INDICARE: It is evident that the position paper of BEUC is kind of "minority report" with respect to the report of the HLG on DRM (cf. INDICARE Monitor Vol. 1, No. 2, 30 July 2004). It is clearly stated that no consensus of industry view and consumer view could be achieved, and that the HLG dismissed dealing with consumer acceptance and trust issues as scheduled at the outset. What are the main points where BEUC dissents from the industry view?

C. Kutterer: We object both to the content and also to the omissions of the parts dealing with migration to legitimate services and levies. We feel that without the recognition of consumer rights and the wider public interest these parts fall short of their purpose. The main points of disagreement are touched upon in our paper but take the example of the following statement: “the way forward is a system based on existing exclusive rights backed by technologies that ensure a secure environment where such rights can be licensed and enforced”. This is clearly not a balanced approach with recognition of consumer rights or limitations to the exclusive rights. Or look at the reference on the origin of the private copy in the 1960s in Germany. This omits that de facto non-enforceability of the reproduction right was based on a conflict with the inviolability of the private sphere. It further states “alternative compensation schemes or similar measures are clearly not the way forward for the dissemination of content in digital networks and for the development of new and innovative services”. We would not support DRM to the extent that it excludes even a discussion on alternative schemes. As for the paper on migration to legitimate service, we simply do not support the usual lamentation about private copying that ruins the entertainment industry. We also have clear doubts about balance as regards the industries’ interest of raising consumer “awareness” and “acceptance”.

INDICARE: Was the difficulty in achieving consensus in the HLG a result of the composition of stakeholders chosen?

C. Kutterer: A consensual approach to achieve appropriate conditions of digital rights - which meet the interests of all stakeholders – is a meritorious goal we share. We welcome the Commission’s attempt to offer stakeholders a platform for discussion in order to reach consensus on DRM. However, the more diverse interests are, the more difficult it becomes to achieve consensus and time constraints were not helpful. But we also must accept that where consensus cannot be achieved (without foreclosing further discussions) political decisions may be necessary.

INDICARE: Let me add a more general question about the configuration of stakeholders concerned with DRM and the relation of BEUC to them. We can imagine that parts of the industry sympathise more with BEUC and consumer interests than others. One could also expect that civil rights NGOs, scientific organisations are natural allies of consumer organisations. How would you characterize the formation or configuration of stakeholders and the position of BEUC in this?

C. Kutterer: Yes, I believe some parts of the industry “sympathise” more than others with our interests. More importantly, we find it regrettable that scientific organisations (for example cryptologists), civil rights NGOs or privacy advocates were not presented in the HLG. We do share many concerns with them but this does not make them dispensable. Within the group we were the only consumer/user representation.

INDICARE: I could imagine that there is more overlap of interests between BEUC and part of the IT industry than with copyright industries?

C. Kutterer: In delivering the devices for content distribution the IT industry seems to be more concerned with consumer interests. But we agree with the copyright industry that creative work must be adequately protected and compensated. The main question is what adequate protection means.

INDICARE: As the position paper demonstrates, DRM it is not just about consumer rights, but about civil rights and societal concerns too. How does, let's say a classical consumer organisation like BEUC define its spheres of competence in DRM matters? Is delineation of spheres a problem in the DRM field if we think e.g. of the overlap with data protection and privacy advocates, or civil rights organisations?

C. Kutterer: In the digital environment consumers are subject to privacy laws as much as they are part of the society; they may even become authors, editors, producers and distributors of informational goods (Wikipedia is a good example). There is no strict borderline in defending the rights at risk. Delineation of spheres is clearly not a problem.

INDICARE: When did BEUC first get concerned with DRM?

C. Kutterer: BEUC has been actively involved in policy making during the legislative process of the Information Society Directive. In that context we were very concerned about the extensive protection of technological measures. Obviously copy protection has been topical before.

INDICARE: What exactly is the purpose of this paper and why was it due right now?

C. Kutterer: The final report failed to address the fourth subject, that is “acceptance and trust by users with particular emphasis on security and privacy” and falls short of considering the broader interests at stake, in particular consumer rights which we defend. We are addressing the topic. DRM deployment is a key priority for us (and our members) and merits high consideration in the light of the ongoing implementation of the Information Society Directive as well as the forthcoming review process on the application of technical measures under the aegis of the Contact Committee. The Contact Committee represents competent authorities of the Member States which will examine the impact of the Information Society Directive on the functioning of the internal market, explore difficulties deriving from the application of this Directive and assess the digital market in works, in particular private copying and the use of technological measures.

INDICARE: It will be impossible to cover all aspects you address in your position paper. Therefore I will just pick out some items which raised a special interest, and about which I would like to learn more. To start with, it was interesting to note that even with respect to the interoperability part of the HLG report where consensus was reached, the position paper now adds further interoperability requirements. Could you explain why the HLG report falls short even with respect to interoperability?

C. Kutterer: We felt it was necessary to refer to interoperability also in regard to future generations of devices.

INDICARE: Talking about interoperability leads inevitably to standards and standardization as addressed in the position paper. You put forward that consumers should participate at all levels of the standardisation process in order to ensure that privacy and data protection concerns become integral part of standards. How could this wish be put into practice and what role could BEUC play in this? I can imagine that the organisational embedding will be difficult, think of e.g. participation in DRM standardization efforts of the Open Mobile Alliance. I can also imagine that it will be very hard to gain the technical competencies to evaluate the different technical approaches like Rights expression languages etc.

C. Kutterer: We suggest that compliance with data protection laws and consumer rights should be verified as early as possible, at best when developed. Consumer organisations take an active role in standardisation bodies and provide technical expertise (ANEC, the European Association for the Co-ordination of Consumer Representation in Standardisation, is the European consumer voice in standardisation). However, this is clearly not the case when proprietary standards are set or developed by private consortia.

INDICARE: If we assume that participation and co-operative shaping of technology is a very hard task for a consumer organisation, why has BEUC chosen this approach, instead of traditional lobbying?

C. Kutterer: This is not an approach instead but in addition to our efforts in policy making. “Shaping of technology” will surely not be enough to ensure that consumers have the rights they should have in the digital environment.

INDICARE: There are good reasons to centre the debate on DRM on the Copyright Directive. However it would be interesting to know from a consumer organisation, if and how far consumer protection rights could be extended in order to counter-balance the weaknesses of copyright legislation and to safeguard consumer interests?

C. Kutterer: In the first place, we call for enforceable copyright limitations which cannot be overridden by contract terms or deployment of DRM systems. We advocate a `fruit of the poisoned tree' rule that would allow for legitimate circumvention of technical measures where that technology has been used to hinder or restrain usage that is not relevant under the copyright law (for example, personal appropriation of a work like cracking in the regional control mechanism of a DVD). This said, we suggest that consumer protection law should provide an additional tool to safeguard consumer interests in this context. This field must be further explored. Consumer law must be capable of restoring the disequilibrium that characterizes consumer contracts in the digital environment by ensuring balanced formation of consent, avoiding procedural and substantive ambiguity, and providing rules on redress and refund. Last but not least, competition law must ensure a competitive environment to deal with the likelihood of unlawful extension/leveraging of dominance into second markets through DRM deployment (think of printer cartridges and automobile electronics, or the announced acquisition of ContentGuard by Microsoft and Time-Warner).

INDICARE:
BEUC asks for fair commercial practices and hints at some examples where this is currently not the case (e.g. the regional code of DVDs). Do you think that the proposed directive "concerning unfair business-to-consumer commercial practices" COM (2003) 0356 will improve the situation for consumers with respect to DRM? Has BEUC been involved in the shaping of this proposal?

C. Kutterer: We generally need further discussion on contract law and consumer protection law in this context. The unfair commercial practise proposal is a key instrument for consumers (and consumer organisations) and will serve as a safety-net against rogue traders. The proposal may be relevant to digital distribution of content but mandatory information obligations on usage-impaired works and information on national copyright limitations must be set. We are also paying attention to the forthcoming revision of the directive on unfair terms in consumer contracts. The unfair terms directive could play a centre role in achieving a balance in the digital distribution chain to reduce illegitimate usage restriction of legally acquired works while maintaining the positive effects of the DRM model. What is necessary is that we look at the effects of application of certain contract terms.

INDICARE: In the US there is currently a debate about the proposed Digital Media Consumers’ Rights Act (DMCRA) put forward by Congressman Rik Boucher in order to re-establish fair use conditions. As "enforceable consumer rights" are high on the priority list of BEUC, you probably have assessed the American way to strengthen "fair use". What can Europeans learn from the US and what should the European way look like?

C. Kutterer: Many of our demands such as labelling requirements for usage-impaired "copy-protected" CDs or the prohibition of foreclosing non-infringing uses through technological measures can equally be found in the proposed DMCRA. We fully support the intention of this proposal. Obviously, the legal frame provided by the U.S. presents relevant differences but some issues that are valid in both jurisdictions have been less explored in the European debate, for example the validity of contractual derogations. In the U.S. debate, much more attention is also drawn to efficiencies, which inherently take the wider perspective, i.e., the benefits for society into account.

INDICARE: The issue of collecting societies and in particular levies is very controversial, while your statement clearly says that the current levy system is unfair and should be ended quickly. I would have expected this statement from device manufacturers, and was surprised by this clear-cut statement. In my feeling there is a slight contradiction in your reasoning, or I have simply missed the point: On the one hand there are many good reasons you mention why DRM systems should be deployed cautiously if at all, especially because the risk is high that usage rights like private copy will be undermined. On the other hand you are in favour of abolishing levies as soon as possible, because DRM systems are available. Their deployment of course would increase the risk that the right to the private copy will be undermined. Can you help me to get your argument right?

Let me add another remark before you answer: Is there enough empirical evidence for your reasoning? Supposed 80% of blank disks (price 50 Euro Cent or less) were used to copy CDs or downloaded music, wouldn't it be fair to put at least a slight levy on them to compensate creators and rights holders?

C. Kutterer: We do believe in the need to compensate creative work. But we do not accept double payment. Most consumers are unaware that levies are embedded in the price of many products capable of recording music. Some European countries have opted for levies, which apply to blank media, reprographic equipment and equipment with a recording function, whilst others do not raise any levies at all. Does that seem to be reasonable and fair? These objections to the levy regime, however, do not make DRM deployment a solution without flaws and risks.

INDICARE: In your paper you ask policy makers to refrain from mandating DRM. The association coming to mind is of course the "broadcast flag". Do you envisage that we soon will have a debate about the broadcast flag, and what will BEUC do?

C. Kutterer: We are not aware of any plans to mandate DRM. But we are concerned that in the context of the treaty "on the protection of the rights of broadcasting organizations” negotiated at International level (WIPO) this may become topical.

INDICARE: The position paper obviously addresses the European Commission. What are the next steps you recommend to policy-makers in order to make progress on the consideration of consumer concerns in DRM?

C. Kutterer: DRM causes serious risks to consumer rights and societal rights and we urge the Commission to actively engage in exploring these risks. We need a better solution in a highly dynamic Information Society to adequately take into account the public interest. We therefore urge the Commission to look at these risks when reviewing IP law and to strengthen the effectiveness of data protection laws. We suggest that the Commission should convene a similar HLG on the dangers of DRM and refrain from becoming a promoter of certain industry interests or the promoter of “awareness” under the agenda of these industries. We call on the Commission to become aware of the contractual implications and consumer law aspects that are at stake and we support the use of competition law to encounter abuse of intellectual property by using technology and cross-licensing to foreclose entry to markets.

INDICARE: I think we can leave it at this for the moment. With your last answer summarizing BEUC's policy recommendations we have reached a good final point, and now it's up to INDICARE to see what will happen. Thank you very much for this very informative interview and your willingness to also answer questions beyond the position paper.

Contact: Cornelia Kutterer, BEUC The European Consumers' Organisation, Avenue de Tervuren, 36 Bte 4, B - 1040 Brussels, Tel: 02 - 740 28 10, E-mail: cornelia.kutterer@beuc.org; Website: http://www.beuc.org

Status: first published in INDICARE Monitor Vol. 1, No 4, 24 September 2004; licensed under Creative Commons
URL: http://www.indicare.org/tiki-read_article.php?articleId=46