Introduction
The ease of digital copies has challenged traditional business models by lowering the cost and effort of reproduction and distribution. Different business models for content delivery compete in a fast developing technological environment. As a result, values such as the protection of Intellectual Property Rights (IPRs) on the one hand and the protection of the private sphere and consumers on the other seem to be more and more at odds.

Even voices from industry confirm the threat. In the words of Gary Shapiro, president and chief executive of the Consumer Electronics Association (CEA): "In the rush to crack down on pirates, we risk eliminating a critical consumer right – the right to use copyrighted material, without the permission of the copyright owner" (quoted in Taylor and van Duyn 2005).

But generally industry tends to ignore the interests of consumers. A notorious example is Sony BMG’s director for digital business, Thomas Hesse, who stated when debate about the Sony BMG debacle over its intrusive DRM system heated up: "Most people, I think, don’t even know what a rootkit is, so why should they care about it?"(quoted in Orlowski 2005; cf. Bohn 2005 for more debate on the Sony BMG debacle; cf. also Doctorow 2005a). It may possibly be true that many consumers are not aware of DRM (cf. the results of the INDICARE survey, Dufft et al. 2005), let alone the effects it may have on their private lives. But does that mean that they shouldn't care about it? Can we watch the societal shift from young people taping at home in a private sphere to a generation surveyed and criminalized?

Facing these threats, it seems astonishing to the naïve reader that Charlie McCreevy, Commissioner for Internal Market and Services, stated in a recent speech before the BSA (European-American Business Council/Business Software Alliance) that "the pure technology issues such as the robustness of the technology, the acceptance by consumers can be left to the market" (McCreevy 2005). Another example of the weak standing of consumer interests in public policy is the "EU-US Initiative to Enhance Transatlantic Economic Integration and Growth". While the Commission has acknowledged in a draft implementation paper of this EU-US Initiative that there is – in respect to DRM and technical protection measures a need of "taking due account of public policy interests, such as the promotion of fair competition and consumer rights, with a view to identify best practices", in the final version this sentence was deleted - due to US pressure (cf. EU-US 2005).

Consumer organizations have been denouncing for a long time shrinking consumer rights in the digital environment (cf. e.g. BEUC 2004) but remained so far unheard by European policy makers. It is against this background that on 10 November BEUC, the European Consumers’ Organisation, launched a Campaign on Consumers' Digital Rights supported by Zusana Roithova, Member of the European Parliament. The Sony BMG story merely underlined the necessity for this campaign and revealed that many of the issues addressed are not only "potential but unlikely risks" instead these risks have materialized. In the following we will point out some more European and international developments threatening consumers' rights by fostering technical protection measures and expanding criminal law. They all demonstrate the need for our campaign.

Blurring the boundaries between commercial and non-commercial copyright infringement
The entertainment industry has successfully watered down specific terms or extended their scope in commonly used language – such as piracy. What is piracy? It is an imprecise term for copyright infringement – in the first place – because it disregards the necessity to differentiate between non-commercial and commercial copyright infringement. While some "pirated content" is simply infringing (you upload a copy-protected music file on a P2P net without permission), other is commercially infringing (somebody sells an illegal copy). The impact of each is different. Conflating them under the "piracy" banner is nonsensical. By the way, conflating non-commercial infringement of copyright under theft is nonsensical as well.

In the 90s, the Commission was willing to distinguish commercial infringement of copyright (=piracy) from non-commercial copyright infringement:
"Piracy … embraces the unauthorized reproduction of works protected by copyright or allied rights for commercial purposes as well as all subsequent commercial dealing in such reproductions. The commercial purpose and frequently the scale on which the activity is carried out are characteristic features which distinguish the practice from other forms of unauthorized reproduction or use such as home copying. Piracy in this sense includes bootlegging, that is, the unauthorized recording of performances and the subsequent marketing of copies of the recording. It is frequently associated with counterfeiting, that is, unauthorized use of a legitimate product commercial presentation, in particular, its trade mark or some other protected indication" (EC 1988).

Today, it appears that the Commission no longer distinguishes these two different types of infringement. But blurring these boundaries leads to excessive reactions that may have deep, irreversible and adverse effects on our society, technological development and the private sphere.

In a highly controversial and often hostile debate about the scope of IP protection, recent developments in the political debate tend to be excessive, disproportional, lop-sided and do not take into account the existence of many discussions on how to improve creativity, access to knowledge and the legal use of technology. Instead, the law of unintended consequences is being provoked. Some examples:

Criminalization of consumers
In a recent proposal adopted by the Commission in July 2005, the Commission aims at introducing and aligning national criminal law provisions against infringements of IPRs. Under the proposal, infringements of any intellectual property rights are treated as criminal offences if undertaken intentionally and on a commercial scale. Similarly, attempting, aiding and inciting such infringements are considered criminal acts.

The problem is that the definition of "commercial scale" is not set out, and does not explicitly require financial benefits, profit or a commercial motive for activities to be identified as taking place on a "commercial scale". This may straightforwardly lead to private non-commercial (but infringing) uses being criminalised as of potentially commercial scale (the issue – rejected during the 2004 Enforcement Directive debate – is thus back on the agenda). The inclusion in criminal behaviour of activities collected together under "aiding or abetting and inciting such infringements" is imprecise and far too inclusive of activities that are entirely legal. Thus, it is possible that an email noting the existence of a piece of peer-to-peer software might be regarded as an incitement to infringe intellectual property rights.

Data retention
At the time of writing, the European Parliament is discussing and adopting a controversial compromise proposal to revise Article 15 of EC Directive 2002/58 that will introduce extensive common rules on data retention (On 14 December, the European Parliament approved at first reading (by 387 votes to 204 and 30 abstentions) the proposal for a directive on telecommunications data retention in the fight against terrorism and organised crime) despite the fact that the European Data Protection Supervisor and the Article 29 Working Party of European Privacy Commissioners have repeatedly stated that the case for retention has not been made and that the scope of that proposal is not proportionate (ARTICLE 29 Data Protection Working Party 2005): The European Data Protection Supervisor has also stated in his opinion, the mere existence of data might lead to increased demands for access and use by industry, law enforcement authorities, and intelligence services.

In the first place, data retention was considered necessary to combat terrorism. The adopted compromise foresees access to this data to combat all serious crimes (a term to be specified by the Member States). The CMBA, Creative and Media Business Alliance, however, lobbied strongly to include all crimes:
"The scope of the proposal should include all criminal offences. The Directive, as proposed, is limited to the prevention, investigation, detection and prosecution of serious criminal offences such as terrorism and organized crime (Article 1.1). The position of the CMBA is that the scope of the proposal should be extended to all criminal offences. Limiting the proposal to serious offences would hamper the effectiveness of the Directive and the enforcement activities for other forms of criminal offences. Once an illegal activity is considered as a crime in a Member State, the enforcement authorities should have adequate means to prosecute it" (CBMA position on data retention of 22 November 2005).

CMBA would like to use a piece of legislation intended to fight terrorism in order to get hold of P2P-users that infringe copyright (cf. Cronin 2005). Obviously, non-commercial infringement of copyright must be made a crime in the first place.

Internet Services Providers’ control of data
Other initiatives also aim at getting hold of the same data. A group of entertainment industry and Internet Service Providers is discussing with the European Commission – in a so-called "Sherpa group" – how best to cooperate to fight piracy (here it seems, the term piracy is used only for non commercials infringements).

The group is seeking to develop a charter on best practices in order to fight unauthorized file-sharing. The envisioned system would entail a graduated response system ultimately shutting down Internet connections of customers who engage in unauthorized file-sharing. The CMBA issued a statement on the charter on 2 November: "At its core, it should consist of a couple of escalating notices to infringers, culminating in termination, or at least suspension, of subscriptions for recidivists" (CMBA position paper on a EUropean Charter for on-line content of 2 November 2005). A similar procedure in France involved automatic systems to detect copyright infringement on peer to peer networks, and to force internet service providers to translate a given IP-address into an e-mail address and forward a 'pedagogical' e-mail message from the societies to their customer before commencing civil or criminal actions. But the French Data Protection authority CNIL strongly rejected this approach as being disproportional (cf. CNIL 2005).

Using ISP's and their contracts as enforcement vehicles raises a number of issues not least privacy but the CBMA statements on privacy wipes away these concerns: "It has become fashionable for some to claim data privacy constraints to plead against effective actions to tackle infringing activities by individuals. ….. Data protection should not be an impediment to the reasonable retention, preservation and access to evidence for legitimate purposes. It is essential to ensure that infringing activities are not protected by anonymity" (ibid.) The group further tackles liability provisions in the E-commerce directive: "Such a step could serve as one indicator to justify benefiting from the safe harbor provisions of the Electronic Commerce Directive that limit the liability of certain intermediaries under certain conditions" (ibid). This coincides with the Commission initiative to set up an expert group (comprising member states) to discuss the development of the e-commerce directive, in particular regarding ISP liability provisions (a Commission study on this topic is foreseen, see http://europa.eu.int/comm/internal_market/e-commerce/index_en.htm). But take down notices have proven to have little effect, easy to abuse and to come with chilling effects (cf. Urban and Quilter 2005).

Traceability – DRM requirement
NAVSHP
Other initiatives tackle the traceability of data. On September 13, 2005, the "Networked Audiovisual Systems and Home Platforms" group (mainly comprising interested companies) released a paper called "NAVSHP (FP6) DRM Requirements Report (NAVSHP 2005). This is a set of technical and commercial requirements for developing DRM. The purpose of the document was to promote common understanding within the NAVSHP, which in their research work has to tackle the DRM issue, to allow discussion and mutual help on this very complex issue. While the Commission has made explicit that it will not be bound in any way by the output of this activity and that there was no direct discussion on policy, possible legal requirements, etc. – it has also acknowledged the document's deficiencies in these areas.

The DRM specifications require for example: "There is a need to give the DRM system the ability to later prove consumer selections or actions that need to be monitored, in front of a 3rd party. This information can only be disclosed to appropriate authorized systems, in specific and clearly announced cases." Other requirements also treat users as infringers. It has never been questioned whether DRM should include traceability requirements at all. (for criticism cf. Doctorow 2005b).

DVB
Similar attempts to describe DRM specifications are made by an industry group called the Digital Video Broadcasting Project (DVB). This is an industry-led consortium (with no consumer participation) of over 260 broadcasters, manufacturers, network operators, software developers, regulatory bodies and others in over 35 countries committed to designing global standards for the global delivery of digital television and data services. Its sub groups, CM-CP and TM-CPT, are working to develop the Content Protection and Copy Management (DVB-CPCM) system for managing distribution, copying and redistribution of television content (cf. in this INDICARE Monitor the article by Hibbert 2005), akin to the US "Broadcast Flag" which has been successfully stopped in a recent US court of appeal decision. DVB-compliant solutions will effectively hinder or prevent consumers from recording free over-the-air broadcasting for legitimate time-shifting usages (for criticism see Doctorow 2005c). It will be now submitted to ETSI standardization.

Bottom line
These recent developments and initiatives show that the balance between the rights of the right holders and the rights of consumers is neither achieved nor maintained but instead ever more threatened. Consumers’ organizations have to be very vigilant in the near future. The European Commission has announced a review of a set of directives related to copyright, in particular the reform of copyright levies applied to equipment and media used for private copying and a review of copyright term, above all, term for sound recordings are included in the review. Consumers’ organizations will also need to look at the contractual side and pay high attention to abusive terms in services. An initiative report on consumer protection in the digital environment by the European Parliament could certainly help to address this issue.

A good sign came recently from The German Federal Supreme Court. It stated that "the necessary balance between the constitutionally protected rights of the right holders to exercise their rights and the constitutionally protected interest in competition, i.e. to be able to evolve freely outside that protected scope, would not be guaranteed anymore if the right holder could claim protection to an extent to which he is not entitled…" (BGH 2005). The court adds that this objective distinction between the scope of IP protection and the freedom of competition must also be balanced in regard to the means of enforcement. We believe that the statement is fundamental and should be reflected in all initiatives at hand.

Sources

About the author: Cornelia Kutterer holds the position of senior legal advisor at BEUC, the European consumer organisation. She is responsible for the legal department focusing on consumer protection law, contract law, passenger rights, intellectual property and information technology laws. She is a qualified German lawyer and holds a master’s degree in information technology and communication laws. Contact: CKU@beuc.org

Status: first posted 20/12/05; licensed under Creative Commons
URL: http://www.indicare.org/tiki-read_article.php?articleId=162