern that your law firm appears to have a history of abusive trademark complaints and reverse domain hijacking. Reverse domain name hijacking means “using the [UDRP administrative process] in bad faith to attempt to deprive a registered domain-name holder of a domain name.” See Rules For Uniform Domain Name Dispute Resolution Policy, Rule 1 definitions.

In Virgin Enterprises Limited v. Domain Admin/This Domain is for Sale, Hugedomains.com, WIPO Case No. D2017-1961, Stobbs IP represented the complainant. The Panel found that “the Complaint was made in bad faith as an attempt at Reverse Domain Name Hijacking, constituting an abuse of this administrative proceeding.” Id. The Panel further noted that “[t]he Complainant must have realized that the disputed domain name was one out of many combinations of descriptive words” that that it “cannot monopolize all combinations of dictionary words with the term “virgin.”” Id.; see also Informa Business Information, supra (Panel made finding of reverse domain name hijacking); The Chancellor, Masters and Scholars of the University of Cambridge v. Kirkland Holdings LLC, WIPO Case No. D2015-1278 (Panel found “[s]ufficient grounds for a finding of abuse plainly exist”).

It appears that your firm has not learned the lesson of these cases and is continuing to make abusive trademark threats. At a minimum, your firm should conduct an investigation before sending demand letters like the one sent to our client. We urge you to be more responsible when sending trademark cease and desist letters in the future.

Not surprisingly, Asos backed down almost immediately:

Asos contacted EFF to apologize for the cease and desist letter. Asos said the letter should never have been sent and assured us that it would take no further action against our client. We welcome the apology and hope that this case serves as an example to others who might send careless or overbroad trademark threats.

This is, of course, a good end result, but the company should know better than to (a) hire a law firm known for abusing trademark law in such a manner, and (2) approve the original sending of the threat letter.

Filed Under: collusion, collusion.so, rudy giuliani, threats, trademark
Companies: asos, eff

Don't Throw Out The First Amendment's Press Protections Just Because You Don't Like President Trump

from the not-how-it-works dept

Back in April, when the DNC first sued a whole bunch of people and organizations claiming a giant conspiracy between the Russians, Wikileaks and the Trump campaign, we warned that beyond the complaint including a ton of truly nutty claims, it was also an attack on the 1st Amendment. Much of what was described as violating the law by Wikileaks and others was classic journalism activity -- and a ruling in favor of the DNC would do massive harm to the 1st Amendment. Indeed, as the case has continued to move forward, more and more media organizations are warning about the possibility of a catastrophic outcome for news media should the DNC win this case.

Perhaps ironically, this puts Donald Trump on the same team, legally, as the people he repeatedly insists are "the enemy of the people." His lawyers, of course, don't mind the double standard and have been quick to correctly wrap themselves in the First Amendment to try to get the lawsuit dismissed. This is the proper result.

Unfortunately, Trump derangement syndrome means that otherwise competent people keep searching for a "but, Trump... " exception to the 1st Amendment. Over at Just Security, two former Obama White House lawyers -- Bob Bauer and Ryan Goodman -- try to argue the case for why the 1st Amendment doesn't protect the Trump campaign in this case. The crux of their argument is that the campaign was a lot more involved in seeking damaging information, rather than just passing it around once it had been leaked.

It is on fundamental factual distinctions between Bartnicki and the Trump case that the campaign’s First Amendment theory founders.  Unlike Bartnicki’s radio host, the campaign is not free of involvement in illegal activity. It did not merely comment on what the Russians and WikiLeaks conspired to make public. It willfully engaged with both the Russians and WikiLeaks in both the pursuit and the publication of the stolen emails—actions that bump up against clear prohibitions in federal campaign finance law. Foreign nationals may not contribute or spend funds to influence an American election, and, crucially, a U.S. political campaign cannot assist or act in coordination with foreign electoral intervention.

We know that the Russians were peddling assistance to a receptive campaign, that the campaign learned as early as April 2016 that Russians possessed stolen emails, th... Jr. advised the Russians on when to release derogatory information (“later in the summer”), that the Russian hacking operation continued long after the Russians first made contact with and were greeted receptively by the campaign, that the president himself publicly encouraged the Russian government to locate the so-called “missing“ Clinton emails, and that Russian spies quickly followed by trying to hack Clinton’s personal email. There are also reports that the Russians may have previewed the plan to disseminate the emails before ever doing so.  For the purposes of the ongoing civil suit, those allegations alone rob the campaign of its current defense.

But those paragraphs make a ton of assumptions, often without enough evidence to back it up. But much, much, much worse is the following paragraph that Bauer and Goodman put in, claiming that the media shouldn't be concerned about the 1st Amendment impact of this case:

There is misplaced concern that a defeat for this First Amendment defense puts media protections at risk. Federal campaign finance regulation supplies useful guidance here: It exempts standard journalistic activity, but denies those protections to conduct outside the “legitimate press function.” It is clear from disclosures by an internal WikiLeaks critic and other materials that Julian Assange targeted Hillary Clinton and sought to work with the Trump campaign and the Russians to secure her defeat. This is not a “legitimate press function.” And the conflation of Wikileaks’ plan of campaign attack with standard journalistic activity undermines important distinctions critical to the protection of the free press.

That paragraph is frightening and should worry anyone who believes in the 1st Amendment's protections for the press. These lawyers are basically arguing that they get to decide what is and what is not a "legitimate press function" and that working with a campaign automatically makes it not a legitimate press function. As Glenn Greenwald notes, there's a viable argument that under the description that Bauer and Goodman lay out here someone could just as easily argue that Vox or MSNBC aren't protected by the 1st Amendment either:

Some will argue that there are differences of degree and level of cooperation, but even if that's true (and it's not clear that it is), you've already wiped out the basic 1st Amendment protections because now every media outlet will need to argue, over and over again, whether or not any of its activity counts as "a legitimate press function." That would create massive chilling effects, and is a standard that could be easily abused.

Hell, just to bring this all back around, it doesn't take a stable genius to figure out what President Trump would start doing if he could argue the 1st Amendment doesn't apply to publications engaged in things that are "not a legitimate press function." And, incredibly, the DNC seems to want to hand him this very power. It's mind-boggling.

Dan Froomkin has an excellent reply to the Bauer/Goodman piece. He agrees that there may be some violations of the law buried in everything, but lumping in Wikileaks (even as he calls Julian Assange's recent activities "despicable") here is an attack on the basic 1st Amendment protections for journalists. Even if you dislike Trump massively, supporting these arguments is an attack on the press that will come back to bite everyone by handing the government and others a tool to argue that certain press activities are somehow not protected for not being "a legitimate press function."

Filed Under: bob bauer, collusion, donald trump, first amendment, free speech, press freedom, ryan goodman
Companies: wikileaks

DOJ Investigating AT&T, Verizon for Making It Harder To Switch Wireless Carriers

from the ill-communication dept

AT&T and Verizon have enjoyed a stranglehold over fixed and mobile residential broadband for years. They also enjoy a relative monopoly over broadband business data services, a market that services everything from cellular tower backhaul to ATMs. Given that both companies have a rich, deep history of engaging in all manner of dubious behavior to keep these markets as uncompetitive as possible, there would be absolutely no shortage of ammunition for regulators seeking to punish them on antitrust grounds.

Given that both companies are politically powerful campaign contributors, that generally doesn't happen, regardless of the party in power.

Which is why it's arguably entertaining to see the same Trump administration that has made it easier than ever for these companies to behave anti-competitively (net neutrality, privacy) conducting an investigation into whether AT&T and Verizon colluded to making switching carriers more difficult than it needs to be:

"The Justice Department has opened an antitrust investigation into potential coordination by AT&T, Verizon and a telecommunications standards organization to hinder consumers from easily switching wireless carriers, according to six people with knowledge of the inquiry."

At the heart of the controversy is eSIM, a technology that's supposed to make it easier than ever to switch carriers without consumers needing to buy and install a new SIM card. With eSIM, user identification technology of a traditional SIM card is instead transferred to the device's processor or modem itself. Ideally, that could let a consumer switch carriers within just a few seconds. Given that AT&T and Verizon have increasingly been losing customers to T-Mobile, they apparently worked with an industry standards group to try and defeat one of the central advantages of the technology:

"The technology lets people remotely switch wireless providers without having to insert a new SIM card into a device. AT&T and Verizon face accusations that they colluded with the G.S.M.A. to try to establish standards that would allow them to lock a device to their network even if it had eSIM technology."

Ironically this is probably among the least egregious offenses these companies have engaged in during their thirty year anti-competitive dominance, but it's an interesting paradigm shift all the same. And it's an indication that Trump DOJ antitrust head Makan Delrahim isn't the same sort of blind corporatist ideologue we've seen stumbling around elsewhere in the administration (FCC boss Ajit Pai comes quickly to mind). Delrahim's the same guy spearheading the Trump administration's opposition to AT&T's latest megamerger, a move some wondered might have been motivated by cronyism, not consumer welfare.

But with this move there's indications that Delrahim might genuinely be concerned about consumer welfare, a notable standout for an administration that's been tripping over itself to make life easier than ever for companies trying to behave anti-competitively on the broadcast and telecom fronts, whether that's the gutting of media consolidation rules to Sinclair's specific benefit, to gutting net neutrality just so regional telecom monopolies can distort a level playing field and further cash in on a lack of last-mile broadband competition.

Granted American history suggests it's more than likely this inquiry goes nowhere (Verizon says it's just a "difference of opinion,") but it's still interesting to see at least one member of the Trump administration not actively making media consolidation and monopoly power problems worse.

Filed Under: antitrust, collusion, doj, esim, switching carriers
Companies: at&t, verizon

All Out Of Ideas, Legacy News Providers Ask US Gov't For The Right To Collude Against Google & Facebook

from the failure-to-adapt dept

About a month ago, Buzzfeed's founder and CEO, Jonah Peretti summed up my feelings about watching old news media organizations running around everywhere blaming Google and Facebook for their own failure to innovate:

“A lot of the traditional media players are opportunistically attacking Facebook and Google because Facebook and Google have figured out a better model for delivering information and entertaining people which is real-time, personalised, shareable and global – all these things that you can't do in broadcast and print,” he says.

“These traditional media companies have had decades of massive cashflow and they decided to stockpile that instead of investing in digital. They just kept managing earnings on their traditional businesses even though we have known for 20-plus years that the internet was going to be a big thing and now all these things have unfolded, with some surprises but in a way that was not that hard to predict. Now we are at the point where Facebook’s and Google's revenues are starting to be a substantial portion of the pie, they are attacking them, saying it is unfair.

“The truth is that Facebook and Google have always taken a long term perspective – so has Netflix, so has Amazon – that the internet would win out in the end. A lot of the big media companies always took a quarter-to-quarter perspective, a maximise earnings perspective, and that has resulted in them being in a tough position and so they attack Facebook and Google because of it.”

This is, more or less, what we've been arguing for nearly two decades. There are a ton of opportunities for these companies if they actually embraced digital -- but they did so in drips and drabs and often stupidly chasing fads, rather than actually figuring out how to deliver content that people actually wanted in a way they wanted it. So, for the past few years, they've focused on whining about how it's so gosh darn unfair that the companies who did figure it out -- Google and Facebook -- are now making lots of money.

And... now those legacy firms are seeking the nuclear option. The News Media Alliance -- formerly the Newspaper Association of America -- has spent the last few years pushing bad idea after bad idea to try to "save" the news organizations that failed to actually innovate (for example: asking Trump to whittle away fair use). We mocked the fair use proposal as complete nonsense, but in order to make it happen, the News Media Alliance is... asking the government for a special exception to antitrust law to allow its members to collude against Google and Facebook... and to generally make the internet less interesting and more expensive.

Today, the News Media Alliance – representing almost 2,000 news organizations – called on Congress to allow publishers to negotiate collectively with dominant online platforms. The objective is to permit publishers to have concrete discussions with the two dominant distributors of online news content, Google and Facebook, on business model solutions to secure the long-term availability of local journalism produced by America’s newsrooms.

Supposedly there are three goals here: to get greater copyright control over news and to create a snippet tax, to force Google and Facebook to work with news organizations on some sort of subscription program, and to get "a fair share" of revenue and user data. None of these make much sense. As Matt Schruers at the Disruptive Competition Project points out, all three of these goals have issues:

Let’s consider those three objectives: IP protection, subscriptions, and a “fair share” of revenue and data. First, news publishers do not need an antitrust exemption to lobby for more IP protection; federal law already allows it. (As I’ve noted before, News Corp. is already quite fond of doing so.)

Second, Google and Facebook are already pursuing new strategies for supporting subscriptions. The NMA proposal, however, suggests a collective turn to subscription models, removing consumers’ ability to choose among products with different business models, including ad-supported ones. Individual newspapers should have the freedom to experiment, pursuing the model best suited to their business. Consumers are best served when they can choose between competing models.

Third, Chavern wants a “fair share of revenue and data.” In pursuit of this, the NMA would make an end-run around copyright law’s fair use doctrine, which permits the indexing of content, so as to force digital services to pay for the privilege of sending traffic to their sites. As I discuss below, news publishers have tried this in Europe. It hasn’t gone well.

There are lots of other problems here as well. As Mathew Ingram pointed out, there's tremendous hubris in the NMA members thinking that they're the only ones producing quality journalism:

This sense of entitlement is at the core of what the NMA is proposing. In effect, it is suggesting that mainstream newspaper companies are the only entities capable of producing quality journalism, and therefore they deserve a get-out-of-jail-free card so they can engage in what amounts to collusion. And they are hoping Congress will see Google and Facebook as the enemy.

Here’s a thought: What if these newspaper companies had spent a little more time trying to compete over the past decade or so, instead of relying on their historic market control to keep their profits rolling in? What if more had tried to improve their websites and their mobile versions, so that users wouldn’t install ad blockers, or turn to other solutions like Facebook Instant Articles?

Every single competitive threat the newspaper industry has faced, from Craigslist to Facebook, has been visible long before it decimated the industry’s profits, and most of the newspapers in the NMA did little or nothing to deal with them until it was too late.

Indeed, some more local news organizations are already pushing back against the NMA's plans. The Local Media Consortium, which admits some overlap with NMA members, points out that this whole thing seems like the wrong approach:

First, Chavern’s position ignores the LMC’s work during the last four years forging partnerships essential to us as providers of quality local content and local business solutions. Those partnerships align the news industry – print, broadcast and ultimately digital – with tech companies in a symbiotic relationship. The LMC has provided revenue opportunities for all levels of local media – and we’ve done that while leveraging our scale to garner both the attention and respect of the tech platforms. We have built partnerships based on shared value, not entitlement.

Second, I am concerned about the mixed messages the NMA’s stance is creating within the industry and our own LMC membership. The NMA board includes several members of the LMC, and these board members may not be fully aware of our relationship with tech companies. Chavern’s op-ed suggests a lack of knowledge of the tens of millions of dollars our partnership with Google has netted the industry, or the inroads we have made influencing innovation with Google, Facebook, Apple and Yahoo

That is, the LMC is looking at new tech and innovation as an opportunity. The NMA, on the other hand, seems to be looking at it as the enemy. This is a fairly typical response for legacy industries who failed to adapt, then flail about wildly against those who succeeded, but it's never good for consumers (there's a reason we don't allow collusion to happen after all...).

Rafat Ali probably summed all of this up best:

Look, I get it. Google and Facebook are big and successful and making lots of money. And because these news organizations failed to do much to adapt (or, at best, made superficial embraces of digital), they're pissed and they blame Google and Facebook for their own failures (not unlike the recording and film industries). But that misses the point. There's a reason why this happened, and we shouldn't have the US government reward those who didn't innovate by taxing those who did. The end result would be bad for the public. It would be bad for innovation.

And, sure, I'm saying this as a news publication that is concerned about Google and Facebook's power in the market -- but it's on me to figure out how to adapt and leverage the benefits that platforms like that (and others) bring. Not to go running to the government seeking to collude with others and to cement weak business models in place. Frankly, for companies seeking to blame others rather than their own failures, it's probably best that they go out of business sooner, rather than later. Clear the field for others who are willing to innovate and embrace technology, rather than whine about it.

Filed Under: antitrust, collusion, competition, innovation, news, newspapers
Companies: facebook, google, news media alliance, newspaper association of america, nma

AT&T Settles With DOJ Over LA Dodgers Channel Collusion Allegations

from the competitors-playing-too-nicely dept

In 2013, Time Warner Cable (since acquired by Charter Communications) struck an $8.35 billion deal with the LA Dodgers to create LA SportsNet, the exclusive home of LA Dodgers games. To recoup its investment, Time Warner Cable demanded exorbitant prices from competing cable providers if they wanted access to the channel. Unsurprisingly, all of Time Warner Cable's competitors in the region balked at the $5 per subscriber asking price.

Several years later, a massive portion of Los Angeles still can't watch their favorite baseball team, since Time Warner Cable's asking price not only kept competing cable operators from delivering the channel, but prohibited over-the-air broadcasts of the games.

Last November, a new wrinkle emerged in the standoff after the Department of Justice sued AT&T (now owner of DirecTV) for being a "ringleader" in a collusion effort involving the channel. The DOJ effectively claimed that DirecTV, Cox, and other regional cable providers violated antitrust law by sharing private company data during their coordinated effort against Time Warner Cable's exclusive arrangement and higher rates. The original complaint stated that this "unlawful information exchange" violated consumers' rights to fair channel price negotiations:

"As the complaint explains, Dodgers fans were denied a fair competitive process when DIRECTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team,” said Deputy Assistant Attorney General Jonathan Sallet of the Justice Department’s Antitrust Division. “Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace."

Fast forward a few months and a new administration, however, and the Department of Justice has announced that it has settled its lawsuit against AT&T. According to the DOJ, AT&T has agreed to monitor its employees so they do not illegally share information about sensitive contract negotiations with competitors. This, the DOJ states, should wind up being a boon for consumers:

"When competitors email, text, or otherwise share confidential and strategically sensitive information with each other to avoid competing, consumers lose,” said Acting Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “Today’s settlement promotes competition among pay-television providers and prevents AT&T and DIRECTV from engaging in illegal conduct that thwarts the competitive process."

And yes, it makes sense to enforce existing antitrust law prohibiting covert collusion between companies. The problem, of course, is that nothing in the settlement fixes the original issue of Los Angeles residents being unable to actually watch these games due to Charter's exclusive deal with the Dodgers. Nor does it address the fact that cable providers increasingly pad consumer bills with "regional sports fees" that pay for these networks (which they often already own), but are designed to help providers falsely advertise a lower rate at the point of sale (something regulators truly couldn't care less about).

So while the settlement slaps the wrists of companies that technically broke the law to do battle with Charter's exclusive arrangement, nothing about it really makes things arguably better for the consumer. And with the DOJ's new incoming antitrust boss having formerly lobbied for both AT&T and Dish Network (he's previously supported AT&T's $85 billion plan to acquire Time Warner) the all-too-familiar anti-consumer dysfunction bone-grafted to the cable and broadcast sector isn't likely to evaporate anytime soon, even with the added benefit of streaming competition.

Filed Under: baseball, collusion, la sportsnet, merger, sports, tv
Companies: charter, dodgers, time warner cable