How Silicon Valley’s Capitalist Greed Continues to Cheat Creators and Rob American Culture
First, they came for the music, and we did not speak out—because most of us are not musicians.
Then they came for the news, and we did not speak out—because most of us are not journalists.
Now they’ve come for our democracy, and maybe, just maybe, Americans are finally waking up to Silicon Valley’s power and impact on intellectual property, a free press and our democracy.
As the country wrestles with rampant misinformation and the growing reach of Silicon Valley, there has been much talk of Russia, monopoly, algorithms, and the need for more fact-checking and moderation.
A few weeks ago, in response to yet another problem with children’s content and comments by pedophiles on YouTube, it was announced that “YouTube plans to have 10,000 people dedicated to reviewing videos in 2018—though it would not to say how many workers it has doing that job now.”
I argue the system is broken at its core, driven by two rarely discussed laws passed 20 years ago that freed Silicon Valley from accountability for copyright infringement and defamation and wreaking havoc, first for copyright holders and then for news organizations, ever since.
In 1996 Congress passed the Communications Decency Act (CDA) and in 1998 the Digital Millennium Copyright Act (DMCA)—long before Facebook, Twitter, Instagram or YouTube existed. The laws effectively gave Silicon Valley a “get-out-of-jail-free” card allowing them to disregard long-standing laws and protocols governing intellectual property, media consumption and news, fueling growth at a scale only possible with such blanket immunity.
Silicon Valley called it “disruption,” arguing the laws were necessary to achieve goals of a better society. Instead, they set off an often-arrogant disregard of content creators and news organizations. The rules publishers and media companies followed since the founding fathers enshrined copyright in our Constitution were abandoned. And the public is only now fully understanding the extent of the collateral damage.
The Root Cause: Two Laws
Congress passed the Communications Decency Act of 1996 primarily in response to internet pornography, but added a Section 230, stating in part, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The law effectively immunizes providers of interactive computer services from tort liability, such as defamation, for the actions of their users. As a result, Google and Facebook are not subject to the types of liability traditional print and broadcasting media have faced for publishing tortious materials.
The Digital Millennium Copyright Act is a 1998 U.S. copyright law that governs online digital media and was intended to protect websites that ingest large quantities of user-generated content (UGC). The law lays out conditions, mostly technical, for “Safe Harbor” where platforms are protected from copyright infringement if they make modest efforts to protect copyrighted content and do not knowingly participate in copyright infringement.
In the late 1990s when UGC was in its infancy, Silicon Valley argued they were internet service providers (ISPs)—“pipes” like a telephone line. No one would sue AT&T for someone’s slanderous remarks spoken over a phone line. ISPs were not ‘publishers’ like newspapers or magazines, which edit and curate content and accept legal responsibility for defamation and copyright infringement. They did not touch, and therefore were not responsible for, the content they delivered.
In copyright law, a publisher can face punitive damages if they republish a ‘work’ that was already registered by another copyright holder with the U.S. copyright office. With DMCA and CDA protection, a ‘platform’ simply removes the work in a timely manner upon notification of violation of copyright, and informs original copyright holder and potential infringer, according to a process laid out in the laws.
It might sound downright wonky to be quibbling over the legal designation of Silicon Valley behemoths as platforms and tech companies versus publishers and media companies—but the designation is so essential to their wild-west, break-the-bank business models; they go to absurd lengths defending the designations.
If a news story libels someone in the New York Times, they can sue the New York Times. If a news story libels someone on Facebook or YouTube, upon notification, Facebook and YouTube remove the content without consequence, regardless of views or damage done. A libeled party can go sue the Ukrainians who posted the content, if they can find them. If a content owner sees someone posting their content without their consent—same drill. They would notify Facebook or Google, which will remove the content, and that’s it. And it wouldn’t be surprising if the content appears hours later, under a new account.
In the recent congressional judiciary subcommittee hearings delving into the Russian hack of our elections, Facebook general counsel Colin Stretch, Twitter acting counsel Sean Edgett and Google security director Richard Salgado were asked, “Are you media companies?” Their "no, no, no" responses may someday rival for misinformation tobacco executive’s now-infamous “cigarettes do not cause cancer” claims before Congress.
Colin Stretch didn’t mention Facebook Watch or Facebook’s intention to spend $1 billion on original programming. Richard Salgado did not discuss YouTube Red, production studios in New York and Los Angeles or new original programming featuring Ellen DeGeneres, Kevin Hart, Ryan Seacrest, Demi Lovato, the Slow Mo Guys, or Rhett and Link.
I guess NBC is an insurance company.
Disdain for Creators and Copyright
It started with music. I clearly remember the day, while taxiing five young boys ages 10 to 14 in the early iPod years, learning they’d downloaded 10,000 songs on their devices and were savvy in peer-to-peer content sharing and our new copyright-be-damned Apple-device ecosystem. As a father working in media licensing, I suggested they might create media someday and want compensation for their work. Musicians are all rich, they retorted. Silicon Valley knew the consequences of their devices and were happy to rescue musicians with 10 digital cents on the analog dollar solutions.
To fully understand how draconian YouTube became for musicians, I recommend Jonathan Taplin’s Move Fast and Break Things. Here is one excerpt:
“YouTube is now the world’s dominant audio streaming platform, dwarfing Spotify and virtually every other service. Yet it pays artists and record companies less than a dollar per year for every user of recorded music, thanks to rampant piracy on its site. The problem has gotten so bad that, in 2015, vinyl record sales generated more income for music creators than the billions of music streams on YouTube, and its ad-supported competitors.”
Jump ahead to this year’s Digital Media Licensing Association Conference in New York. The DMLA is a trade organization representing stock licensors ranging from Adobe Stock to mom-and-pop image, video, audio and motion graphics licensors. The halls are now filled with rights protection companies. Infringements are so pervasive that the services help to identify which infringers from a long list are even worth pursuit. Large companies, at least those that can afford it, employ internal whack-a-mole teams—while Google and Facebook remain off the hook.
I spoke to Joe Lauro, founder of Historic Films, which re-licenses clips from “The Ed Sullivan Show,” Don Kirshner’s “Midnight Special” and other legitimate music collections. He has given up, calling it a “losing battle.” Collectors like Lauro have spent lifetimes restoring, at their own expense, historical film and video, only to see their work appear again and again on YouTube. Lauro can’t compete online with the pirates, who make no legitimate payments to musicians and often reap advertising revenue from YouTube.
YouTube created a program called Content ID, which requires the content owner to submit a copy of their work, and the technology will find a match and report the potential infringement to the copyright holder. Unfortunately, it is an imperfect technology, and manual claiming is still required. Joe Moschella, SVP, head of business and legal affairs at Jukin Media, a company that specializes in representing user-generated content creators, recently said, “You need manual claiming even on platforms with Content ID… You’ll find your content in compilations, in news broadcasts; CI won’t pick it up when it should.” And he is talking about websites and platforms that have Content ID—and most do not. Since it requires constant monitoring and Joe Lauro can’t sue YouTube itself, he is left chasing shell companies and kids overseas. He said, “It’s chaos.”
As an example, Lauro pointed to Buddy Holly, with only three video clips in existence—two owned by “The Ed Sullivan Show” and one by Dick Clark Productions. On YouTube, when I played the official Sullivan version, there was no pre-roll ad, since Google in its sole discretion decides which content to run ads against and when. No money for Joe Lauro. There are 355,000 YouTube results for Buddy Holly, and you can bet only a fraction are by legitimate copyright holders.
The tide may be changing. In Europe, as reported recently in the Guardian, the UK government is considering the reclassification of Google and Facebook as publishers. Under UK law, the two classifications are “conduits of information” and “publishers”—and internet platforms are considered conduits with limited responsibility for what they publish. Karen Bradley, the culture secretary, said “she was wary of labeling internet company’s publishers but that the government wanted to find a balance between harnessing the benefits of the web while making it safe for users and protecting intellectual property.”
The Court of Appeals for the Ninth Circuit recently handed down a precedent-setting decision that constitutes a strong blow against an expansive reading of the DMCA “Safe Harbor” provisions. In the case, Mavrix, a photography agency, sued LiveJournal, a moderated online forum accused of being a repository of pirated copies of celebrity news stories and photographs, for infringement. While a district court had granted LiveJournal protection from infringement liability based on DMCA safe harbor, the Ninth Circuit issued a resounding reversal.
As John Tehranian, a founding partner at One LLP, the litigation firm representing Mavrix, pointed out, "the holding in Mavrix v. LiveJournal represented a critical victory for content owners by limiting the ability of internet service providers to manipulate the intricacies of the DMCA safe harbor to shield themselves from responsibility for the mass piracy from which they benefit." By providing critical guidance on judicial interpretation of the DMCA, including whether online services providers have the right and ability to control the actions of their users, Mavrix may constitute a watershed moment in the ongoing legal battle between Hollywood and Silicon Valley over copyright protection online.
When interviewed by Digiday, former editor-in-chief of Time Inc. and Bloomberg LP Norm Pearlstine said, “I don’t know how long these companies can continue getting away with calling themselves platforms instead of media companies. Particularly Facebook, Snapchat and Google. At some point they’ll have to take responsibility for the content on their platforms.” He went on, “How Google decides what to put on a home page, there is some editorial judgment there, even if they’re saying, these are our algorithms at work. I view them as editorial products, not as platforms. But I don’t know what that means.”
Facebook and Google are not run by bean counters. Engineers at the top of Facebook, Google and other internet giants fully understand the limitations of their algorithms and the moderators they employ. Don’t believe for a minute they are ‘shocked’ at what is transpiring. They fully understand the collateral damage which is a by-product of their money-minting media machines.
The DMCA and CDA protections enabled a few Silicon Valley giants to become sinfully rich, with a concentration of power not seen since the 1920s. The digital revolution could have succeeded without the ‘disruption’ and their disregard for copyright and content creators.