A Master Class in Deception: Analysis of CCIA’s Submission on a Possible US-EU Trade Agreement
by Neil Turkewitz
In response to a request for comments from USTR concerning Negotiating Objectives for a U.S.-European Union Trade Agreement, the Computer & Communications Industry Association (CCIA) has filed one of the most astonishingly ill-considered and deceptive documents I have ever seen…and that’s a pretty high/low bar. Essentially, they ask the US Government to try to persuade the EU to commit to refrain from legislating anything having to do with internet conduct, arguing that investments have been made on the basis of existing legislative frameworks, and suggesting that any change would essentially represent a form of regulatory taking. This, from the supposed captains of innovation and disruption. Apparently, they’re fine with disruption of people, labor markets, artists. Disruption of exploitative tech models? Hmmm, not so much. Everyone needs certain boundaries, right?
Within the confines of a single blog of a length that I hope won’t discourage readership, I can’t possibly examine all of the assertions put forward by CCIA, so let me just address some of the most outrageous or unintentionally hypocritical proposals. CCIA writes: “Consistent with USMCA, USTR should also continue to promote copyright provisions aligned with U.S. law.” Okay, that makes sense. But wait…they actually don’t mean that. They don’t support exporting all of US law — only the flexibilities afforded by certain provisions, like fair use, and they wholly ignore — or contradict, the inclusion of US standards that impose discipline and actually protect the cultural and educational materials that give life meaning and purpose (in addition to their contribution to US economic competitiveness). Does CCIA believe that the US should actively seek to gain acceptance of US principles of secondary liability — of liability based on inducement of infringement as articulated by the US Supreme Court in Grokster? Inclusion of a principle that failure to employ available tools to prevent infringement may be introduced as evidence of an intent to facilitate infringement (as articulated by the Supreme Court in Grokster)? Does CCIA support the US seeking to secure agreement on the rejection of the principle of exhaustion in connection with digital first sale as recently confirmed by the Second Circuit in ReDigi? Does CCIA think the US should seek harmonization of term of protection as found in US law — including 95 years from publication or 120 years of fixation for works where term isn’t measured by reference to the life of the author? And of course, CCIA must support the inclusion of mandatory statutory damages for copyright infringement — an essential component of the ability of civil litigation to create a level of deterrence. Does CCIA embrace the inclusion of provisions based on 18 USC 2319 which provides that a 5-year felony shall apply if the copyright infringement “consists of the reproduction or distribution, during any 180-day period, of at least 10 copies or phonorecords, of 1 or more copyrighted works, with a retail value of more than $2,500.” How about a provision including copyright infringement as a predicate offense for the application of racketeering laws as provided in the US in 18 USC 1961, thereby providing a powerful incentive against enterprises trafficking in infringing materials?
Okay, you get the point — CCIA does not mean what it says. They don’t believe that alignment with US law should be the lodestar for the US negotiating position — they endorse only the flexibilities that can undermine copyright protection unless balanced against modern and robust discipline informed by the realities of the digital marketplace. Having crafted this deceptive narrative that what they are seeking is consistency with US law, CCIA then highlights what they call “the need to remove barriers presented by recently enacted, or pending EU regulations on the digital economy. CCIA’s comments make the following recommendations for U.S. trade priorities with the EU: uphold long-standing copyright frameworks that provide protections for online intermediaries; protect copyright limitations and exceptions necessary for next-generation technologies; encourage investment by providing regulatory certainty to online intermediaries for third-party content…”
Let’s unpack this. I first want to address the idea of a “digital economy.” While I must admit that I too employ this term, CCIA’s use here of the word “economy” while opposing rules which would facilitate the operation of market conditions based on market principles of supply and demand on the basis of freely negotiated contracts, demands scrutiny. While the measures to which CCIA here refers may include elements other than the proposed Copyright Directive, CCIA clearly articulates that much of its concern relates to that particular Directive, and to Articles 11 and 13 in particular. But Articles 11 and 13 are designed to create markets where none presently exist, or are marred by unfair competition — to breathe life into property interests that are themselves protected under international law. So what CCIA actually opposes is the formation or preservation of markets in a way that corresponds to present opportunities and challenges. They argue “market economy” when they actually mean the maintenance of non-economies. They champion misappropriation and call it “long standing market principles.” It is also important to note how CCIA employs benign phrases like “regulatory certainty” to mask their parochial objectives. Making platforms liable for everything that takes place via their proprietary networks would yield “certainty.” CCIA doesn’t want “regulatory certainty,” they want certainty of the application of immunity. But that sounds less desirable, so they hide behind seemingly reasonable and neutral principles. This must be exposed.
CCIA spends a lot of time talking about the importance of safe harbors such as Section 512 of the DMCA. They are entitled to their opinions, and there is undoubtedly an unbridgeable gulf between their perception of the legacy of Section 512 and the views of the creative community. I have written frequently about the need to reform Section 512, and in particular, the importance of Congress maintaining its ability to modify it as we continue to learn about its strengths and weaknesses. See for example: NAFTA and Unsafe Harbors: Why Calls for Blanket Immunities Must be Rejected, The TPP and USMCA: The Good, the Bad & the Ugly (well, actually only the good & the ugly), & NAFTA: Preserving the Status Quo & Inviting a Future That We Are Incapable of Shaping.
But regardless of one’s views of existing safe harbors, one thing is clear — Congress and the Administration should refrain from locking in what is essentially the beta version of internet governance — rules adopted at the dawn of the commercial internet. But there is also another element of CCIA’s advocacy that deserves closer scrutiny. They write: “Intermediary liability protections for Internet service providers, such as the copyright safe harbors found in Section 512 of the Digital Millennium Copyright Act, have been critical to growing the U.S. digital economy by providing business certainty to U.S. investors and innovators.” I am sorry, but it is just far too convenient to posit something as true when there is no counterfactual, and where — to the extent that a counterfactual exists (i.e. experience in countries in which there is no analog to Section 512), there is little support. I’ll grant that without Section 512, internet platforms would likely have developed in a different manner. The possibility of liability for trafficking in infringing materials would likely have created incentives for different business models in which greater care was paid to preventing infringement. Would that have been better or worse than what we got? Regardless of where one would come out on that question, and putting aside my own views, it is inescapably hyperbolic to claim that Section 512 was an essential predicate for the growth of the digital “economy.” And we again come back to misleading references to “certainty” which is not the goal. There are countless ways that we could achieve certainty and predictability — many of which would be violently opposed by CCIA.
In what may be the most astonishing part of a remarkable submission, CCIA argues that: “Like U.S. law, EU law presently contains an explicit provision stating that online services have no obligation to surveil users, or monitor or filter online content. Online services have invested heavily in developing international markets, including Europe, in reliance on these provisions. Under Article 13 of the proposal, the Directive now implies that online services must procure or develop and implement content recognition technology… By effectively revoking long-established protections upon which U.S. services relied when entering European markets, the new Directive would limit U.S. companies’ investments for the benefit of EU rightsholders, establishing a market access barrier for many U.S. services and startups.”
There you have it — CCIA and its members believe that the EU is effectively foreclosed from legislating responsibilities of internet platforms because they made investments in “reliance” on existing norms of internet governance. Just let that sink in. It is in fact consistent with their more general, if unstated, view that global communications companies operate in a sovereign space untouched, and untouchable, by mere Nation-states. I also note, somewhat amusingly, that CCIA openly acknowledges that Article 13 will “benefit rightholders.” I think they forgot that their messaging in the EU is that Article 13 will hurt creators. I hope that the EU Commission, Parliament and Council will pay close attention to this. According to CCIA, you must not take action that would help your rightholders.
Finally, I can’t end without noting a deception of gargantuan proportion. CCIA writes: “Congress intended that the U.S. trade agenda promote balanced copyright when it granted Trade Promotion Authority (TPA) in 2015. TPA provides that the principal negotiating objectives of the United States should include promoting intellectual property in a way that “facilitates legitimate digital trade.” Committee reports from both chambers of Congress contained identical language elaborating on this mandate, specifically recognizing that trade agreements should “foster an appropriate balance in copyright systems, inter alia by means of limitations and exceptions consistent with the internationally recognized 3-step test.” CCIA clearly was hoping that no one involved in the 2015 TPA would be paying attention. CCIA and its allies lobbied Congress to include “fair use” and “balance” into the negotiating objectives. Congress rejected CCIA’s proposals, not because they didn’t believe in balance, but because they understood that CCIA’s proposal was aimed at undermining copyright protection rather than achieving balance or fairness. For CCIA to cite the 2015 TPA as if it were some validation of its views is truly extraordinary. While there is much left in CCIA’s submission, I have to close somewhere, and I can’t think of a better way than including a negotiating instruction that was actually articulated by Congress in the 2015 TPA: “ensuring that standards of protection and enforcement keep pace technological developments, and in particular ensuring that rightholders have the legal and technological means to control the use of their works through the Internet and other global communication media, and to prevent the unauthorized use of their works.” Here’s to that!
