kNOw Future Inc.

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Closed Door Policy Shaping at the EOCP

in July 2009, three months after the McCreevy’s announcement of the European Observatory on Counterfeiting and Piracy (EOCP), a ‘stakeholder dialogue on illegal up and downloading’ was launched under its auspices and the direction of Margot Fröhlinger, Director for Knowledge-based Economy at DG Internal Market.

The goal was to achieve an accommodation between content owners and the infrastructural intermediaries. From the beginning the Commission have indicated that should the parties fail to come to voluntary agreements, the EC will amend one of its directives and impose a solution: E-commerce Directive (2000/31), the Infosoc Directive ( 2001/29) or the Enforcement Directive (2004/48).

Users and Consumers Missing from the Equation
Representatives of media companies, trade associations, collecting societies and ISPs have been involved in the monthly meetings. European Consumer group BEUC refused to participate, and, whether for wont of an invitation or lack of interest, no organization representing consumer or user interests was involved.

In their absence the only opposition to the proprietary media agenda comes from the trade associations of the telecommunications providers (ETNO) and ISPs (Euroispa). But the interests of users and these industries are not identical. For example, were there to be more joint ventures between them and the content industry, user services could be unilaterally restricted. Bizarrely, it is reported that during a dialogue session in June 2010, Fröhlinger suggested that the content companies might offer ISPs more favorable licensing conditions in exchange for cooperation on fighting piracy. This suggestion was quickly retraced on when it was recalled that competition authorities might not look kindly on such a scheme…

In the background to these discussions lies the shadow of the ongoing Scarlet v Sabam litigation which was heard in the European Court of Justice in January. The reference to the ECJ asks, essentially, whether national law can oblige an ISP (Scarlet) to put in place a filtering mechanism to prevent the unauthorised sharing of copyrighted works via P2P. A decision is expected in the autumn.

Opposing Sides of Industry
As a consequence there is a sort of trench warfare within the stakeholders dialogue. On the one hand the content owners want greater liability for ISPs, so as to force them to police their users. In their mind piracy is to blame for the slim success of their online content sales. Their favoured solution is still a technical intervention at network level to identify and stop p2p traffic, of which they insist more than 95% is infringing.

For their part ISPs argue that it has been the substandard alternatives of the content-owners, their unwillingness to license on adequate terms, and refusal to experiment with new business models which has driven people into piracy. But principally the ISPs reject any attempt to make them police their users, pay for the installation of any of the technical solutions perennially proposed, or install a system to gather information on acts of infringement.

The Practicalities of Filtering
As part of the Scarlet v Sabam case the Belgian Court was supplied with an expert report by Sabam on the various means whereby an ISP can block sites hosting, and data transactions constituting, infringement copies. For purposes of blocking p2p exchanges the conclusion was that only Audible Magic’s Copysense program was adequate to the task. This system entails the checking of a hash of any exchanged file against a database of copyrighted works. Sabam claimed that this system had already been tested by two ISPs successfully. In fact it turned out that there were no documented cases of its deployment by ISPs.

Data Protection and Enforcement Action
The February 2010 session was dedicated to presenting various strategies for gathering information and evidence on infringements, including details about trials conducted in the UK by ISPs and rightsholders, and the technical basis for the Hadopi law.

As was noted in an earlier post, data protection law has been interpreted in several jurisdictions (eg Spain, Austria) as a bar on the identification of users for litigation purposes. The stakeholders dialogue commissioned two reports on this matter covering a total of nine jurisdictions. Yet no representative of any Data Protection Authority or privacy organisation has been invited to participate as a ‘stakeholder’.

The Enforcement Production Line
In the April 2010 session Frohlinger made the curious claim that at the time of IPRED 1, online infringement wasn’t such a major problem and thus the time was ripe to readdress the issue. This claim is especially strange given the scale of the public outcry regarding the threatened use of criminal law against p2p users…

Information on the scale of the current campaign was provided by various private enforcement organisations and companies. Between 2004 and 2009 the IFPI instigated cases against 125,000 users worldwide, not including the US.

In France, the SCCP (a collecting society) argued that the pre-Hadopi legal framework was designed to deal only with ‘professional pirates’ and were ill-suited for use against the general population. Prior to 2010 just 300 internet connections were terminated as a result of civil actions in the preceding three years.

Constantin GMBH, a German film company, presented its local enforcement strategy at the same meeting. After monitoring p2p transfers to collect IP addresses, they get permission from the courts to identify the user involved from the ISP. Letters to the users demand they cease distributing the works and ask for compensation, claimed to be in the region of 450 euros although individuals of my acquaintance have been asked for more than double that.

A Comparative Parenthesis…
The Constantin approach strongly resembles the approach of the RIAA in the United states, whereby private settlements against those identified as sharing partially finance the enforcement engine. This system in Germany has generated a veritable enforcement industry amongst lawyers, and not only on the side of the plaintiffs. At least two practices have now got hundreds of putative defendants on their books, each of whom are charged 600 euros for defense against current and future complaints. Last summer in Berlin I attended a meeting where a number of those on the receiving end of these threats were present; many had no idea of what p2p meant and it was clear that their connections had been used by others, be they strangers on a WLAN or their children/grandchildren.

Dark Clouds of Transparency Gather…
Following the publication of fragments of these meetings on the french technology forum PCinpact in September 2010 , it was subsequently reported on by Monica Horten on her iptegrity blog. Her concerns centre on a mooted Memorandum of Understanding (MoU) between ISPs and rightsholders, and on the fact that the whole process has been utterly opaque. As regards to the lack of openness, she is bang on the money: at the session following publication of PCinpact’s account, Frohlinger commented on the leak, stating that should those responsible be discovered they would be banned from any further participation. At the tenth meeting in October 2010 she further announced that as public representatives were now asking for access to documents circulated as part of the process, there would be far fewer – an interesting response to demands for transparency!

No Cause for Panic… Yet
As far as the MoU goes however, it seems to me that the fears are a bit overstated. A close reading of the record reveals the ISPs and Telcos resolutely refusing to cave in to the logic of the rightsholders, so the content of any potential MoU would be insignificant and probably largely focussed on ‘public awareness’ regarding respect for copyright. Certainly agreement over the employment of technical measures to monitor and restrict user behaviour seems to be off the cards.

The stakeholders dialogue was originally conceived as an attempt to find a voluntary agreement more quickly than than the time required to come up with a legislative fix. It failed. This does mean that there will liklely be an open political fight starting over the next nine months,and the battleground will certainly be the European Parliament.

March 10, 2011 - Posted by | /, copyright, ECPO, enforcement, european directives, intellectual property, law, p2p

2 Comments »

  1. […] activity have dominated the attention of the ECPO since its inception: the rather insipid sounding ‘stakeholder dialogue on illegal uploading and downloading’ and a subgroup working on a review of the implementation of IPRED1 and proposals for the future. […]

    Pingback by Inside the European Counterfeiting and Piracy Observatory « kNOw Future Inc. | March 10, 2011 | Reply

  2. […] Naturally Belgacom, the current owners of Scarlet also expressed satisfaction with the result, which comes more generally at a time when rightsholders have been trying to corner ISPs into more intense policing of their users, an operation to which the European Commission has also been party. […]

    Pingback by SABAM Knocked Out at the ECJ « kNOw Future Inc. | November 25, 2011 | Reply


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