Intellectual Property Rights Kill Competition

Copyright holders increasingly argue that more draconian copyright law and policy are needed. In fact, copyright gives the most powerful companies even greater control over creators and competitors. Current copyright policy concentrates power in a handful of corporate controllers – at the expense of everyone else.

We need a system that supports grassroots innovation and emerging creators by lowering barriers to entry – ultimately offering us all a wider variety of choices.

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Pro-monopoly copyright regulation provides no meaningful financial support for vulnerable artists and creators. Because of the imbalance in bargaining power between creators and controllers, trying to help creators by giving them new rights under copyright law is like trying to help a bullied child by giving them more money for their lunch so the bully can eat it.

The historical practices of entertainment companies bear out this concern. For example, in the late 2000s to mid-2010s, music publishers and record labels entered into multi-million dollar direct licensing deals with music streaming companies and video-sharing platforms. Google reportedly paid more than $400 million to a single music label, and Spotify gave the major labels a combined 18% stake in its assets, which are now worth $100 billion. However, music labels and publishers often do not share these payments with artists, and artists rarely benefit from these equity deals.

There is no reason to believe that these same companies will treat artists differently now.

In the age of Artificial Intelligence, copyright may seem like a good way to prevent exploitation by large tech companies at the expense of individual creators.

It's not true. In fact, the opposite is true.

Building a large language model requires developers to train the model on millions of projects. Requiring developers to license enough AI training data to build a large language model would limit competition to all but the largest companies—those that either have their own trove of training data or can afford to strike a deal with a company that does. This would result in all the usual ills of limited competition, such as higher costs, worse service, and increased security risks.

Traditional “gatekeepers” have already used copyright to stifle access to information and the creation of new tools for understanding it.

Consider, for example, Thomson Reuters v. Ross Intelligence, the first of many copyright lawsuits over the use of artificial intelligence (AI) to train projects. ROSS Intelligence was a start-up legal research company that created an AI-powered tool to compete with ubiquitous legal research platforms like Thomson Reuters’ Lexis and Westlaw.

ROSS trained its tool using “West headnotes” that Thomson Reuters adds to the legal decisions it publishes. The tool then read the individual legal conclusions that identified the headnotes. The tool didn’t extract any of the headnotes, but Thomson Reuters sued ROSS anyway. A federal appeals court is still reviewing the core copyright issues in the case—which the EFF intervened in last year. The EFF hopes the appeals court will reject this overly broad interpretation of copyright law. But in the meantime, the case has already forced the startup out of business, eliminating a potential competitor that could have helped increase access to the law.

The licensing requirement for AI educational materials also benefits technology monopolists. For giant tech companies that can afford to pay, expensive licensing deals offer a way to lock in their dominant positions in the productive AI market by creating prohibitive barriers to entry. The cost of licensing enough projects to train an LLM would be prohibitively expensive for most would-be competitors.

The DMCA's "Anti-Circumvention" Provision

The “anti-circumvention” provision of the Digital Millennium Copyright Act is another prime example. Congress ostensibly passed the DMCA to discourage would-be infringers from circumventing Digital Rights Management (DRM) and other access controls and copying restrictions on creative works.

In practice, it has done little to deter infringement—after all, large-scale infringement attracts huge legal penalties. Instead, Section 1201 has been used to stifle competition and innovation in everything from printer ink to video game console accessories to computer maintenance services. It has been used to threaten hobbyists who wanted to make their devices and games work better. And the problem is getting worse as software appears in more and more places, from phones to cars to refrigerators to farm equipment.

If that software is locked behind DRM, interoperability with it, so you can get additional services, may require a workaround. As a result, manufacturers gain complete control over their products long after they're sold, and can even close off secondary markets (as Lexmark did with printer ink, and Microsoft tried to do with Xbox memory cards.

Giving rights holders more rights hurts consumers. Instead, we need a balanced copyright policy that rewards consumers without hindering competition.

Republished from the EFF's Deeplinks blog.

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