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B.C. Court Leaves Google Global Takedown Order Intact Pending Full Trial

Michael Geist Law RSS Feed - Fri, 2018/04/20 - 09:10

A British Columbia court has denied Google’s request to vary an injunction requiring it to remove search results from its global index, concluding that a U.S. ruling that did not demonstrate that the removal would result in a violation of U.S. law. The Google v. Equustek case has attracted international attention with the Supreme Court of Canada upholding a global takedown order. That decision noted that it was open to Google to raise potential conflict of laws with the B.C. court in the hopes of varying the order:

If Google has evidence that complying with such an injunction would require it to violate the laws of another jurisdiction, including interfering with freedom of expression, it is always free to apply to the British Columbia courts to vary the interlocutory order accordingly.

Google did just that by filing arguments in U.S. courts that “the Canadian order is ‘unenforceable in the United States because it directly conflicts with the First Amendment, disregards the Communication Decency Act’s immunity for interactive service providers, and violates principles of international comity.’” A U.S. court agreed, emphasizing that CDA immunity protections would be lost as a result of the Canadian court order.

After Equustek failed to delay a hearing on the implications of the U.S. order, the B.C. court conducted a hearing last month and issued its decision earlier this week. The court distinguished between an order inconsistent with the safe harbour protections and a violation of the First Amendment, concluding that “the U.S. decision does not establish that the injunction requires Google to violate American law.” Rather:

The effect of the U.S. order is that no action can be taken against Google to enforce the injunction in U.S. courts. That does not restrict the ability of this Court to protect the integrity of its own process through orders directed to parties over whom it has personal jurisdiction.

The court addressed several other Google arguments that will likely resurface during the full trial as the current temporary injunction is set to expire at the conclusion of the trial. Google may appeal the latest ruling or await the trial for a full airing of its arguments.

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Be Careful What You Wish For: The Risk of Ceding Online Content Monitoring to Internet Giants

Michael Geist Law RSS Feed - Thu, 2018/04/19 - 09:05

As elected officials place Internet giants such as Google and Facebook under an increasingly intense microscope, the pressure mounts on those companies to play more proactive roles in policing content on their networks. In recent weeks, the demands have come from seemingly every direction: privacy commissioners seeking rules on the removal of search results, politicians calling for increased efforts to address fake news on Internet platforms, and Internet users wondering why the companies are slow to takedown allegedly defamatory or harmful postings.

My Globe and Mail op-ed notes Internet companies can undoubtedly do more, but laying the responsibility primarily at their feet poses its own risks as governments and regulators effectively cede responsibility for content moderation and policing to private, for-profit companies. In doing so, there is a real chance that the Internet giants will become even more powerful, limiting future competition and entrenching an uncomfortable reliance on private organizations for activities that are traditionally conducted by courts and regulators.

Contrary to some claims, there has never been a fully hands-off approach to Internet regulation. All Internet companies – like any other company – respond to court orders to take down content or disclose the identity of their subscribers or users. The major companies such as Google, Facebook, Microsoft and Twitter also regularly release detailed transparency reports that provide insights into lawful requests and takedown efforts.

Some companies have proactively attempted to block or mute certain content. Facebook CEO Mark Zuckerberg emphasized his company’s success in combatting terrorist materials last week in his U.S. congressional appearance, noting that the technology is sufficiently effective to ensure that the vast majority of posts are never viewed by anyone.

Similarly, YouTube, the world’s largest video site, automatically flags copyright infringing content identified by rights holders, which is then muted, taken down, or used to generate revenues for the rights holder through advertising. These efforts at content moderation require significant resources with hundreds of millions of dollars invested in employees and technologies that can use automation to help facilitate content identification.

Before politicians or regulators mandate additional requirements, we should recognize the risks associated with outsourcing responsibility for content moderation to Internet companies.

First, mandating broader content moderation and takedowns virtually ensures that the big players will only get bigger given the technology, research, and personnel costs that will be out of the reach of smaller companies. At a time when some of the Internet companies already seem too big, content moderation of billions of posts or videos would reaffirm their power, rendering it virtually impossible for upstart players to compete.

In fact, we are already perilously close to entrenching the large Internet players. At a conference on large-scale content moderation held earlier this year in California, there was a wide gap between companies such as Google and Facebook (which deploy thousands of people to the task) and smaller companies such as Medium, Reddit, and Dropbox, which have hundreds of millions of users, but have only a handful of people focused on content moderation issues.

Second, there remains considerable uncertainty with what politicians actually want. Last week, members of Congress alternately took turns criticizing Facebook for not doing enough to take down content or for doing too much. For example, Representative David McKinley wanted to know why Facebook was slow to remove posts promoting opioids, while Representative Joe Barton raised concerns about Facebook taking down conservative content.

Similar issues arise in other countries. For example, Facebook faces potential liability in the millions of dollars for failing to remove hate content in Germany, but earlier this month a German court ordered the company to restore comments the company deemed offensive.

Third, supporters of shifting more responsibility to Internet companies argue that our court systems or other administrative mechanisms were never designed to adjudicate content-related issues on the Internet’s massive scale. Many Internet companies were never designed for it either, but we should at least recognize the cost associated with turning public adjudication over to private entities.

Leaving it to search engines, rather than the courts, to determine what is harmful and should therefore be removed from search indexes ultimately empowers Google and weakens our system of due process. Similarly, requiring hosting providers to identify instances of copyright infringement, removes much of the nuance in copyright analysis, creating real risks to freedom of expression.

Advocates of increased regulation are quick to point out that the Internet is not a no law land. Yet if the determination of the legality of online content is left largely to private Internet companies, we may be consigning courts and regulators to a diminished role while strengthening the Googles and Facebooks as concern grows over excessive power in the hands of a few Internet giants.

The post Be Careful What You Wish For: The Risk of Ceding Online Content Monitoring to Internet Giants appeared first on Michael Geist.

Data Rules in Modern Trade Agreements: The Video

Michael Geist Law RSS Feed - Wed, 2018/04/18 - 09:31

Earlier this month, CIGI posted my essay contribution to its series on data governance in the digital age. Data Rules in Modern Trade Agreements: Toward Reconciling an Open Internet with Privacy and Security Safeguards focuses on the policy challenges associated with including data provisions in trade agreements such as the TPP and NAFTA. I also sat down with CIGI for a short video on the essay. It is embedded below.

The post Data Rules in Modern Trade Agreements: The Video appeared first on Michael Geist.

My Questions for Facebook at Canadian Ethics Committee

Sara Bannerman - Tue, 2018/04/17 - 23:54
On Thursday, Kevin Chan, Global Directeur and Head of Public Policy at Facebook Canada, and  Robert Sherman, Facebook's Deputy Chief Privacy Officer, will appear before Canada's House of Commons Standing Committee on Access to Information, Privacy and Ethics.

Here are some questions I would ask them, if I had the chance:
  • Political parties’ use of Facebook
    • What data have Canadian political parties’ had access to through parties' past and current Facebook apps?
      • Basic Facebook data (names, photos, and email addresses)?
      • Phone numbers, location?
      • Call and text history?
      • Events and check-ins?
      • Likes?
      • Interests?
      • Political affiliation?
    • Do Canadian political parties, or other third-parties, use any ad targeting techniques that might cause concern?
  • Privacy
    • What third-party personal information (such as data Facebook purchased from data brokers or other outside companies) has Facebook acquired about Facebook users? 
      • Consumer data?
      • Purchase histories?
      • Credit records?
    • What are shadow profiles, and how does Facebook create profiles about people who are not users of Facebook?  
      • How can people who are not Facebook users opt out of being profiled, or give their consent to being profiled?
    • How can Canadian Facebook users access, correct, and delete that third-party personal information and users' surfing data (obtained through Facebook social plugins, analytics, the Facebook Pixel, or the Facebook Audience Network)? How can Canadians who are not Facebook users access, correct, and delete that third-party personal information and surfing data?
    • How long is third-party-obtained data and users' surfing data retained?  When is it deleted? 
    • Who is the designated person at Facebook who Canadians can contact to obtain their personal information or to correct it, and what is the contact information for that person?
  • Election Integrity
    • Facebook has announced that it supports the US' Honest Ads ActIt has also promised a public archive of ads (similar to what I suggested in a recent op-ed), to be ready in June.  A crowdsourced archive has also been announced by the CBC.  To confirm, will the Facebook ad archive be made available in Canada?  When?  Will  it expand the current election integrity initiative so that: 
      • the archive is publicly available to those not logged in to Facebook?
      • the archive is searchable: 
        • by party and/or candidate;
        • by issue?
      • the archive contains not only currently-running ads, but also all past ads?
      • Will it contain: 
        • a description of the targeted audience;
        • the amount spent on the ad;
        • impressions delivered; and
        • demographics of audience reached?
  • Facebook's relationship with Canadian political parties
    • What sort of services, sales, training, or advice have Facebook employees or contractors provided to Canadian political parties?
      • Have Facebook employees or contractors provided training on how to use your service to target users, or to create apps? Please describe.
      • Have Facebook employees or contractors provided advice on how to use your service to target users, or how to create apps? Please describe.
      • Where were Facebook employees or contractors who offered services, sales, advice, or training located? Were they in Canada? 
      • Have Facebook employees or contractors ever been embedded in Canadian political parties' campaigns? Has any Facebook employee dedicated more than 25% of their time to any one Canadian election or leadership campaign?
      • What was the billing structure for these services?
    • How are Facebook's relationships with political parties' campaigns kept separate from Facebook's policy efforts, such as Facebook's position on network neutrality or on  Canadian privacy legislation?  

Digital Trends and Initiatives in Education: The Study the Association of Canadian Publishers Tried To Bury

Michael Geist Law RSS Feed - Tue, 2018/04/17 - 09:46

The Standing Committee on Industry, Science and Technology starts its year-long review of copyright today with the first of several hearings focused on copyright, education and fair dealing. The hearings begin with evidence from education groups to be followed by publishers and other rights holder representatives (sources indicate that Access Copyright declined an invitation but will presumably return at a later date). The Association of Canadian Publishers, the leading national publisher lobby, has been one of the most vocal groups on copyright and will likely appear to tell MPs that fair dealing should be narrowed.

While the ACP has not hesitated to speak out at industry events, it interestingly has said nothing about a study it commissioned on digital trends and initiatives in education in Canada. The ACP study, which received financial support from the Government of Canada and the Ontario Media Development Corporation, is not posted on the publicly available portion of its website. There was no press release when it was released last June and I can find no public reference to it anywhere on the site. Jean Dryden pointed out to me that the study is available through the OMDC.

The ACP’s effort to bury its own study is unsurprising once you read it. The ACP commissioned it “to better understand the digital trends and initiatives in education and how these trends and initiatives are impacting the acquisition and use of Canadian content in the K–12 and post-secondary sectors.” After months of interviews, roundtables, and consultations with teachers, institutions, and publishers, the 70 page report identified many trends and issues, but copyright is not among them. In fact, despite the ACP’s insistence in lobbying efforts that copyright is at the heart of publisher concerns, copyright and fair dealing are limited to a single reference with no discussion or analysis. Instead, the ACP’s study confirms much of what the education community has been saying, namely that the combination of open educational resources and paid access is driving the educational shift to digital, not fair dealing.

The ACP study examines the availability of open educational resources, describing it as an emerging cornerstone of the educational system:

The OER movement continues to grow and is becoming a cornerstone of the Canadian K–12 educational system. The proliferation of OER content is evident across the country and there are numerous initiatives that support the development, access, and distribution of content.

The study notes that OERs form part of the key sources of materials for education:

While the use of digital content is increasing, print-based resources continue to be widely used in Canadian classrooms to support and enhance learning. The shift from print to digital resource use varies from province-to-province, district-to-district, school-to-school, and classroom-to-classroom. Some jurisdictions and schools continue to purchase print-based supplementary resources and some are acquiring core curriculum resources that include digital components. Others are shifting from print-based textbooks to eTextbooks. Some are purchasing very few resources, making do with what they have until funding for new resources is available and/or the technology and technical infrastructure is in place. Meanwhile, teachers and students have access to more free and open content than ever before given the ubiquity of content via the Internet, as well as the proliferation of content repositories, databases, portals, and applications.

In a review of sources of materials, there is no reference to fair dealing or copyright. However, there are numerous references commonly licensed or free digital content collections or databases, none of which implicate Access Copyright or its licence.

The ACP study acknowledges the huge investment by education groups in digital products offered by publishers:

Digital supplements as well as eBooks available from the major educational publishers have pushed digital sales to more than 50% of their educational revenue. Pearson reports that digital products now account for more than 50% of their revenue and McGraw-Hill announced that digital unit sales overtook print unit sales in its U.S. Higher Education Group in 2015. Although eBooks are the cornerstone of publishers’ digital offerings, digital courseware such as assessment and testing software and homework or study guides are becoming more popular with instructors and students.

The report emphasizes the importance of Canadian content by highlighting the many sources of content with no reference or concern with copyright law given the paid and openly licensed sources:

It was abundantly clear from everyone we interviewed throughout our research that Canadian content is considered to be a critically important component in the delivery of education across all levels from K–12 to post-secondary. However, reduced spending on educational resources, the transition from print to digital resources, the ubiquitous nature of content available from the Internet, and a lack of clear policy on the use of Canadian content (particularly in K–12) has shown a diminished use of Canadian resources licensed or purchased from Canadian publishers for use in schools.

The report provides several recommendations, none of which involve copyright reform. The study is a good one, based on dozens of interviews and a thorough canvassing of the sources of materials in Canadian schools. While the ACP regularly cites copyright as a key issue, its own study – that it has not even posted on its publicly available portion of its site – is far more consistent with the views of the education community, which is spending record amounts on digital materials and making increasing use of the wide range of openly licensed works.

The post Digital Trends and Initiatives in Education: The Study the Association of Canadian Publishers Tried To Bury appeared first on Michael Geist.

Canada’s Tough Anti-Piracy Copyright Law: Federal Court Awards Millions in Damages Against Unauthorized Streaming Site

Michael Geist Law RSS Feed - Mon, 2018/04/16 - 09:05

When the Bell coalition filed its website blocking application earlier this year, the immediate response from Innovation, Science and Economic Development Minister Navdeep Bains was to point to the strength of existing copyright law:

We understand that there are groups, including Bell, calling for additional tools to better fight piracy, particularly in the digital domain. Canada’s copyright system has numerous legal provisions and tools to help copyright owners protect their intellectual property, both online and in the physical realm. We are committed to maintaining one of the best intellectual property and copyright frameworks in the world to support creativity and innovation to the benefit of artists, creators, consumers and all Canadians.

I emphasized the point in my first post making the case against site blocking, arguing that Canada already has many legal provisions designed to assist copyright owners. In fact, Canada has some of the world’s toughest anti-piracy provisions, which Bell and others have actively used in recent years. This includes lawsuits against set-top box distributors, mod-chip sellers, and websites such as TVAddons. Some of these lawsuits have resulted in massive damage awards running into the millions of dollars. Moreover, Canadian law already provides for injunctive relief in appropriate circumstances with the Supreme Court of Canada’s Equustek decision one of the more recent manifestations of courts issuing orders to non-parties in support of intellectual property rights.

The submission deadline for the CRTC on website blocking has now closed (a response from the coalition is expected by April 23rd), but last week the Federal Court of Canada released a decision that once again demonstrates that the current law can be used to target unauthorized sites and services. In this case, the court issued a default judgment that includes $5 million in damages against several defendants accused of streaming Greek television programs without authorization.

Much of this decision focuses on whether the judge, who happens to the same judge as in the York University v. Access Copyright case, should issue a default judgment. In his view, the defendants “exhibited an intention to delay” and the $5 million award was said to reflect “bad faith which is established through the Ellas Defendants’ delaying tactics, the need to deter others, particularly those infringers who benefit by delay, and the lack of response by Greek World Music.” The court indicated it will also issue an injunction in a forthcoming ruling.

The Bell coalition has made much of the need for site blocking on the grounds that Canadian copyright law is inadequate to address the issue. Yet with tough anti-piracy rules and courts willing to hand out multi-million dollar damage awards to sites with only partial connection to Canada, before entertaining the possibility of new site blocking measures, rights holders should surely be required to test the effectiveness of existing law.

The post Canada’s Tough Anti-Piracy Copyright Law: Federal Court Awards Millions in Damages Against Unauthorized Streaming Site appeared first on Michael Geist.

Against Copyright Balance: Canadian Heritage Officials Say It’s Time “To Move Beyond the Notion of Balance”

Michael Geist Law RSS Feed - Thu, 2018/04/12 - 09:08

As the Standing Committee on Industry, Science and Technology (INDU) prepares for its first copyright review hearing next week featuring various representatives from the education community, MPs will regularly hear witnesses talk about the “copyright balance.” For Canadian copyright policy, balance has long been a foundational goal, regularly reflected in the views of both government and the courts. Yet according to a document obtained under the Access to Information Act, last fall officials at the Ministry of Canadian Heritage advised Minister Melanie Joly to abandon the emphasis on a copyright balance.

The document, an early draft of the ministerial letter to the INDU committee on the copyright review, includes the following passage:

Let’s use this opportunity to move beyond the notion of balance. A lot, probably too much, has been said in the name of balance. It usually leads to polarized positions, leaving no room for finding common ground. In an era of reconciliation, we should aim to try to change this conversation too.

It should be noted that this passage was not included in the final version of letter. In fact, the word “balance” does not appear in the final letter, presumably reflecting the common ground between two departments that bring different perspectives to a challenging policy issue.

While the rejection of balance ended up on the cutting room floor, assuming the Canadian Heritage language reflects views within the department, it represents a significant departure from the current state of Canadian copyright law. In Theberge, the Supreme Court stated:

The Copyright Act  is usually presented as a balance between promoting the public interest in the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator…The proper balance among these and other public policy objectives lies not only in recognizing the creator’s rights but in giving due weight to their limited nature.

That vision has been repeatedly affirmed by Canada’s highest court. In CCH, it stated:

As mentioned, in Théberge, supra, this Court stated that the purpose of copyright law was to balance the public interest in promoting the encouragement and dissemination of works of the arts and intellect and obtaining a just reward for the creator. 

In SOCAN v. Bell Canada, the court linked the balance discussion to fair dealing:

CCH confirmed that users’ rights are an essential part of furthering the public interest objectives of the Copyright Act .  One of the tools employed to achieve the proper balance between protection and access in the Act is the concept of fair dealing, which allows users to engage in some activities that might otherwise amount to copyright infringement.  In order to maintain the proper balance between these interests, the fair dealing provision “must not be interpreted restrictively”

The current government has also referenced balance in copyright. As part of its Copyright Board reform consultation, it noted “the Board regulates the balance of market power between rights holders and users to ensure that the value of the use of copyrighted content is fair to all parties and end-users.”

During the last copyright reform process, balance played a key role. In the Speech from the Throne, the government committed to legislative reform by stating “our Government will introduce and seek swift passage of copyright legislation that balances the needs of creators and users.” Upon introduction, the government emphasized a balanced approach:

One of the bill’s main objectives is to balance the interests of all stakeholders in the copyright regime. Achieving this balance has become increasingly complex given the exponential growth of the Internet. Canadians can obtain protected works online, sometimes through revenue-generating platforms or services, but also through free services, both legitimate and illegitimate. Our capacity to use high-quality Web services to obtain, protect and create copyrighted works is essential to our economic success and our cultural presence in the world.”

Given the focus on a copyright balance, Canadian Heritage copyright officials were effectively advising Minister Joly to shift away from the law and longstanding government policy. The position sends a warning signal, as even with its deletion from the final letter, Heritage officials may be shifting toward prioritizing the interests of a select group of stakeholders with more of a “winners and losers” approach to copyright. That could create significant political risks for Joly and suggests that Minister Navdeep Bains, the minister statutorily responsible for the Copyright Act, must stand firm to ensure that the views of all stakeholders is reflected in any reforms to Canadian law.

The post Against Copyright Balance: Canadian Heritage Officials Say It’s Time “To Move Beyond the Notion of Balance” appeared first on Michael Geist.

Broken Record: Why the Music Industry’s Secret Plan for iPhone Taxes, Internet Tracking and Content Blocking is Off-Key

Michael Geist Law RSS Feed - Wed, 2018/04/11 - 09:21

The long-awaited Canadian copyright review is set to kick off hearings next week as a House of Commons committee embarks on a year-long process that will hear from a wide range of stakeholders. My Globe and Mail op-ed notes that according to documents obtained under the Access to Information Act, however, one stakeholder – the Canadian Music Policy Coalition, an umbrella group representing 17 music associations – got an early start on the review process last fall by quietly submitting a 30-page reform proposal to government officials.

The proposal, titled “Sounding Like a Broken Record: Principled Copyright Recommendations from the Music Industry”, calls for radical changes that would spark significant new consumer fees and Internet regulation. The plan features new levies on smartphones and tablets, Internet service provider tracking of subscribers and content blocking, longer copyright terms, and even the industry’s ability to cancel commercial agreements with Internet companies if the benefits from the deal become “disproportionate.”

The coalition, which includes the Canadian Council of Music Industry Associations, the Canadian Music Publishers Association, and copyright collectives such as SOCAN, asks the government to follow three main principles as part of its reform process: real-world applicability, forward-thinking rights, and consistent rules.

But the coalition proposal largely avoids discussing the current state of the industry, perhaps with the intent of leaving some with the impression that file sharing remains a significant problem. The reality is the music industry in Canada, led by the massive growth of authorized music streaming services, has enjoyed a remarkable string of successes since the last time copyright law was overhauled in 2012.

The Canadian music market is growing much faster than the world average, with Canada jumping past Australia last year to become the sixth largest music market in the world. Music collective SOCAN, a coalition member, has seen Internet streaming revenues balloon from $3.4 million in 2013 to a record-setting $49.3 million in 2017.

Moreover, data confirms that music piracy has diminished dramatically in Canada. Music Canada reports that Canada is below global averages for “stream ripping”, the process of downloading streamed versions of songs from services such as YouTube. Last month Sandvine reported that file sharing technology BitTorrent is responsible for only 1.6 per cent of Canadian Internet traffic, down from as much as 15 per cent in 2014.

Yet despite the success of Internet streaming services and the marginalization of file sharing activity, the coalition has crafted a reform proposal that would be more at home in 2008 than in 2018. For example, the industry is now calling for new fees to be set by the Copyright Board on all smartphones and tablets to compensate for personal copying. The revival of the so-called “iPod tax” would today go far further than just digital music players, as the coalition is asking the government to amend the Copyright Act to allow for fees to be imposed on all devices.

Canadian Music Policy Coalition, pg. 15

The coalition also calls for an extension in the term of copyright beyond the global standard of life of the author plus an additional 50 years, claiming an extension of an additional 20 years would benefit Canada in international trade. The Canadian government recently adopted the opposite position, rejecting term extension in the Trans Pacific Partnership agreement.

Virtually all music users are targeted – the coalition wants more money from radio stations by eliminating a reduction in royalty payments for the first $1.25 million in advertising revenue and to narrow an exception for charities – but it saves its most far-reaching proposals for the Internet. The coalition envisions Internet providers assuming the role of digital police with respect to their subscribers, stating “we need ISPs to play a bigger role, for example, by implementing content recognition technologies that would track usage and, if need be, block unauthorized commercial uses.”

Coalition members did not play a significant part in the FairPlay Coalition effort, launched in January, to create a mandated website blocking system at the CRTC, but it appears that the music industry envisions much the same thing within the Copyright Act. While FairPlay website blocking advocates insisted that it would only apply in limited circumstances, the music industry was secretly seeking to create a blocking system of its own.

In fact, the coalition would go even further by requiring ISPs to “provide feedback to the intellectual property community, the extent of which should inform stakeholders of the use of the licensed assets.” In other words, the industry envisions ISPs blocking content, monitoring subscriber activity, and reporting its findings to the industry.

Canadian Music Policy Coalition, pg. 27

If that isn’t enough to worry the Internet community, the coalition would also like the government to create a mechanism requiring Internet services to renegotiate licensing agreements where ISPs derive “disproportionate” revenues and benefits. While it is not clear how this would be determined nor how the government could mandate the re-opening of private commercial agreements, the desire to change market terms are ironic given the industry’s insistence on Copyright Board reform to provide greater market certainty. As for who will shoulder all these new costs, the coalition calls for new regulations on ISP billing, seeking assurances that none of these additional expenses will be passed on to subscribers.

Canadian Music Policy Coalition, pg. 27

Innovation, Science and Economic Development Minister Navdeep Bains and Canadian Heritage Minister Mélanie Joly launched the copyright review late last year with a warning to the Standing Committee on Industry, Science, and Technology that efforts to use legal tools to impede changing dynamics in the marketplace may ultimately harm the very stakeholders the law is intended to assist. Given the demands for new smartphone fees, Internet blocking and monitoring, as well as interference with commercial agreements, the ministers might want to send a similar message to the music industry.

The post Broken Record: Why the Music Industry’s Secret Plan for iPhone Taxes, Internet Tracking and Content Blocking is Off-Key appeared first on Michael Geist.

CRTC Website Blocking Submissions Confirm Over-Blocking Risks: “Every Blocking Technique Suffers from Over-blocking and Under-blocking”

Michael Geist Law RSS Feed - Tue, 2018/04/10 - 09:45

With broad-based criticism of the Bell website blocking plan, supporters have tried to dismiss the opposition by characterizing much of their analysis as “misinformation”. Yet a review of many expert submissions reveals widely held concerns regarding the proposal. Many point to the absence of court orders as a key flaw and no one – whether supporter or critic – disputes that the majority of countries that have used site blocking require court orders. Further, claims that human rights concerns are unfounded ring hollow in light of the critical submission from the U.N. Special Rapporteur on Freedom of Expression. Efforts to dismiss the cost implications of site blocking are undermined by the clear position of the majority of Canadian Internet providers that the expenses associated with blocking are likely to lead to increased consumer costs and reduced competition.

Many submissions similarly point to the risks of over-blocking legitimate content. For example, CIRA’s technical review notes that “both over-blocking and under-blocking are significant risks to any blocking regime.” A similar theme arises from the Internet Infrastructure Coalition, which states “even in cases where mass takedowns do not occur, the landscape is littered with small entrepreneurs whose businesses are shattered by ‘accidental’ takedowns.” In fact, even Telus, which supports the application, acknowledges that the potential for over-blocking is a “legitimate concern.”

The submissions provide both anecdotal and technical evidence on the risks of over-blocking. For example, the Wikimedia Foundation warns:

We at the Wikimedia Foundation are familiar with overbroad and disproportionate website blocking systems. Since April 2017, Wikipedia has been blocked, in all languages, 12 in Turkey. The block, which did involve a court order, was initiated due to alleged issues reporting on government activity in two Wikipedia articles. The Turkish Internet regulator was not able to block access to only the disputed articles, because all connections to Wikipedia are encrypted. Due to that encryption, the Turkish regulator could not tell which Wikipedia articles users were reading and therefore could not block access to only the articles at issue. As a result, the regulator ordered ISPs in the country to block access to all of Wikipedia. Preventing Turkish residents from reading any of the millions of Wikipedia articles due to alleged issues with a few of them is clearly disproportionate. We do not want similar measures to be taken in Canada. 

FRPC’s excellent submission highlights over-blocking experience in France:

In France, yet another case of mistaken blacklisting led to users being unable to access websites such as Google.fr, Wikipedia, and a cloud provider, among other popular and legal services. Not only that, but these sites were blocked due to appearing on a terrorism blacklist, and when users tried to access them, the ISP redirected visitors to a government webpage that stated the sites were blocked due to “providing instructions for carrying out terror attacks or celebrating acts of terrorism”

From a technical perspective, the Internet Society states:

Every blocking technique suffers from over-blocking and under-blocking: blocking more than is intended and, at the same time, less than intended. They also cause other damage to the Internet by putting users at risk (as they attempt to evade blocks), reducing transparency and trust in the Internet, driving services underground, and intruding on user privacy. These are costs that must be considered at the same time that blocking is discussed.

The Internet Society Canada has a similar message:

the blocking of a particular IP address can lead to the blocking of communications to and from legitimate sites that share the same IP address. Network Address Translators essentially hide potentially thousands of IP addresses behind a common point of contact. No matter how ostensibly fair and public any process leading to a blocking order may be, it is unlikely that innocent third parties will have effective notice of the peril an application for a blocking order may pose to their business or leisure activities. In the case of hosting services in foreign countries, it is doubtful if most innocent third parties, even if they had notice, would be able to intervene in a process taking place on an expedited basis before a Canadian court – let alone before a Canadian administrative tribunal.

Canada’s Internet providers focus on the technical limitations of site blocking. For instance, CNOC warns:

Blocking IP addresses as a method of blocking copyright infringing websites must also be rejected as it will inevitably result in the blocking of large amounts of legitimate content on the Internet, which is an problem that could have significant legal ramifications for ISPs and that CNOC explores in greater detail further below. In the modern Internet, in which IPV4 address exhaustion is a serious issue, it is very common for many websites to be linked to a single IP address. Therefore, if an ISP were directed to block a particular IP address, it would also risk blocking access to many legitimate websites associated with that IP address that do not host any copyright infringing content.

It adds:

The inadvertent blocking of legitimate websites can also occur as IP addresses are routinely, and quickly, recycled by hosting services. For example, if an IP address, (“IP Address #1”) used by a copyright infringing website was blocked, that copyright infringing website may quickly transition to another IP address, (“IP Address #2), which is an extremely easy thing to do. In this situation, the hosting service controlling IP Address #1 would, likely in a matter of days, make IP Address #1 available to other customers. The new customers using IP Address #1 may very well be legitimate websites, and if IP Address #1 was ordered to be blocked, the legitimate content of those new customers would then be blocked by all ISPs in Canada while the copyright infringing website carried on its activities safely from IP Address #2. Given the necessary amount of time and process before a decision to block an IP address could be taken, this is a real concern.

While some copyright lawyers insist that over-blocking is not a concern, those views are not shared by technical experts from around the world. Their message is clear: every blocking technique suffers from over-blocking and under-blocking, creating a significant risk with the Bell coalition website blocking plan.

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Data Rules in Modern Trade Agreements: Toward Reconciling an Open Internet with Privacy and Security Safeguards

Michael Geist Law RSS Feed - Mon, 2018/04/09 - 09:10

CIGI’s essay series on data governance in the digital age has shone a spotlight on the need for a national data strategy. My contribution notes that central to any data strategy will be some measure of data control. Given the implications for privacy, security and innovation policies, this includes some control over where data is stored and the conditions under which it is transferred across borders. Yet, despite the mounting data concerns, Canada may have already signed away much of its policy flexibility with respect to rules on both data localization and data transfers, severely restricting its ability to implement policy measures in the national interest.

The Trans-Pacific Partnership – now renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – features restrictions on the ability to mandate data localization and impose limits on data transfers. Canada signed the CPTPP on March 8, 2018, and is expected to begin steps toward implementation later this year. The CPTPP model is rapidly emerging as the standard approach in “modernized” trade deals featuring e-commerce or digital trade rules, as it can be found in agreements large (the renegotiated NAFTA) and small (the recently concluded Singapore-Sri Lanka Free Trade Agreement). Given the proliferation of the provisions, the linkage between data sovereignty and trade agreements seems likely to grow tighter in the years ahead.

The inclusion of data provisions within these trade agreements raises two key concerns. First, trade agreements invariably involve trade-offs on a wide range of issues from tariffs on agricultural goods to environmental policy. The inclusion of data governance as a trade-related issue complicates the policy process since it treats a critical yet complex policy matter as little more than a trade bargaining chip.

Second, it highlights a difficult policy challenge that sits at the heart of controlling data in a networked economy. While there may be benefits for privacy, security and innovation policies from greater control over data, the issue is complicated by the competing policy goal of support for open networks and the free flow of data, which may fuel innovation and hold the potential to promote pro-democracy norms. Striking an appropriate balance that promotes an open internet and safeguards the privacy, security and innovation issues associated with data should be a top priority for trade negotiators, yet the headlong rush to conclude e-commerce or digital trade chapters in modern trade agreements suggests that the policy flexibility has narrowed considerably, with countries bound by policy limitations that they have barely begun to understand.

The full essay can be found here.

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Canadian Internet Providers Warn of Site Blocking Consequences: Threat to Affordable Internet Access and Market Competition

Michael Geist Law RSS Feed - Fri, 2018/04/06 - 10:08

Given that Canadian consumers pay some of the highest fees among peer countries for Internet and wireless access, the federal government has increasingly emphasized the need to address Internet affordability. Prime Minister Justin Trudeau has told the House of Commons that “Canadians pay enough for their Internet” and Innovation, Science and Economic Development Minister Navdeep Bains echoed the same concerns in a speech last year, noting that high costs create a digital divide that represents a barrier to continued prosperity for Canadians.

The Internet access cost concerns seems likely to emerge as a key issue in response to the Bell coalition website blocking plan. While some have tried to deflect the cost concern by pointing to the purported anti-piracy benefits of blocking (a claim that is subject to considerable dispute in the CRTC submissions), the clear position of the majority of Canadian providers – whether independent ISPs, cable companies, or satellite-based providers – is that the costs associated with blocking are likely to lead to increased consumer costs, reduced competition, and risks to extending broadband services to under-served areas.

For example, the Canadian Cable Systems Alliance, which represents dozens of smaller cable companies in communities across the country, states in its submission:

CCSA can only offer conditional support for the FairPlay Application. Specifically, we can only support it if smaller ISPs are exempt or protected from any costs associated with setting up and implementing the regime. If smaller ISPs are forced to bear these costs, Internet retail prices will increase and the extension of broadband services to unserved and underserved areas will be jeopardized. In such circumstances, we submit the real public policy costs of the proposed FairPlay regime would far outweigh its potential benefits.

CNOC, which represents many independent ISPs, argues extensively that the site blocking plan is ineffective and also points to the impact on affordability:

if ISPs are required to incur costs to implement FairPlay Canada’s proposal, these costs will likely be passed onto end-users, thus negatively impacting the affordability of telecommunications services. These costs will also likely have a disproportionate impact on smaller ISPs, thus negatively impacting their ability to offer robust competition to the incumbent operators. This will particularly be the case if ISPs are required to use any form of DPI technology, which, as CNOC noted above, would be completely unaffordable for most non-incumbent ISPs.

TekSavvy offers its own submission in opposing the proposal and lends its support to the CNOC intervention. Xplornet, the leading satellite Internet provider, declined to support the application, arguing that copyright falls outside the CRTC’s mandate and again pointing to costs:

ISPs will bear the cost of implementing this regime by taking action to block access to sites designated by the Commission as piracy sites. This will include having to handle any fall-out from customers trying to access blocked sites. These costs will be on top of the cost of administering the existing notice and notice regime.

Eastlink also urges the CRTC to address the cost issue:

We submit that if the Commission does decide in favour of the Application, it must consider and address the impact on costs of ISPs, particularly smaller ISPs such as Eastlink who may experience a more significant impact on systems and resources as compared to the much larger ISPs. We have direct experience with the costs of implementing systems relating to ISP requirements (such as the Notice and Notice regime) and how significant such costs can be when there is no cost recovery in place.

The Independent Telecommunications Providers Association says in its submission that “the ITPA would object to any regime that imposes costs without a cost recovery mechanism for service providers.” The B.C. Broadband Association warns that “adding the proposed additional burden to ISPs will further discourage competition in the marketplace from non-incumbent carriers, with a minimal decrease in piracy.” The Public Interest Advocacy Centre argues:

Requiring ISPs to block websites will be onerous and costly for small ISPs and other Internet infrastructure providers. Because equipment costs would have to be incurred before an ISP enters the market, this would add an additional barrier to entry and slight ongoing cost in the ISP market, which would limit competition and allow incumbents to raise their prices.

In fact, even the Canadian Wireless Telecommunications Association, which counts Bell as a member, could not achieve consensus support for the application. Instead, its submission is limited to urging the CRTC to “consider” the proposal.

The widespread concern from the industry points the real risk that the site blocking plan would increase costs and decrease marketplace competition. Indeed, the competitive impact may be one reason that Bell and the other large providers are so supportive since they would stand to gain from blocking with higher fees passed along to subscribers and reduced competition, leaving smaller ISPs with a difficult competitive challenge and consumers with higher bills. For a government committed to Internet affordability, the submissions to the CRTC leave little doubt that the blocking plan represents a major threat to a top policy priority.

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Striking the Balance: Privacy and Freedom of Expression in the Digital Age

Michael Geist Law RSS Feed - Thu, 2018/04/05 - 10:09

The Canadian Journalism Foundation and CIPPIC partnered on a terrific event yesterday on privacy and freedom of expression in the digital age.  The event, held at the Globe and Mail Centre in Toronto, focused on the right to be forgotten. It included conversations with Privacy Commissioner of Canada Daniel Therrien, Google’s Peter Fleischer, and a debate between David Fraser and Keith Rose. I was featured on the final panel in a conversation with the Globe and Mail’s Susan Krashinsky Robertson. The discussion, embedded below, focused on a wide range of privacy issues, including the need to update PIPEDA, pressure from the EU to improve Canada’s privacy law, how to foster meaningful consent, and the right to be forgotten.

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Quebec Digital Sales Tax Plan Shows It Is Easier Said Than Done

Michael Geist Law RSS Feed - Thu, 2018/04/05 - 10:03

Government officials and cultural groups in Quebec have been banging the drum for much of the past year for the imposition of digital sales taxes on services such as Netflix. The debate is often framed around the notion that Netflix and other Internet companies should be collecting sales tax like any other service provider. Supporters argue that other countries have begun to levy sales taxes on digital services and Canada should do the same.

My Globe and Mail op-ed notes the federal government has sent mixed signals to date, with Prime Minister Justin Trudeau rejecting new taxes on the grounds that Canadians “pay enough for the Internet”, Canadian Heritage Minister Mélanie Joly seemingly keeping the door open to new taxes, and Finance Minister Bill Morneau committing to studying the issue while international standards develop.

Without a firm federal commitment, last week the Quebec government decided to go it alone, unveiling plans to require out-of-province and foreign companies to collect and remit sales taxes on digital services starting in 2019. The province anticipates collecting approximately $30 million a year in revenues from out-of-country digital sales, a relatively small amount in a province that generates approximately $17 billion in sales tax revenues annually.

The Quebec government admits that the current situation already allows for collection of digital sales tax, albeit with poor results. Consumers can self-report the applicable, uncollected sales taxes for online goods and services with their annual tax filing but few bother to do so. Moreover, characterizing digital sales taxes as a “tax on Netflix” is misleading, since consumers – not companies – pay sales taxes. Companies such as Netflix merely act as intermediaries, collecting the tax and then remitting it to the government.

Yet despite assurances that digital sales taxes are relatively easy to implement, the Quebec plan demonstrates the complexity associated with requiring thousands of online companies around the world to implement dozens or even hundreds of new tax requirements.

The government plans to establish a lightweight registration system for foreign companies to ease the administrative burden associated with signing up for provincial sales tax collection. But while the basic framework is relatively straightforward, enforcement will present an enormous challenge as tax authorities try to persuade online businesses with no presence in the province to register, collect, and remit the applicable sales tax. The government says it will work with businesses to assist with compliance in the first year, but thereafter “the penalties provided for in the existing tax legislation will be imposed on non-resident suppliers that have not complied with the new obligations.”

For some businesses, the cost of compliance with the provincial requirements will far exceed the actual tax payments. Without a global standard, the Quebec government has arbitrarily set the threshold for sales tax registration and collection at C$30,000 in provincial revenues. That is low compared to many other countries that have adopted digital taxes: the Japanese threshold is over C$120,000, the Saudi Arabian threshold is over C$340,000, the Swiss threshold is over C$135,000, and the New Zealand threshold is over C$55,000.

Many businesses may also have to rework their customer relationships in order to collect increased personal information. For example, some digital services may not currently gather detailed geographic information on their subscribers, but the Quebec tax rules will effectively mandate the collection and use of location-based information.

With a 9.75 per cent tax rate, the low threshold sets the bar at less than $3,000 in annual sales taxes for some businesses, meaning compliance costs alone could easily exceed the tax revenues and cause some companies to rethink providing service in the province. That points to at least one tax trade-off: the benefits of increased tax revenues set off against decreased consumer choice as some businesses exit the Quebec market.

The enforcement challenges extend to consumers, some of whom may try to avoid paying provincial sales taxes by claiming residency elsewhere. The government has already identified measured to target sales tax evaders, with penalties of $100 or 50 per cent of the applicable sales tax. In order to identify instances of sales tax evasion, the government says it will collect customer information from out-of-country operators such as Netflix, though it is unclear how it plans to compel those companies to hand-over subscriber lists or other relevant data.

As governments race to catch up to the growth of e-commerce, there has long been a seeming inevitability to the imposition of digital sales tax. However, Quebec’s decision to move ahead without a clear international standard and federal government participation demonstrates that for the moment shifting sales tax to a global Internet environment remains easier said than done.

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Coming Soon (or at least by November): Government Sets a Date for Data Breach Disclosure Rules To Take Effect

Michael Geist Law RSS Feed - Wed, 2018/04/04 - 11:24

Several years after passing into law, the Canadian government has finally set an effective date for long-overdue data breach disclosure rules. The requirements were included in the Digital Privacy Act that was passed in 2015, but the accompanying regulations literally took years to finalize. Earlier this year, I argued that the failure to expedite security breach disclosure rules was an embarrassing failure for successive Conservative and Liberal governments, placing the personal information of millions of Canadians at risk and effectively giving a free pass to companies that do not adequately safeguard their customers’ information.

Last week, the government quietly passed the Order in Council that will allow the data breach disclosure rules to take effect on November 1, 2018. That delay is longer than I argued was needed in a regulatory submission filed with the government, but given the long delays and the fact that others wanted an even longer phase-in period, it is good to see the data breach disclosure rules finally take effect. It should be noted that there are still some important lingering questions about the content of notices, record keeping, and other related issues that should be addressed by regulation. The government will presumably flesh out the remaining issues with the release of the regulations in the weeks ahead.

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Telus’ Website Blocking Submission: No Copyright Expertise Needed and No Net Neutrality Violation if Everyone is Doing It

Michael Geist Law RSS Feed - Tue, 2018/04/03 - 09:49

Telus was not a charter member of the Bell website blocking coalition, but there was never much doubt that the last of the big incumbents would side with the application. Most of the independent and smaller telecom companies have opposed the proposal (and even the Canadian Wireless Telecommunications Association cannot bring itself to state that it supports the plan), but Canada is not known for competition among the big incumbents and this issue was no different. Indeed, the Telus submission supports the application, but relies on remarkably weak and somewhat head-scratching analysis to arrive at its conclusion that the proposal meets the necessary legal standards.

It starts by arguing that there is no need for copyright expertise to run a copyright blocking system.  How does it arrive at that conclusion? It maintains that the blocking will be so obvious, that expertise simply won’t be needed.  Instead, it thinks that this is solely a broadcast and telecom issue (the fact that it acknowledges the broadcast aspect of blocking is consistent with arguments that the application should be dismissed under the Telecommunications Act):

Copyright law expertise is not what is required to implement the proposed regime. What the FairPlay Application really calls on the Commission to do is balance the interests of many stakeholders in the telecommunications and broadcasting sectors. Specifically, the Commission is being asked to determine on a case by case basis whether blocking a website egregiously engaged in the illegal activity of online content piracy is warranted in the circumstances and should override the expectation of Canadians of a free and open Internet.

That view is wholly inconsistent with the experience in other jurisdictions, where copyright is a key part of a copyright blocking analysis. In fact, Telus’ view of copyright is particularly odd given a later discussion on procedural fairness that seeks to analogize website blocking to the U.S. DMCA notice-and-takedown system. It inaccurately describes the U.S. system as it tries to argue that the website blocking system is superior to the takedown system:

TELUS considers that the regime proposed by FairPlay Canada is superior to a U.S.-style “Notice and Takedown” regime. That regime, established under the U.S. Digital Millennium Copyright Act, enables rights-holders to force intermediaries such as search engines and website operators to remove allegedly infringing materials expeditiously.

This is wrong on several levels. The U.S. notice-and-takedown system does not force intermediaries to do anything. Intermediaries are free to ignore takedown requests (and many do – Wikipedia rejects the majority of requests it receives). The only thing the system does is provide intermediaries with a safe harbour from liability if they do not takedown the content. Telus simply misstates U.S. law. Even if it had accurately described the law, the comparison would still not work since Canada has rejected notice-and-takedown, the notice-and-takedown system includes a put-back mechanism not found in the site blocking approach, and while a content poster is free to re-post the content on another site under notice-and-takedown, a universally mandated block of a website will affect all Internet users.

Having bungled the copyright analysis, Telus then continues with a discussion on the implications for freedom of expression. Unlike the Bell coalition supporters that dismiss freedom of expression concerns (now finding themselves opposed by the U.N. Special Rapporteur for Freedom of Expression), Telus acknowledges that over-blocking could be an issue. The remedy? The CRTC can simply order an unblocking in such cases. While consistent with a company that over-blocked hundreds of sites in the Voices for Change case and today shrugs its shoulders at the incident, few freedom of expression scholars would be comforted with the proposed solution:

In TELUS’ view, the only legitimate concern in regards to freedom of expression and the website-blocking regime proposed by FairPlay Canada relates to the potential for “over-blocking”, where otherwise legitimate websites are inadvertently blocked in addition to copyright-infringing websites. This concern, however, could easily be addressed by the Commission, which could assess the potential for collateral damage in its decisions and impose any ex-post corrective remedies if necessary.

Telus rounds out its intervention with a review of net neutrality. It unsurprisingly argues there is no net neutrality issue, but its emphasis focuses on the fact that all ISPs would engage in website blocking. In its view, if everyone is doing it, there is no net neutrality issue:

The regime proposed in the FairPlay Application would not contravene any of the policies established in the decisions identified as forming part of Canada’s net neutrality code. All of these decisions relate to actions taken by individual ISPs affecting users’ access to specific destinations on the Internet, and none of them stand in the way of the Commission requiring all ISPs to implement a decision affecting specific websites.

I don’t believe universal blocking has the effect of magically transforming a violation of fundamental net neutrality principles. As for the argument that net neutrality only applies to lawful content, the Telus application does not cite to any CRTC rules on point. The likely reason why? There are none.

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Canadian Copyright Law Review Takes Shape: Report Not Expected Until 2019

Michael Geist Law RSS Feed - Tue, 2018/04/03 - 09:15

The Standing Committee on Industry, Science and Technology outlined its plans for the review of the Copyright Act last week. The committee expects the review to run into next year, with the hope of completing the hearings by early 2019.  The hearings will unfold in three phases:

  • Witnesses representing specific sectors of activity, including publishing, visual arts, software and telecommunications (Phase I);
  • Witnesses representing a range of stakeholders involved in multiple sectors of activity, such as Indigenous communities and various interest groups (Phase II); and
  • Legal experts, including individual lawyers and academics, along with professional associations (Phase III).

The committee will also travel across Canada in May to offer additional opportunities for witnesses and has asked the Standing Committee on Canadian Heritage to conduct a review of remuneration models for artists and creative industries.

Anyone can participate in the consultation by submitting their views directly to the committee.  It will accept written briefs of up to 2,000 words via email.

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My CRTC Submission on the Bell Coalition Site Blocking Plan: Why it is Disproportionate, Harmful, and Inconsistent With Global Standards

Michael Geist Law RSS Feed - Mon, 2018/04/02 - 09:10

The CRTC’s deadline for submissions on the Bell coalition website blocking plan closed last week, with more than 10,000 people and organizations filing directly with the CRTC. The interventions including a warning from the U.N. Special Rapporteur for Freedom of Expression that the blocking plan “raises serious inconsistencies” with Canada’s human rights obligations, fears from ISPs that the plan will increase Internet costs for consumers, expert analysis on the technical risks of site blocking, and detailed reviews of the many problems with the plan.

My submission has not yet been posted online, but is available in full here. The submission is divided into five parts:

  • Part one identifies why the Coalition Proposal is a disproportionate response to piracy concerns
  • Part two discusses why the Coalition Proposal is inconsistent with international standards, particularly given the absence of court orders
  • Part three examines why the Coalition Proposal is likely to lead to significant harms including over-blocking
  • Part four assesses why the Coalition Proposal is inconsistent with Commission’s policy priorities such as affordable Internet access, privacy, and net neutrality
  • Part five highlights why the Coalition Proposal is inconsistent with the Commission’s Policy Direction and the Telecommunications Act policy objectives

The executive summary of my submission is posted below. The full submission can be accessed here.

Executive Summary

The Coalition Proposal is a Disproportionate Response to Piracy Concerns

1.    The Coalition argues that piracy in Canada is a growing threat, relying on data from MUSO to suggest that current activities “makes it difficult if not impossible to build the successful business models that will meet the evolving demands of Canadians, support Canadian content production, and contribute to the Canadian economy.” This submission argues that website blocking represents a significant reform with major costs and implications for freedom of expression, net neutrality, affordable and competitive consumer Internet access, and the balanced enforcement of intellectual property rights. Without a compelling case that piracy in Canada is particularly severe – and evidence that the proposed solution will have a major impact on piracy rates – the risks and costs associated with the Coalition Proposal will outweigh any perceived benefits.

2.    The MUSO report shows that Canadian piracy rates actually declined during the study period. Moreover, there are very questionable assumptions that call into question the validity of the data and highlight why the definition of “piracy sites” is subject to considerable manipulation.

3.    The Coalition Proposal must not only make the case that there is a significant Canadian piracy problem, but also that piracy is having an enormous impact on the business and creative sectors. Yet the Canadian data on the digital economy and Canadian creative sector show a thriving industry.

4.    According to the latest data from the Canadian Media Producers Association, the total value of the Canadian film and television sector exceeded $8 billion last year, over a billion more than has been recorded in any year over the past decade. In fact, last year everything increased: Canadian television, Canadian feature film, foreign location and service production, and broadcaster in-house production.

5.    The Canadian data on digital business models also points to a steady stream of success stories that refute claims that it is difficult if not impossible to create successful business models in Canada.  Online video services, which the Coalition suggests are harmed by streaming sites, are experiencing rapidly expanding revenues, now generating more than $1 billion per year. In fact, two Canadian online video services – CraveTV and Club illico – are estimated to have earned $373 million last year, up from just $13 million four years earlier.

6.    Canada has some of the world’s toughest anti-piracy legal provisions, which Coalition members have actively used in recent years. The Coalition is effectively arguing that it needs more laws or legal tools to target non-Canadian sites that may be accessed by Canadians. However, Canadian law already provides for injunctive relief in appropriate circumstances with the Supreme Court of Canada’s Equustek decision one of the more recent manifestations of courts issuing orders to non-parties in support of intellectual property rights.

7.    The Coalition argues that blocking “regimes have been widely adopted internationally because they have been proven to work.” The submission cites data from several countries including the UK, Portugal, and South Korea. However, a closer look at the data reveals that website blocking is far less effective than its proponents claim. Even if the piracy claims were taken at face value, studies from around the world indicate only limited impact from site blocking in the longer term.

The Coalition Proposal Is Inconsistent with Global Standards

8.    The Coalition has tried to downplay the absence of a court order from its proposal by suggesting that many countries have site blocking rules and that relying on alternate systems is commonplace. Its application states that at least 20 countries have site blocking, some with courts (the UK) and some without (Portugal). An examination of website blocking around the world reveals the inference that non-court ordered blocking is commonly used is inaccurate.

9.    Research shows that of the 22 countries that have site blocked for copyright purposes, 20 use or have used court orders (the exceptions are Portugal (which is voluntary) and Italy (which permits both)). Of course, there are many notable countries, including the United States, Japan, Switzerland, Mexico (whose Supreme Court ruled blocking is disproportional) and New Zealand, that have no record of site blocking for copyright purposes at all.

10.    As currently framed, the Coalition Proposal may also violate human rights norms. Website blocking or other measures to limit access to the Internet raises obvious freedom of expression concerns that has sparked commentary from many international governmental organizations.

11.    International human rights rules and declarations leave the Coalition Proposal vulnerable to challenge in at least two respects. First, the absence of court orders remains a fatal flaw, placing Canada at odds with the majority of countries that have adopted any form of copyright-related website blocking. Second, the proportionality of the measures relative to harm also leaves it subject to challenge.

The Coalition Proposal is Likely to Lead to Significant Harms

12.    The Coalition Proposal downplays concerns about over-blocking that often accompanies site blocking regimes by arguing that it will be limited to “websites and services that are blatantly, overwhelmingly, or structurally engaged in piracy.” Yet the blocking activity is likely to expand beyond a narrow scope in at least three ways: over-blocking of legitimate sites, expanded coverage of “piracy” sites and services, and the inclusion of content beyond intellectual property issues.

13.    The danger of over-blocking legitimate websites raises serious freedom of expression concerns, particularly since experience suggests that over-blocking is a likely outcome of blocking systems.

14.    A fulsome review reveals that blocking orders frequently lead to over-blocking, potentially affecting tens of thousands or even hundreds of thousands of legitimate websites. Given the hundreds of ISPs in Canada with varying technical capabilities, mandated website blocking as proposed by the Coalition would likely lead to over-blocking of legitimate sites.

15.    The expansion of the definition of piracy sites is also likely to occur. Once the list of piracy sites is addressed, it is very likely that the Coalition will turn its attention to other sites and services such as virtual private networks (VPNs). The use of VPNs, which enhance privacy but also allow users to access out-of-market content, has been sore spot for the companies for many years. VPN services are already targeted by IP lobby groups such as the International Intellectual Property Alliance and can be expected to face demands for blocking. Beyond VPNs, it would not be surprising to find legitimate services streaming unlicensed content as the next target.

16.    If the Commission were to create a system for mandated website blocking of intellectual property issues, there is simply no doubt that it would quickly face requests for far more. For example, the first request for mandated website blocking involved a request in 2006 from Richard Warman to block two foreign-based hate sites. The Commission refused to issue the order, noting that it did not think it had the legislative power under Section 36 to issue blocking orders. With the floodgates opened, hate speech sites would quickly give way to online gambling and other regulated activities as blocking targets.

The Coalition Proposal Is Inconsistent with Commission Policy Priorities

17.    A mandated blocking system applied to all ISPs in Canada would have an uneven impact: larger ISPs will face new costs but may find it easier to integrate into existing systems, whereas hundreds of smaller ISPs would face significant new costs that would affect their marketplace competitiveness. In fact, larger ISPs might ultimately benefit from higher fees passed along to subscribers and reduced competition. By harming the competitiveness of many smaller providers, the Coalition Proposal may jeopardize efforts to extend affordable Internet access to all Canadians.

18.    Estimating the costs of the site blocking plan is made more difficult by the lack of detail in the Coalition Proposal. However, the experience elsewhere suggests that it could run into the millions of dollars. Larger ISPs in the UK disclosed their approximate costs in a 2014 case. For example, Sky Broadband spent over 100,000 pounds (costs described as “six figures”) to develop a website blocking system solely for IP right infringing website injunctions in 2011 and spent thousands more each month on monitoring costs. British Telecom spent over a million pounds on a DNS web-blocking system in 2012 and required more than two months of employee time on implementation. EE spent more than a million pounds on its website blocking system and over 100,000 pounds every month for operations.

19.    The Coalition cites privacy protection as a reason to support its plan, noting the privacy risks that can arise from unauthorized streaming sites. There are obviously far better ways of protecting user privacy from risks on the Internet than blocking access to sites that might create those risks, however. Rather than enhancing privacy protection, the Coalition Proposal puts it at greater risk, with the possibility of VPN blocking, incentives to monitor customer traffic similar to the now-controversial practices arising from the case involving Facebook and Cambridge Analytica, and the potential adoption of invasive site blocking technologies.

20.    Given that the starting principle for net neutrality is the right for users to access content and applications of their choice, blocking content is prima facie a net neutrality violation.

21.    The Coalition argues that net neutrality is limited to “lawful content” and that its plan therefore falls outside the rules. In its application, however, it does not cite the Canadian rules since Canada’s net neutrality framework was never explicitly limited in application to content that is “lawful.”

The Coalition Proposal is Inconsistent with the Policy Direction and the Telecommunications Act

22.    Despite years of insistence by Coalition members that the Commission follow the CRTC policy direction, the Coalition has now proposed regulatory intervention that could not be more inconsistent with that direction.

23.    With courts around the world concluding that site blocking is a disproportionate remedy, evidence that it is likely to lead to over-blocking, and risks that it violates net neutrality and privacy rights, the Coalition Proposal fails to meet the policy direction’s requirement of “efficient and proportionate” regulation.

24.    The Commission has made it clear that it will only permit blocking in “exceptional circumstances” and only where doing so would further the objectives found in the Telecommunications Act. The Coalition Proposal must therefore do more than simply raise concerns with respect to copyright law or cultural policies found in the Broadcasting Act objectives. Rather, it must convince the Commission that website blocking would further the telecommunications policy objectives.

25.    The Coalition Proposal cites three objectives in support: that piracy “threatens the social and economic fabric of Canada” (subsection a), that the telecommunications system should “encourage compliance with Canadian laws” (subsection h), and that website blocking “will significantly contribute toward the protection of the privacy of Canadian Internet users” (subsection i).

26.    The Coalition Proposal is exceptionally weak on all counts. There is no compelling evidence that piracy on telecommunications networks is threatening the social and economic fabric of Canada. Indeed, claims that Canada is a piracy haven are not supported by the data. The argument on encouraging compliance with the law is even weaker as the Commission has already stated that compliance with other legal or juridical requirements does not justify site blocking.

27.    Not only does the Coalition Proposal fail to make the case that it furthers the Telecommunications Act objectives, but there is a far better argument that it undermines them. For example, Subsection (a) references the “orderly development throughout Canada” of the telecommunications system. The creation of a blocking system applied to hundreds of ISPs and wireless carriers of all sizes across the country would undermine that goal as it would likely lead to the implementation of differing blocking technologies, inconsistent over-blocking of legitimate content, and a non-neutral Internet in Canada.

28.    The regulatory framework for telecommunications – whether in the Act’s objectives, the government’s policy direction, or in the Supreme Court’s clear separation of broadcasting and telecom – all point to policy priorities premised on efficiency, affordability, and competitiveness. To engage in content regulation on the Internet is incompatible with those priorities and would turn the Commission into an Internet content regulatory authority, opening the door to licensing or regulating Internet streaming services, traffic that runs through ISP networks, and web-based content wherever it may be located.

29.    Supporters of the Coalition Proposal downplay these concerns, arguing that it is a narrowly tailored approach to address piracy. This submission identifies why the blocking system is likely to lead to over-blocking and expanded scope of coverage for both IP and non-IP issues. But even more fundamentally, implementing blocking under Coalition Proposal without a court order under the auspices of the CRTC turns the Commission (and by extension the government) into a regulator of Internet content in direct contradiction to the telecommunications legislative framework and the Commission’s stated approach to online content.

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UN Special Rapporteur for Freedom of Expression: Website Blocking Plan “Raises Serious Inconsistencies” With Canada’s Human Rights Obligations

Michael Geist Law RSS Feed - Sat, 2018/03/31 - 10:01

The United Nations Special Rapporteur on the Right to Freedom of Opinion and Expression has filed an intervention with the CRTC expressing concern with the Bell coalition’s website blocking plan, which he confirms “raises serious inconsistencies with Canada’s obligations under Article 19 of the International Covenant on Civil and Political Rights and related human rights standards.” Special Rapporteurs are independent human rights experts with mandates from the Human Rights Council to report and advise United Nations Member States on human rights issues. While many supporters of the blocking plan have dismissed freedom of expression concerns, David Kaye, the expert the U.N. has tasked with making recommendations to member states warns that it may violate Canada’s human rights obligations in several ways.

The Special Rapporteur’s concerns, many of which were echoed in submissions critical of the blocking plan (I identified similar concerns in my post on the issue and in my submission to the CRTC that should be posted shortly), focus on the lack of proportionality, the risk of over-blocking, and process shortcomings with the proposed website blocking agency.

With respect to the lack of proportionality, the Special Rapporteur states:

While the enforcement of copyright law may be a legitimate aim, I am concerned that website/application blocking is almost always a disproportionate means of achieving this aim. Blocking an entire website/application will not only restrict allegedly infringing activity, but also cut off access to all legitimate content on that website or uses of that application. The risk that online expression will be disproportionately restricted is particularly high for websites/applications that are implicated in copyright infringement but also widely used to protect personal identity and security, such as VPNs, proxy services and peer-to-peer networks.

Moreover, the Special Rapporteur notes the chilling effect of site blocking:

Even if a website/application is not ultimately blocked, the mere threat of blocking may have a significant and disproportionate chilling effect on its operation. Rather than risk the shutdown of their website/application, the owner/operator is more likely to err on the side of caution and take down material that may be perfectly legitimate or lawful. The threat of blocking may also incentivize owners/operators to proactively monitor their websites or applications for copyright infringement, increasing the risk of prior censorship.

The Special Rapporteur then turns to another frequently identified concern: the likelihood of over-blocking. Of particular concern is the definition for “piracy”, which “creates the risk that findings of piracy – and the subsequent classification and blocking of “piracy sites” – would be based on unproven or misleading allegations of copyright infringement.” The Special Rapporteur also notes the lack of consideration of non-infringing uses or proportionality. He also warns:

At least two of the proposed factors – consideration of past findings and efforts to evade legal action – appear designed to calculate the likelihood of future infringing activity. The possibility that
blocking orders will be issued to prevent future infringements raises concerns of prior censorship, which is almost always disproportionate.

The Special Rapporteur also has concerns with the Internet piracy review agency, which he says lacks due process in light of procedural shortcomings.  He identifies several problems:

  • Creating a private entity would exempt the IRPA from transparency requirements such as Access to Information rules
  • Concerns that rights holders and ISPs would effectively exert board control
  • The funding model “raises questions of impartiality” since the IRPA would depend upon the volume of website blocking requests and the initial funding would come from the coalition behind the proposal
  • He expresses doubt about whether carriers are equipped to function as neutral gatekeepers in the standards setting process given the state of vertical integration with carriers often also owning broadcast properties

The concerns associated with freedom of expression and human rights have been raised from the very outset of the Bell coalition proposal. While supporters have dismissed the concerns, the fact that the U.N. Special Rapporteur David Kaye identified the need to intervene in the Canadian case and raise concerns about inconsistencies with Canada’s human rights obligations speaks volumes about the dangers associated with the website blocking plan. The Canadian government led by Prime Minister Trudeau and Global Affairs Minister Chrystia Freeland have placed a high priority on human rights obligations and the intervention should attract attention from departments that do not typically focus on CRTC or copyright policy.

The post UN Special Rapporteur for Freedom of Expression: Website Blocking Plan “Raises Serious Inconsistencies” With Canada’s Human Rights Obligations appeared first on Michael Geist.

Conservative MP on Bell Site Blocking Plan: “Canadians Should be Concerned”

Michael Geist Law RSS Feed - Thu, 2018/03/29 - 13:35

After nearly two months of public debate, today marks the deadline for submissions to the CRTC on the Bell coalition website blocking plan. On the eve of the deadline, MPs from both the Conservative and NDP parties have begun placing the issue on the political agenda. NDP MP Brian Masse plans to introduce a motion on a digital bill of rights that will reportedly touch on site blocking. Meanwhile, Conservative MP Matt Jeneroux told the House of Commons earlier this week that Canadians should be concerned about the site blocking proposal:

The fight for net neutrality is extremely important right now. A few months ago, Bell and several other media conglomerates announced a proposal to create a mandatory blocking system for websites that they have arbitrarily determined are inappropriate. Bell’s proposal asks Canada’s Internet service providers to block websites they deem as piracy. The blocking process would take place with little to no oversight by our courts. Obviously, this plan has Internet and net neutrality experts concerned. This plan would seriously harm open Internet access for users and also violates freedom of expression rights.

I will upload my submission once it has been posted by the Commission, but it will largely follow my many posts on the issue:

The post Conservative MP on Bell Site Blocking Plan: “Canadians Should be Concerned” appeared first on Michael Geist.

Federal Court of Appeal Rejects Access Copyright Bid to Overturn Board Ruling on Insubstantial Copying, Fair Dealing

Michael Geist Law RSS Feed - Tue, 2018/03/27 - 09:21

The Federal Court of Appeal last week issued a long-delayed decision in a judicial review of a Copyright Board decision involving Access Copyright and copying by employees of provincial governments. I covered the initial board decision in 2015, noting that it delivered a devastating defeat to the copyright collective. Access Copyright filed for judicial review of the decision. Last week the Federal Court of Appeal upheld the Board’s decision.

While much of the decision involves a legal analysis of the standard of review, copyright watchers will be particularly interested in the discussion on insubstantial copying and fair dealing. The insubstantial copying aspect of the decision was very important, as board established a standard: 1 to 2 pages of a work, not constituting more than 2.5 percent of the entire work. For limited copying of this kind, fair dealing does not even enter into the analysis, since the Copyright Act only protects a work or a substantial portion thereof. Mirroring efforts to develop reasonable percentages for fair dealing, the Board developed a standard as a reasonable approximation of what constitutes insubstantial copying.

Access Copyright argued strongly against the use of a bright-line test for insubstantial copying (much like it argues against such a test for fair dealing). The court, however, was very supportive of establishing a standard:

There is much to be said for the Board’s adoption of a bright-line rule. It provides guidance to government employees concerning what copying is permitted because it is insubstantial. The respondents other than British Columbia suggest the following (at para. 107 of their memorandum) and I agree:

In the absence of the bright line rule adopted by the Board, individual government employees would obviously reach widely varying conclusions as to what is, and is not, a substantial part of a published work. One employee, for example, could consider 1% of a work to be substantial while another could set that threshold at 5%. To avoid such different, and likely conflicting, interpretations as to what the term “substantial” means, [we submit] that the bright line rule established by the Board is entirely reasonable.

Under the reasonableness standard, the Board is permitted a significant margin of appreciation in determining the method by which the tariff should be set. Based on the foregoing, I am not persuaded that the Board proceeded in an unacceptable or indefensible way.

This aspect of the decision is hugely important for three reasons. First, it confirms that 1 to 2 pages of a work, not constituting more than 2.5 percent of the entire work, can reasonably be viewed as insubstantial copying. That standard will be useful for short excerpts that do not even trigger a fair dealing analysis.  Second, the insubstantial standard helps support the reasonableness of up to 10% of a work constituting fair dealing since it must obviously involve considerably more than 2.5% of a work. Third, the court’s support for a bright line rule undermines Access Copyright’s arguments against such an approach with fair dealing. Indeed, the court recognizes that standards benefit both creators and users by providing greater certainty and consistency in approach.

Access Copyright also argued against the Board’s interpretation of fair dealing. In my summary of the board’s decision, I noted:

Access Copyright tested the same fair dealing theories that it uses when contesting the education communities’ fair dealing approach. It lost on every claim. Indeed, the Board’s approach is consistent with the fair dealing guidelines that have been adopted by universities, colleges, and K-12 schools.

While Access Copyright was successful at trial in the York case, that case is now under appeal. In this case, Access Copyright had unsuccessfully argued before the Board that the fair dealing user is the government, not the individual employee making copies; the government was hiding behind the employees’ permitted purposes; and the need to consider aggregate copies as part of the character of the dealing. If these arguments sound familiar, they strongly echo arguments in the York case. The Board rejected Access Copyright’s arguments and the Federal Court of Appeal just upheld the Board’s conclusion:

in its assessment of fair dealing the Board faithfully applied the teachings of the Supreme Court to the particular evidence in this particular case, assigning weight to the evidence before it as it is entitled to do. It reached a conclusion that was acceptable and defensible.

As the York case winds its way through the appellate process, this Federal Court of Appeal decision could prove pivotal, upholding many of the arguments from the education community and providing further evidence of the mistakes made by the York trial court judge.

The post Federal Court of Appeal Rejects Access Copyright Bid to Overturn Board Ruling on Insubstantial Copying, Fair Dealing appeared first on Michael Geist.

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