Monday, August 31, 2009

Congress, The RIAA and Your Rights

I despise the Recording Industry Association of America (RIAA) and their paid whores in Congress. I despise them because of what they’ve done to our judicial system.

The Music Industry Acted Stupidly

As you know, the music industry was caught flatfooted by the invention of the internet. As people learned to upload their music onto their computers, it was obvious to everyone that they would soon be passing those files around. This was the moment of opportunity for the music industry. If they embraced the new technology, by creating websites like iTunes, most people would have happily begun legally downloading music one song or album at a time.

But the music industry, like most oligopolies, didn’t want their profit model to change. They liked charging people almost $20 for cds that contained one worthwhile song and a whole bunch of crap. They didn’t want people picking and choosing which songs they wanted: “Heaven forbid that Britney Spears fans begin paying only for two songs, we might have to improve our product or lower our prices!”

So they fought the technology. And as they pushed against the waves of progress, they learned what all stagnant oligopolies learn, if you don’t change with the times, you die. Soon millions of people were illegally downloading music. Then it was tens of millions. Then hundreds of millions. Then disaster struck: so many people had gotten so used to downloading music for free that it became culturally acceptable, world-wide, to download music for free. The music industry had blown it. They had ignored consumer desires for so long that consumers moved on to something else.

Now don’t get me wrong. I’m not defending downloading. This is stealing. Absolutely. People who download copyrighted music are violating the copyright holder’s rights. There is no disputing that. But what happened next was despicable.

The Music Industry Visits A Prostitute

When the music industry lost its war against downloading technology, it decided to try to stop people from downloading files. But that’s a difficult prospect under the state of modern copyright law. So the music industry struck upon a bright idea. If they could buy enough Congressmen, they could change the law. And so they did. Before contribution laws were changed, the television/music industry contributed $18.7 million dollars in “soft money” to political candidates in 2000 and $27.7 million in 2002. They also gave (and continue to give) “hard money” to Republicans and Democrats alike.

And Congress delivered. First, Congress passed the Digital Millennium Copyright Act (DMCA) in 1998, which gave the RIAA the power to file subpoenas to seek the identity of downloaders without notifying the downloaders, without needing to go through a court, and without presenting any proof -- the mere allegation of infringement was enough. This is a serious break from 1000 years of Western jurisprudence, which has always required that anyone be notified before they can be sued, so that they have a chance to defend their rights. This also violates the fundamental principles that plaintiffs must provide some proof to a court before the plaintiff can avail themselves of judicial powers. But what’s a 1000 years of law when compared to a lobby with a lot of money that wants a little something special put into the law for them?

Yet, even this was not enough for RIAA. All this let RIAA do was spy on you. When it came to suing you, RIAA still could only do what you and I can do now, that is to sue the infringer to get a court order enjoying them from further infringement and collecting damages. RIAA wanted more. So they went back to Congress.

Once again, Congress delivered. This time they passed the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999 (“Digital Theft Act”). This act set statutory levels of damages for downloading in the amount of $750 to $150,000 per song. This is rotten, and again is largely unprecedented under the law.

Now, many of you are no doubt saying, “well, these people shouldn’t be stealing.” And I agree with that. But think about this.

You all know the stories of people who go into grocery stores, pretend to fall down, and then threaten to sue. This works because it is cheaper and safer to pay these people a small sum rather than defend the suit (which can cost tens of thousands of dollars) and run the risk of a huge verdict. “Frivolous suits” against doctors or manufacturers work the same way. These are called “strike suits,” where the plaintiff threatens to sue or actually sues, with the intent of being bought off. Again, these plaintiffs know that it is simply too expensive and too risky to defend against these suits, even when they clearly have no merit. Thus, they sue for a large sum, but offer a small settlement that makes it cheaper to buy the plaintiff off rather than defend the suits.

The Digital Theft Act Leads To Insane Verdicts

What Congress did with the Digital Theft Act was to give the RIAA the right to file such strike suits against individual Americans. Consider this. If you are sued by the RIAA, you no longer face the chance of being enjoined from downloading music and having to pay some level of compensation commensurate with what it would have cost to buy the music you downloaded (and possibly attorneys fees). Instead, you now face the prospect of losing hundreds of thousands of dollars.

And that’s how this law has worked out. In RIAA v. Tenenbaum, the jury awarded $675,000 for 30 songs being downloaded. In RIAA v. Thomas-Rasset, the jury awarded $1.92 million for 24 tracks. There are many more. Since the law passed, RIAA has brought more than 30,000 suits. The exact number is not known because the bad publicity from these suits made the RIAA reconsider announcing their numbers.

This situation is so out of control that one judge, who awarded the RIAA $220,000 against a single mother of two who was found liable for downloading 24 songs, implored Congress to revise the Digital Theft Act to lower the statutory penalties. In 2006, the Eastern District of New York, a Federal District Court, found the statutory damages to be unconstitutional because the actual harm to the RIAA was only $0.70 per song. However, this suit was dropped before it could proceed, which coincidentally keeps that decision from having any real precedential power.

The Real Problem Is The Potential For Extortion

But the problem goes much deeper than the suits. Because people face these potentially huge verdicts, and because most people can’t afford what it costs to defend these suits -- and they can’t find lawyers who are as knowledgeable of the law as the RIAA’s lawyers who wrote the thing, people tend to settle rather than fight. To encourage settlement, RIAA sent each person they targeted a letter noting the potential damages and then proposing to settle the matter for around $11,000. Naturally, this has been effective. In 2003, when the RIAA had only brought 231 suits, it had already settled with 28,000 people. Most of these settled for around $3,000, with RIAA apparently accepting payments by credit card.

This is exactly how strike suits work. Even the numbers are similar. “I’m going to sue you for a million dollars, but I’ll settle right now, quietly, for $11,000. It will cost that much just to get a lawyer.” This is no different that the slip and fall plaintiff who pretends to fall down in your store.

There Are No Safeguard To Prevent Abuse

And lest you think there are safeguards to make sure that only people who actually download are being sued, the RIAA’s poorly targeted approach has been quite well documented. They have sued dead people, and demanded settlements from families. They have sued little old ladies for downloading gangster rap. They have sued people who don’t even own computers, and who didn’t have internet service.

The RIAA knows that some of the people they target are innocent, and they don’t care. Said one RIAA spokesperson, “when you go fishing with a driftnet, sometimes you catch a dolphin.”

What’s even worse, they have used abusive tactics and they have rarely backed off, even when presented with proof that the person they targeted was innocent. Take the case of Mrs. Sarah Ward, a 66 year old sculptor accused by the RIAA of sharing gangsta rap. Even though the RIAA learned that this woman did not listen to gangsta rap and cannot even run the service on which they claim she was file sharing, because it was not compatible with Macs at the time, the RIAA dragged their feet about dismissing the suit (which should not even have been filed), and then issued the statement that they would “reserve the right to refile the complaint against Mrs. Ward if and when circumstances warrant.”

Or consider the case of John Paladuk, who was accused of downloading files in Michigan, even though he lived in Florida at the time and had suffered a stroke that left him paralyzed and disabled. Despite this knowledge, the RIAA sued him. Or the case of the college student who was sued because of downloads that occurred two to three years prior to her moving into that room; again, the RIAA demanded a settlement under threat of suit.

Now new groups are starting to use the Digital Theft Act. Recently, it was learned that a vendor of hard-core gay pornographic videos, Titan Media, was using the same process employed by the RIAA. Titan contacted their targets and offered the choice of either being named in a lawsuit or of purchasing the Titan videos in exchange for “amnesty.”


All of this is obscene. The Congress has given these industries powers to extort money from any American they choose to pick. This not only tosses aside 1000 years of carefully developed legal principles, but it flies in the face of everything Americans believe about justice and law. Congress has allowed the RIAA to make a mockery of the court system. Congress should repeal this law immediately.


LawHawkSF said...

I hope this isn't just the warning shot regarding what the government can do with the internet. Imagine the Obamists getting the power to "slapp" down everyone who goes on the internet to protest administration policy. If a private group which owns a few congressmen can do this to American citizens, imagine what an organized effort by the government itself could do. And I certainly don't picture Eric Holder raising the First, Fourth, Fifth or Sixth Amendments as an issue which should squelch such harassment.

ScottDS said...

A little story with redemption at the end... :-)

I remember in high school (I graduated in 2001) when my friends started downloading music. One friend told me about this program called Napster and how you could find music and movies for free. I thought it sounded interesting but it wasn't for me. Even though I wasn't a big music person, I still enjoyed the experience of going to the store, buying the album, reading the liner notes, etc.

That all changed in college. The dorm at FSU had such a fast connection speed that I started downloading... mostly film scores of course :-). Napster was over by that time but LimeWire and Direct Connect proved to be very good resources.

I stopped downloading from these sites when I got my iMac. It was (and still is) such a nice machine, I didn't want to "corrupt it" by illegally downloading music. One of my roommates in LA showed me a Russian website where you could download tracks for $.15 each. I'm still not sure if the site was legal or not. (I'd say not.)

Last year, I got a conscience all of a sudden! :-) I decided to replace all of the illegally-downloaded albums with legitimate copies, either via trade, eBay, or I'm proud to say that, as of two months ago, every legally-available album I own is a legitimate copy and NOT a download.

AndrewPrice said...

Lawhawk, What really bothers me about this is how easily our Congress just warped the law to give a special favor to an interest group. The law is meant to be for everyone, not for the connected few to use as they see fit.

I guess the message is, be as foolish as you want to be. If you are connected, Congress will do whatever it takes to bail you out.

Come to think of it, that sounds a lot like GM. . . and the banks. . . and the unions. . . and everyone else. :-(

AndrewPrice said...

Scott, I use downloading mainly to decide if I like something. Since nothing good gets played on the radio anymore, I'm always looking for music in places like commercials or movies, etc. But those are only snippets. So I go online, download the whole song, and decide if I really like it or not. If I do, I'll usually get the album. If not, I'll just delete the song.

But I firmly blame the music industry for their downloading problem. First, they fought for years to make sure that people had to buy whole albums. Then they fought every innovation which could have helped them. I have no sympathy for that.

Even now, they put out fake numbers about the cost of downloading, rather than addressing the real issue -- which is that they are turning out the same generic crap they've been turning out for twenty years now.

And I really don't like anyone who gets special rights handed to them by the government.

Writer X said...

Andrew, not completely the same, but the publishing industry is going through some of the same things with book downloads to devices like Kindle. There is some resistance by some of the publishing companies to "get with the 21st Century." A book download, however, isn't necessarily a whole lot cheaper than buying the real thing. It's the new bucking horns with the old.

Regarding CDs, I can't remember the last time I bought one.

AndrewPrice said...

Writer X, I didn't think the Kindle was going to catch on, for a lot of reasons. But it seems to have caught on really quickly.

I'm buying fewer and fewer cds -- almost none at this point actually.

Writer X said...

I've resisted the urge to buy a Kindle (or Sony reader). I still like the feel of a book in my hands.

BTW, when I call CDs "albums," my 10-year old nephew calls me an "oldie." Old habits are hard to break.

AndrewPrice said...

Writer X, I read so much on computer that by the time I get around to pleasure reading, I also prefer paper. I like books, pure and simple. But I do understand the Kindle appeal.

Someday your nephew will be called an oldie for mentioning cds. In fact, all of my music now resides on harddrives, the cds live in a box.

I do miss albums. I love listening to albums like anything from Pink Floyd, where you start the album up and listen all the way through because it all works together. I'm not even sure anyone does that anymore. Everything now seems to be a collection of singles.

Writer X said...

Andrew, and who can forget albums that came with posters? ;-)

Instead of albums, now we have "playlists." Although, it is nice to buy the song that you want, just like you said, rather than a CD with mostly mediocre songs and only one or two that you really like.

MegaTroll said...

I completely see the extortion aspect. I think I agree that they shouldn't start setting up different rules for different people.

AndrewPrice said...

Mega, I agree. I don't think the Congress should be creating special laws for anyone. Law should be the same for everyone or it isn't law.

Tennessee Jed said...

well, I have given you my thoughts on Sony and their embedded spyware, all an over reaction to the problem. I didn't realize the extent of the abuse suits, so thanks for bringing that out. To say the music industry has acted stupidly is putting it mildly. Since it is almost 1:30 a.m. and I have just finished off a sensational Napah Syrah while listening to some nice Peter Green blues and looking at the moon glinting of the Little Tennessee, and I value my comments as being somewhat reasonable, I will limit my comments to saying it is frightening to see how our government is so totally in the hands of special interests . Bon soir to my my Commenterama friends. Good post, Andrew!

Gordon Winslow said...

I still buy CDs, for two reasons:

1) I know I'm supposed to back up all my digital stuff, but like most people, I don't do it often enough. If my hard drive crashes, I still have my music.

2) MP3s don't sound all that great. Don't get me wrong--I mostly listen to ripped MP3s for convenience reasons. But at some point storage space will increase to where my hard drive can contain my thousand or so albums in a lossless format. I can re-rip the CDs at that point, rather than having to spend an ungodly amount of money to repurchase thousands of MP3 files in a lossless format.

StanH said...

The music industry is sadly at deaths door. Things like this from RIAA are the death pangs of an industry that once was. All but a few bands now almost exclusively earn from live concerts, and thus an artist/musician hardly takes the time for real songwriting. There are some great new bands that will not be able to permeate because of the clutter that’s on the internet. Conversely some are getting play that never would because of the internet, what are you gonna do.

On the Kindle, we bought our daughter one a couple years ago, she hardly uses it but still prefers the real thing.

AndrewPrice said...

Thanks Jed. I do recall your point about Sony and I think that is another example of corporate stupidity. I will not use products that spy on me or try to control me.

Gordon, I keep all of my music on hard drives now, but I still keep the cd backups for the same reason you state.

AndrewPrice said...

Stan, I agree about the music industry. I think the industry has been stagnant since the mid-1990s. And the more they consolidate, the fewer new acts that get to break through.

And I think that issues like their obsession with piracy are all about excuse making for poor product and poor executive decisions. They should stop whining and find new ways to get good new music to people -- because radio play isn't working.

On the RIAA, I wanted to include data on how little of the proceeds of these suits went to the artists, but I couldn't find anything reliable. I've read though (but I cannot verify this) that none of the money has gone back to the artists.

The kindle strikes me as a great way to get the daily paper if you're a commuter. I wouldn't want to sit down to read a good book with it. But more and more people are.

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