Six Strikes and You’re Out at the Antitrust Ball Game?

In “today’s” Ars Technica, Tim Lee asks whether the new “six strikes” copyright enforcement system at ISPs might violate the antitrust laws. He credits me with suggesting the story, but that may be too kind in a case of convergent evolution. Fordham’s Mark Patterson had a similar idea, and the two of them bat it around in the article, with Patterson exploring the provocative similarities between the six-strikes scheme and the Fashion Originators’ Guild of America, which the Supreme Court struck down in 1941.

Patterson focuses on the idea of collusion among copyright owners to chase alleged infringers. The MPAA’s Dan Robbins responds by arguing that the courts have blessed programs by which copyright owners “engage in cooperative efforts to enforce their copyrights against a common infringer.” To the extent that users really are infringing, I think this response is persuasive. The MPAA and RIAA have coordinated litigation campaigns against infringers, campaigns that would have been less economical and perhaps impossible without that coordinating role. Now, this may make them deeply unpopular, but these are rights granted by copyright law and it would be odd if antitrust law were to turn around and make those rights useless in practice.

Instead, the rubber hits the road when it comes to cases where the infringement is only accused, rather than actual. Patterson describes the plan as “disrupt[ing] the balance that copyright law has struck.” The Memorandum of Understanding departs from copyright law on the books in multiple ways. The burden of proof, for example, is on the accused to show that her use is not infringing. She must pay to initiate a review. And perhaps most importantly, the list of grounds for challenging a notice is missing all sorts of defenses that would be valid in court, such as:

  • The work is not copyrightable (e.g. it consists entirely of facts arranged in an unoriginal way).
  • The sender of the notice is not the owner of the copyright.
  • The copyright has entered the public domain via failure to affix proper notice or file renewal paperwork under the 1909 Copyright Act.
  • The copyright is unenforceable due to copyright misuse.

In this respect, the parallel between the Fashion Guild and six strikes may have more to it. Both involved private arrangements among competitors in a field to collectively grant themselves rights in excess of what copyright law provides. For the Fashion Guild, those rights were copyright-like rights at all, since fashions were not then and are not now copyrightable. For six strikes, those rights are a system that shifts the burden of proof to users and denies them many of the privileges to use that they would enjoy under copyright.

I was also struck by some of the provisions the Memorandum that seemed more like restrictions on other copyright owners. So, for example 5.C provides “The MPAA Group and the RIAA Group will allocate the number of ISP Notices that each shall be entitled to send to each Participating ISP per month … .” I read that and thought, “Oh, really?” So the ISPs will set up this new enforcement system, but there’s going to be an explicit quota on how much any copyright owner can use it, and that quota will be set and enforced by industry-wide groups? This isn’t quite a restriction on output per se, and it is linked to a new “product,” but still, can’t you see how those quotas could be used by the major labels to reduce competition by starving the indies for ISP notices?

Finally, Patterson suggests that the arrangement could result in an “injury” of “the inability to choose among ISPs.” In one sense, yes, because the major ISPs all jumped into this agreement at once (indeed, all in the same document), this is potentially a horizontal agreement to fix product features and prevent competition among ISPs on their copyright policies. But also, I think the fact that the ISPs all were comfortable signing this itself a symptom of how concentrated the market for residential Internet service has become. The ISPs are saying that they’re not afraid of users leaving them for competitors with different copyright policies. They didn’t say so in so many words, but this strikes me as a pretty damning indicator of just how powerful a position they already occupy. We may be witnessing not the acquisition of market power, but the wielding of it.