When consumer choice is not enough: Dishonest Relationship Misinformation (DRM)

When I discuss non-owner locks ontechnology and anti-competitive locks on content, the two highlycontroversial forms of so-called “Digital Rights Management”,a common question comes up: If I don't like these things, why don'tI just not buy them and be done with it?

While I have historically beena firm supporter of consumer boycotts, I do not believe they can beeffective in this case for a number of important reasons. I am alsoa strong supporter of free markets, but in this case I also do notbelieve that markets alone can solve the problems — partly because Idon't believe we have a free market scenario.

Non-owner digitallocks

Lets start with non-ownerlocks on technology. I have called this DishonestRelationship Misinformation (DRM) because we have ascenario where people are buying something, but where they are notexpected to retain ownership-like rights. To me it is obvious thatif I own something that it is me, and not someone else, thatmaintains the keys for any locks applied to what I own. I may offera spare key to other people, and in some cases this may be a propertymanager that manages the property on my behalf, but it is still theowner that controls who has these keys.

Non-owner locks on technologyare based on the idea that the manufacturer of the device, not theowner, should control who has keys to the locks they have applied. One interpretation of anti-circumvention legislation promoted by somespecial interest groups is to suggest that it should be illegal forthe owner of the device to remove this non-owner lock and apply theirown.

This is clearly backwards:what should be illegal is for someone other than the owner to apply alock and then not pass the keys to the owner when the property issold. To do otherwise is to ignore hundreds of years of precedent inhow property works not only in the legal community, but also how thegeneral public understands the concept of property rights.

The general public understandsthe concept of rental, where someone other than the owner makes useof the property while the owner retains ownership rights. Alongwith property law we have a whole body of law that sets out therights and responsibilities of both the owner and the renter, andthis model is generally understood by the general public at large.

It is unreasonable for DRMproponents and apologists to expect the general public or people inthe legal profession to understand this brand new type ofrelationship that is neither ownership nor rental. While I avoid the”purchase” of products that have non-owner locks on them, Ithink it is obvious that this has little to no impact on the marketas a whole. It would also have little to no impact on the radicalchanges being proposed to our legal system when it comes to propertylaw.

This departure from propertylaw is unnecessary as the long established rental arrangementprovides all the flexibility needed for the legitimate business modeloptions being contemplated by the content and technology industries. What we should be doing is strengthening the legal protection forowner applied digital locks, including in rental situations where itshould clearly be illegal for a renter to circumvent a lock ontechnology which they do not own.

The term DRM is also used torefer to activities which do not involve non-owner locks, but varioustypes of locks on things which people do own. A membership-requiredsite uses a variety of technological measures to ensure that onlymembers are able to access their site. I believe that our lawsshould make clear that breaking into such sites is illegal. This isa combination of property and electronic commerce laws, two areas ofprovincial jurisdiction that could use some modernization.

This protection of propertyrights, itself provincial law, should be seen as parallel to federalcopyright law. While legal protection of owner-locks can be used toprotect the interests of copyright holders, they should be protectedregardless of whether there was a copyright infringement involved inthe circumvention of these owner locks. This is an entirelydifferent conversation than discussions around 1996 WIPO treatyratification where the anti-circumvention rules added to copyrightlaw should only apply to circumvention which directly relates tocopyright infringement.

To be clear, while I believethat non-owner locks should be illegal, and owner locks should beclearly legally protected, that this protection should happen outsideof federal Copyright law. It is areas of provincial jurisdictionwhere the appropriate legislation should be modernized.

Anti-competitivelocks on content

I consider disallowingnon-owner locks on technology to be a pretty simple protection ofproperty rights, justified for all the same reasons our societyrecognizes other property rights.

I understand why a widevariety of groups have different opinions on anti-competitive lockson content. The question here is whether copyright holders shouldhave a brand new right to dictate what brands of technology theirworks can be accessed with, and whether this is helpful or harmful atprotecting the rights of these same copyright holders. I think thatan answer to the second part of that question is an answer to thefirst.

I have seenno evidence to suggest that dictating brands of technology has or canhelp the financial interests of copyright holders. While there is alot of hand waiving, all the evidence I've seen suggests that theselocks are taking money out of the pockets of creators. These locksmake the content less valuable to audiences, and thus fewer arewilling to pay. These locks also threaten artistic control as wellas business model control. I believe that in order to protect therights and interests of copyright holders that this new right shouldnot be added to Canadian Copyright, even if in the short term somecopyright holders appear to be asking for it.

I can use myself as an exampleto illustrate part of the answer. For reasons which should beclear from my views on non-owner locks, I will avoid the ownership oruse of technology that has non-owner locks applied to them. Acopyright holder that locks their content such that their content canonly be opened with non-owner locked devices has excluded me as apotential customer.

Telling me that it ismy choice to not consume content only provided onbrands of devices I do not own is backwards. This is like tellingsomeone that they are free to vote for anyone they want, but that theonly legal options are from the Communist party. That is not achoice, but the removal of choice.

For other audiences theevaluation may be different. They may own a variety of brands oftechnology, some non-owner locked and some not. For them it is clearthat content that is interoperable with all their devices is morevaluable than content that only works on one. They will expect adiscount on content that only works on a subset of their devices. This discount is unlikely, especially considering it costs thecopyright holders more money to lock their content (fees to licenseDRM technology) than to leave it unlocked and interoperable with alldevices.

We have a problem with thestatistical models being used by creative industries to indicate thehealth of the industry. If you look at the statistical methodologythere is no differentiation made between copyright infringement,consumer boycotts, or market failures where people aren't buying forother reasons (inadequate value for money, not available on owneddevices, etc). All the statistics show is that people aren't buying,and there is no way for copyright holders who blindly believe thatinfringement is the only problem to realize that it is things undertheir own control that may be the primary cause of declining revenue.

This reduction in the valueand marketability of content is one way that theseanti-interoperability locks take money out of the pockets ofcopyright holders. While I believe this costs copyright holders morethan infringement does, I don't consider it the greatest threat.

Few television viewers thinkabout the traditional business model of commercial television. Themodel is to sell eyeballs (viewers) to advertisers. The productisn't copyrighted works being sold to viewers, but viewers being soldto advertisers. The supplier of the most relevant service is thetelevision network, cable and satellite companies. Copyrighted worksare a business expense to these suppliers, used to grow the size oftheir product (viewers) to their customers (advertisers).

Anti-competitive locks oncontent threaten to cause a transformation of traditional retailcontent distribution from where the product is the content and thecustomer is the audience, to one where the product is the audienceand the customer is the copyright holder. If a small number oflocked platform providers are able to dominate the distributionnetworks for copyrighted works it will then be these platformproviders, not copyright holders, that are in control of the businessmodels. Copyright holders will have to give in to the demands of theplatform providers if they wish to receive any remuneration at all.

This transformation is alreadyhappening with companies like Apple who are able to dictate terms toan ever increasing number of copyright holders. In the past it wasonly software authors, and then with iTunes they were able toconvince large parts of the music industry to sign on. With newcontent types being added to Apple's platform, we now see exampleswhere cartoonist Mark Fiore nearly had his works censored by Apple. Apple backed down when this became widely publicized, but if we allowthis type of platform control to dominate we will have effectivelyeradicated artist freedom.

Beyond issues of censorship,it should also be obvious that it is the platform providers thatdetermine pricing and other aspects of the economic interests ofcopyright holders, not the copyright holder.

At this relatively earlystage, artists still have the freedom to move elsewhere. We still atthis moment have communications technology in the hands of citizenswhich do not have non-owner locks applied to them, and artists whoaren't already being dictated to by publishers/labels/etc can opt tosell to these people and not those locked in by a platformmonopolist.

I don't think this will last,if current trends continue. I don't think that individual artists orindividual consumers will have any weight in protecting their rightsand interests if a large proportion of fellow artists and/orconsumers remain unaware of the threats.

Canada has a federal CompetitionAct and a CompetitionBureau set up with a recognition that sometimes thegovernment needs to step in to protect free markets when traditionalmarket forces are insufficient. In addition to not adding a newbrand dictating restriction to Copyright, I believe that we shouldmodernize our competition law to protect the creative industries fromthese practices. The Competition bureau has thus far focused far toomuch on price as an indicator of market failure, and needs to look atadditional indicators that would take other anti-competitive threatinto consideration.

It should be obvious thatconsumer choice is not adequate here, considering that many creatorshave been convinced that “more copyright” is good for them,and that a new brand-dictating right will help them. I believe thatby the time they realize the threat, if ever, the damage to creativeindustries will be massive.

I consider the wiping out muchof the creative industries to be bad for anyone, so is not somethingI believe we should allow to happen. Relying on consumer choicealone is a do-nothing approach that should be dismissed.

Russell McOrmond is a self employed consultant,policy coordinator for CLUE:Canada's Association for Free/Libre and Open Source Software,co-coordinator for Getting Open Source Logic INto Governments (GOSLING),and host for DigitalCopyright Canada.

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