The Wild West lawlessness of the digital marketplace: who wears the white and black hats?

An article by Greg Sandoval, Staff Writer, CNET includes:

Warner Music Group reported on Friday soaring digital music sales, even as the company continues to lose money and faces numerous lawsuits related to alleged price fixing of music downloads.

In documents filed with the Securities and Exchange Commission, Warner Music said the company has been named in 14 class-action lawsuits, most of which allege a "conspiracy among record companies to fix prices for downloads."

I have to admit that I agree with Graham Henderson that there is currently a "wild west" feel to the digital music marketplace. We seem to both agree that we need to move into the "rule making" phase to create laws to deal with the current lawlessness. Where we greatly disagree is who are the "white hats" and who are the "black hats" in this western.

All evidence suggest that it is the members of his industry association, the Big 4 foreign major record labels (Universal Music Group, Sony BMG Music Entertainment, EMI Group, and Warner Music Group) that are the "black hats".

a) The Big 4 are lobbying to change the law to make it easier for them to sue music fans without evidence of infringing activities.

Contrary to what CMCC members said in Toronto on Monday, current Canadian law does allow the labels to sue people who share music online without the authorization of the copyright holder. What Canada offers over US law is privacy protection, meaning that copyright holders must provide evidence of infringing activities before the courts will force the disclosure of the names of those aleged to be infringing copyright.

In a world that otherwise believes in "innocent until proven guilty", it is a fundamental breakdown of the legal system to be changing the law to make it easier to sue citizens without adequate evidence of wrongdoing.

b) The Big 4 are advocating legal protection for the lawlessness of copyright holders applying technical measures to things which they do not own. While copyright holders may "own" the copyright on the work of the mind, and should be allowed to apply a technical measure to what they own, they should not be legally allowed to apply a technical measure to the technology used to create, distribute or access that work. The current common practise of copyright holders applying technical measures to devices they do not own should be clearly outlawed.

c) The Big 4 are advocating doing away with privacy, competition and property law in the digital marketplace. Canadian privacy law says that you can't condition the provision of a product or service on the waiver of privacy rights (Section 4.3.3), competition law says you can't tie the purchase of one product to the mandate purchase of another (Section 77: tied selling, refusal to deal), and property law offers that the owner (and not a third party) should be protected to use what they own for any lawful purpose.

The DRM which these labels are advocating includes a tie between content that has a technical measure applied to it and the purchase/use of devices which also have a technical measure applied to it by these non-owners of the technology. This is a circumvention of property law, privacy law and competition law all rolled into one.

The price fixing charge mentioned above is just one of the many common activities of The Big 4 which are either currently illegal, or in a modern society after adequate rule-making would be illegal.

As to what the labels are asking for: the trivial way to solve the problem of people not paying for the sharing of music online is to legalize and monetize it. On Monday some reporter tried to paint this as some sort of "socialist" agenda, with Steve Page (I believe) clarifying that this is only "socialist" if you believe that what legalized and monetized cable television is socialist. There is no legitimate reason to demand both permission and payment for the non-commercial sharing of music while current law doesn't require permission for commercial radio or cable television.