Law Students

A Music Tax? The Extortionary Ways of the Music Industry

By Casebook Sherpa

Mike Arrington at TechCrunch has several good stories on a proposed “music tax” which the recording industry is seeking to impose on listeners. As per usual the industry is talking out of both sides of its mouth by suggesting that the tax would not be mandatory but would instead be a voluntary scheme that ISPs can choose to participate. In reality, Arrington writes:

…the plan essentially comes down to telling ISPs that they can avoid any copyright infringement liability if they pay the fee on behalf of customers. And while the government wouldn?t be directly involved, the willingness of law enforcement agencies and the judicial system to enforce civil and criminal copyright infringement laws is the stick by which Griffin will convince ISPs to jump on board. It?s government endorsed extortion, nothing more and nothing less.

Or, in other words, “pay us not to sue you.” Interestingly, Arrington notes that the tax could bring in as much as $20 billion (twice the current revenue of the entire industry).

The issue, it appears, is whether the carve out for online service providers (ISPs included) existing in current law (17 U.S.C. § 512; Online Copyright Infringement Liability Limitation Act) will no longer operate to protect the ISPs. This doesn’t seem reasonable to me.

Generally, the statute protects OSPs that do not have knowledge of the infringement. The law also allows a copyright holder to take action against an OSP where they have “actual knowledge” of the infringement by establishing a process whereby a copyright holder can notify the OSP ordering that the infringement be remedied (i.e. Youtube taking videos down at the request of TV networks like NBC and Comedy Central). “[B]y endorsing a notice-and-takedown regime, the DMCA safe harbors created a solution for many copyright owners that is cheaper than litigation.” (EFF)

However, the attacks on the safe harbor include failure to act in a timely fashion and when ISPs actually receive knowledge that third parties (i.e. users or subscribers) are actively using the network to download and distribute copyrighted material. There is also this case of the RIAA seeking to use litigation to force Charter Communications to turn over its subscriber lists and the argument that allowing a third party to infringe a copyright can expose the ISP to tort liability (negligence, for instance). Or what about a search engine’s liability in connecting a user with copyrighted material? For a good introductory rundown of some other potential causes of action read here and for a list of related litigation read here.

See also: Chilling Effect.

Full post as published by Fight The Hypo on March 29, 2008 (boomark / email).