Ex-DOJ Officials Raise Trump, AT&T Merger Interference Concerns

from the do-the-ends-justify-the-means? dept

Last fall, the Department of Justice announced it would be suing to block AT&T's $86 billion acquisition of Time Warner. According to the DOJ, it sued to block the lawsuit to protect consumers, arguing that the deal would likely make it harder for streaming competitors to license the content they need to compete with AT&T (especially HBO programming). Consumer advocates have long argued that AT&T (with its decade of well-documented and often comedic anti-consumer behavior in tow) would simply use its greater leverage and power to hamstring competition and jack up rates for consumers (especially with net neutrality dying).

While some have argued that the DOJ is simply following antitrust protocol, others (including AT&T lawyers) think the lawsuit is driven by other motivations.

That's not a hard case to make given the Trump administration's anti-consumer, anti-innovation, and anti-competition tendencies on other fronts (like net neutrality). Trump's pick to head the DOJ's antitrust division, Makan Delrahim, was also on record, before joining the DOJ, stating he saw no real problems with the deal. Meanwhile Trump's disdain for Time Warner-owned CNN is also well established, and reports have indicated that Trump pal Rupert Murdoch spent much of last year trying to scuttle the deal for competitive reasons (Muroch has also approached AT&T twice about buying CNN).

Adding fuel to this fire was a bipartisan group of ex-DOJ officials (from US Attorney Preet Bharara and Nixon White House counsel John Dean) that, last week, filed an amicus brief with the court urging an inquiry into whether any potential laws were broken. The brief doesn't even mention Murdoch, and instead focuses on the obvious, inherent problems in scuttling a merger just because the President doesn't like one of the media outlets involved:

"While any improper use of government authority to punish critics or reward supporters would pose a grave threat to our constitutional system, that threat is particularly acute in a situation in which the government uses or appears to use its regulatory authority to punish media entities or others who are critical of the government. Such behavior could chill criticism, endangering the kind of free and open speech and debate that our Founders adopted the First Amendment to protect precisely because it is necessary for self-government."

While that's true, Bharara's specific objections here are somewhat rich for him personally, given that during his tenure he seized domain names and refused to return them -- only giving them back once it was abudantly clear he wasn't going to win in court. Bahara's office also issued a gag order over a subpoena to Reason just because a few folks said some mean things about a Judge.

Regardless, hoping to use these concerns to defeat the DOJ lawsuit, AT&T lawyers have been busy trying to get a hold of evidence proving that the Trump administration pressured the DOJ to try and derail the lawsuit. But late last month Judge Richard J. Leon rejected AT&T's request for detailed email and phone logs between the White House and the Justice Department related to the deal, forcing AT&T to scuttle that angle of their legal defense. Needless to say, whichever way this ruling goes could have a profound impact on the media, broadband, and advertising markets for years:

"If the judge sides with AT&T and Time Warner, he would usher in the creation of a new kind of corporate behemoth — one with nationwide reach via wireless and satellite television service that would also have control over a movie studio and channels like HBO, CNN and TNT, which has valuable basketball sports rights. The company would have a leading position to negotiate licensing deals with rival telecom and media firms. It would also be in a stronger position against fast-growing streaming video services like Netflix and Amazon Prime Video."

Questions over the DOJ's actual motivation here have created an interesting conversation over whether the ends justify the means, even if the motivation is cronyism and not consumer welfare. Whether the deal should be blocked has become increasingly relevant in the wake of the Trump FCC's attack on net neutrality, a move that could open the door to all manner of "creative" efforts by a bigger, more powerful AT&T to hamstring competition in the media space, should the deal be allowed to proceed.

All told, we've ironically got the Trump DOJ breathlessly claiming it's trying to protect consumers from a bigger, badder AT&T, while the Trump FCC empowers AT&T to engage in more anti-competitive shenanigans than ever before -- with no sign that anybody in government realizing they're operating at cross purposes if "consumers" really are the driving motivator. The Justice Department’s antitrust lawsuit against AT&T and Time Warner, filed back in November, is scheduled to go to trial on March 19.

Filed Under: doj, donald trump, interference, john dean, merger, preet bharara
Companies: at&t, time warner

Feds Respond To Rojadirecta's Challenge To Domain Seizures: If We Give It Back, They'll Infringe Again

from the do-they-not-understand-the-internet dept

Last month, we were the first to report on the fact that the Spanish company Puerto 80 had petitioned the US government to have it return its domains, which were seized, under questionable reasoning, by Homeland Security's Immigration & Customs Enforcement (ICE) division. The government, who as detailed in that petition has been trying to avoid any kind of legal fight, first got the court to allow it to delay filing a response. But the time finally ran out, and the Justice Department, led by US Attorneys Preet Bharara and Chris Frey -- who have been the DOJ pointmen on these seizures -- have officially responded, claiming that the domains should not be given back or (*gasp*) infringement might occur again!

As we've come to expect with pretty much every move by the government related to seizing domains and censoring websites, this filing again suggests that the government is either taking questionable shortcuts in its descriptions of how things work, or (even worse) doesn't seem to understand the fundamental technology at play. The response first complains about the method used to challenge the seizure (calling it "extreme"), leaving out the fact that the government left Puerto 80 with basically no other choice, given its earlier actions and failure to respond in a timely manner to requests from Puerto 80's lawyers. From there, however, it just begins repeating some of the more questionable claims. For example, while it first admits that the files do not live on Rojadirecta at all, it still claims that the infringement occurs on the site. They do this in the same paragraph, separated by a single sentence:

Because the content ran on a live stream from another website, the selected show did not start at the beginning of the program; instead, the program ran from whatever particular point the show was presently at in the stream. Moreover, the event broadcast was shown in real time and was the same broadcast as the authorized broadcast of that same event. However, these broadcasts over Rojadirecta were not authorized by the relevant copyright holders.

But, that's wrong. The broadcasts do not occur "over Rojadirecta." The infringing content never touches Rojadirecta's servers in any way, shape or form. The main focus of the discussion, as in the original petition, is whether or not Puerto 80 satisfies the key points to have seized property returned. Puerto 80 believes it does. The Justice Department does not. It will come as little surprise that I side with Puerto 80 here, and find the Justice Department's statements on this point incredibly misleading.

The key point in the law as to when seized property should be returned is if there's little likelihood that the property won't be available for any future trial. That's the main point behind seizure laws and it's why we find this whole censorship campaign so ridiculous. It's abusing a law, designed to be used to stop the destruction of evidence, against evidence that cannot be destroyed. The second key point is whether or not keeping the property creates "substantial hardship." The government, of course, claims no such hardship. Stunningly, the government appears to not believe that stamping on one's First Amendment rights represents "substantial hardship." In fact, the Justice Department (who we thought were supposed to be interested in protecting the First Amendment rights of people) says that such prior restraint is not a substantial hardship at all. It also suggests that a First Amendment claim should be filed differently.

Even more bizarre is that the government seems to be claiming that, because it stalled so much in responding to Puerto 80's lawyers, returning the domain at this point wouldn't matter. Talk about circular logic:

Moreover , given the passage of more than five months from the Government's seizure, a return of the Rojadirecta Domain Names is unlikely to matter to the overall traffic the website receives.

Not surprisingly, the DOJ cites the favorite talisman of supporters of these seizures: Arcara vs. Cloud Books, which allowed the shut down of a bookstore because prostitution was taking place there. The problem is that Arcara explicitly states that it does not apply to activity that involves expressive conduct. The DOJ doesn't mention this, but clearly tries to get around it with the guffaw-inducing claim that copyrighted content is not expressive conduct (say what now?):

Indeed, it is clear from the record before this Court that the Government's seizure of the Rojadirecta Domain Names was prompted by enforcement of the criminal copyright laws, and not as regulation of speech or other expressive conduct. As such, the seizure is not properly viewed as a prior restraint. See, ~, Arcara v. Cloud Books, Inc., 478 U.S. 697, 706 n.2 (1986).

Next up, the government tries to claim that it shouldn't give back the domain, because Puerto 80 will simply use it to infringe again, and then makes some more questionable statements concerning criminal copyright infringement. Take this for example:

Moreover, Puerto 80' s attempts to liken itself to an Internet search engine is wholly unavailing. Unlike a search engine or other site that aggregates links to existing content neutral material on the Internet, Rojadirecta organizes links to very specific content in a precise and targeted way.

Wait, what? So any specialized search engine is not a search engine?!? Are these guys nuts? Google's book search? Not search. Youtube search? Not search! After all, they organize links to very specific content in a precise and targeted way.

Furthermore, the government lays out it's ridiculous claim that failing to stop infringement is itself infringement:

In linking to this content, Puerto 80's failure to "stop an infringing copy from being distributed worldwide constitutes substantial participation" in distribution of copyrighted material. Cubby, Inc. v. CompuServe, Inc., 776 F. Supp. 135, 141 (S.D.N.Y. 1991).

But that seems to go directly against the DMCA and general basic principles of applying liability to those who actually commit the acts of infringement, rather than third party service providers. The claim that failing to stop infringement constitutes substantial participation seems to go against substantial caselaw that argues exactly the opposite.

Next, quite incredibly, the government tries to make the case that the infringement is willful. This seems like an impossible mountain to climb, given that the Rojadirecta sites were twice found legal by Spanish courts. Clearly, being told by courts that what they're doing is legal would suggest that the operators of the site believe what they're doing is legal.

Finally, to prove "financial gain," the government claims that they have evidence that Rojadirecta earned "thousands of dollars since 2005" from Google AdSense. Um, wait, seriously? In six years, they most they can dig up is "thousands of dollars"? Do they not realize how much it costs to run servers for a popular website? The idea that "thousands" (not even tens of thousands) of dollars earned over a six year period represents "profits" is laughable, and (once again) displays the government's basic lack of knowledge about these issues.

Of course, courts do tend to grant the government plenty of leeway in these kinds of cases, so I wouldn't be surprised to see the judge reject the basic petition, but allow these issues to be raised separately in the separate lawsuit that the government filed... four days after Puerto 80 filed the petition. Yes, pretty much as we'd heard from various domain holders who had tried to communicate with the feds about their censorship and domain seizures, they were warned that trying to get back the domain would lead to a lawsuit filed against them... and that's exactly what happened here. This is a shameful abuse of power by the US government. It's a blatant attempt to censor websites prior to any communication or fair trial, contrary to the very basic principles of the guarantees of free speech or due process. All because some entertainment industry folks can't get their act together and understand technology. Preet Bharara and Chris Frey must wake up each morning proud of the fact that they've "protected" various sports leagues from having to give customers what they want, by basically trampling on the US Constitution they're supposed to be upholding.

Filed Under: chris frey, copyright cops, domain seizures, justice deparatment, preet bharara
Companies: puerto 80, rojadirecta