Remember that time when the Swedish government funded Darknet? Yeah, with the US Navy.

Darknet, the part of internet which is more lawless than the rest. Where you can get your contract killers, drugs, untraceable credit cards, human organs, guns… you name it. Sounds like a good party. Like something that would be found on an outpost asteroid in a sci-fi movie. Also sounds like the opposite of government business.

Here is a fun art project: Random Darknet Shopper. They gave a bot bitcoins and sent it shopping on Darknet. It bought stuff like passports, ecstasy, viagra-clones, knock-off designer wear and a baseball cap with a spy camera. That’s the stuff you can get on Darknet. Fitting name!

Law enforcement is understandably frustrated. Darknet runs on a virtually untraceable technology called TOR. That is short for The Onion Router, it works by relaying traffic through a number of different nodes, just like the layers of an onion. If you manage to trace one IP-number, you will find it is only a proxy for the next, and so on. In theory, law enforcement or somebody could work its way through all the relays, but in reality it’s too hard.

“So what?” you may think. “This is just typical of the internet, some hackers in love with the anarchist mythology.” Sure, but it started as research by the US military, more precisely an arm called the Naval Research Lab. And the Swedish government co-funded TOR through its international aid agency(!) SIDA, with the purpose of supporting freedom activists in authoritarian countries. Sounds nice. Not sure what they say about the blank credit cards and stolen cars, though.

Can I be a fly on the wall at the Xmas party where the prosecutors and the international aid people get together, please?

With this, Netopia says Merry Xmas. You know where to shop for gifts, courtesy of the Swedish tax payers.

In its attempt to make a digital single market for copyright content, the European institutions sacrificed the last word. Digital single, yes, but far from market economy.

A market is of course always regulated to some degree, but normally consists of independent actors making voluntary deals. Market economy has many fans across political ideologies. The single market is often considered the EU:s greatest achievement. The problem with the online market for is digital content it is so hard to control and thus so easy to monetize without permission. There are many well-known examples, in the early days file-sharing pirates claiming information-wants-to-be-free and more recently big tech companies ignoring (and pushing against) copyright rules. Intellectual property rights were always crucial to connect creative efforts with the economy (even the old Greeks: restaurants could have exclusive dishes for example). Digital communication accelerated the process, making infringement easier and protection harder.

European policy-makers therefore had many good reasons to look at copyright as part of the Digital Single Market-vision: European creative sector employs a lot of people, cultural diversity is a strong value in Europe, the economy moves from physical to immaterial investment, global competition and of course also out of principle. Enter the Copyright Directive, which was agreed by the trilogue yesterday after much friction. Except where it could have introduced free market mechanisms, the compromise rather looks to government, courts and societies to decide what is fair. Rather than demanding internet services make deals with the owners of the content on their networks, a forced licensing system is introduced. Instead of protecting creators, business partners and investors from unfair competition, a new loophole is gifted to internet platforms (“best effort”) – a sort of super safe harbor for large user-uploaded content platforms, allowing them to escape the responsibilities that current law places on all others. Mandatory clauses are introduced that can change the agreements made by creators and investors after the fact. What was meant to help European consumers and creative industries, more likely cements the big internet platforms status as market-owners.

No competition, no freedom of contract, no protection against unfair use. Anyone who thinks that sounds like a market, please stand up.

Listening to the debate around copyright in the EU, one can get the impression that all content is the same. Some things must be simplified of course, but scratch the surface and the differences are obvious. Digitalisation is not some sort wave that sweeps in over land, making everything equally wet (though some talk about it like a force of nature). Better to think of digital possibilities, different depending on where you stand and with no inherent direction.

Take music. Songs are well-defined, three minutes or so of audio. Easily packaged and compressed, simple to distribute in digital networks. Easily recognized, even when abused into becoming ringtones. The product of human creative effort, somebody putting their heart and soul into it, many hours in the studio, lots of work on photos, sleeves, costumes etc, but still inexpensive to produce compared to video games or feature films. The listening takes many forms – from complete focus when reading the lyrics along to a new song from one’s favourite artist, to something playing in the background as you work or do the dishes. The overwhelming experience of being in a crowd at a concert. Or ignoring elevator music. Music are all those things. The music business is a sophisticated structure of artists, producers, song-writers, labels, publishers, booking agents, promoters, managers, lawyers, collecting societies, streaming services and many more, each with the task to do in the giant music anthill. Music can be immediate, or it can grow on you. We listen to our favourite songs over and over again. Play them to our friends. We can meet other cultures through music, enjoying the voice without understanding the words. All this is obvious, but at the same time easy to disregard.

Compare this with film. I mean feature films that play in cinemas or on your phone/laptop/tv-screen, not counting internet videos, television, shorts, documentaries and the countless other forms of moving images. Feature films involve even more specialists than music and the production is much more complex and costly. Think about the credits of any movie, long lists of names rolling for five or ten minutes after the end. Travel to locations in far away places to shoot in the right setting. Editing for months. Visual effects and animations. You get the idea, production budgets are high in most cases. There are no concerts for film. Yes, there are festivals and you can share the experience with others in a crowded movie theater. But there is no live performance. The artist is not as prominent, instead the actors and director share the spotlight. Film can be a powerful way to meet a different culture, but translation is needed. Film is an illusion, a spectacle, a contract between the viewer and the film-maker to suspend disbelief and accept that ET wants to phone home. Our favourite movies stay with us, but we rarely watch them over and over again – at least not hundreds of times.

Both music and film touch us and speak to us as humans (except sometimes they’re crap). But they do so in very different ways. The may have similar legal rules providing the framework for authorship, investment and licenses, but that’s only the foundation. The structure on top is complex and always evolving. Anyone who makes rules or technology for music or film must keep this in mind!

Yes, these points are obvious, but there is anyway a lot of confusion around this, intentional or not. Also, this helps explain why music and film come to different positions on policy sometimes, for example in the current debate around the EU copyright directive. (Parts of) the music industry prefer Youtube to pay license fees for the music on its network. It has the structures – collective rights management – to deal with that. Film on the other hand, is not blanket-licensed like music (where all radio-stations can play all songs) but instead licensed to particular licensees with individual terms. It wants Youtube to enforce its rules and make sure films do not appear on its network without permission. Hope that helps to make sense of it!

And this was only music and film. Next, look at books, newspapers, sports, television or video games…

Story-Telling and Dot-Com-Bubble Memories

The much-debated EU copyright reform aims, among other things, to address the “value gap” – the fact that the same service and the same content and the same audience gives very different revenue for creators and rights-holders whether it’s a licensed service such as Spotify or Apple Music or alleged user platform Youtube. This is possible because of different legal definitions (more on that here). This situation begs a different question: was Youtube set up like this intentionally?

1,9 Billion logged-in users per month and more than one Billion hours of video viewed every day, according to Youtube itself. Who knows how much of this material was uploaded with the owner’s blessing?

The official story-telling of Youtube’s genesis will have you believe it was inspired by the unavailability of videos of Janet Jackson’s “nip-slip” at the 2004 Superbowl. This showed the need for a user-generated online video repository. Maybe that is exactly how it happened, but founders Chad Hurley, Steve Chen and Jawed Karim were not the first to get this idea. I had the doubtful pleasure of being close to the core of the late-90s pre-dotcom bubble internet entrepreneur-scene in Stockholm, Sweden – one of the busiest hubs of what today is know as the tech startup world. In that environment, I came in touch with at least five different online video sharing business plans – all different variations on the Youtube-theme of five-six years later. Why did none of those beat Youtube to the game? Because they never started. They all sought legal advice and all lawyers told them it would never fly for copyright reasons. Maybe Hurley-Chen-Karim did not seek such advice. Or maybe they did and proceeded anyway. In any case, it should come as no surprise that Youtube soon became a popular distribution channel for unlicensed content.

Lawsuit predictably followed. In 2008, broadcaster Viacom together with Paramount Pictures and some other television players sued Youtube for copyright infringement. After five years of court hearings and appeals, the parties settled. However, some of the statements from Youtube employees give some hints to the question raised in this blogpost:

/…/statements made by YouTube employees that “[we should grow] as aggressively as we can through whatever tactics, however evil.… [the site is] out of control with copyrighted material … [if we remove] the obviously copyright infringing stuff … site traffic [would] drop to maybe 20% … steal it!”^[24]

Since then, Youtube has introduced its Content-ID system which some hold up as an example of “best effort” by platform providers, while others think it’s rather a strategy of doing as little as possible as late as possible to protect the revenue stream from illegal content.

We will probably never know for whether Youtube is such a perfect copyright infringement machine by design or coincidence. However, one thing is certain: they couldn’t have done a better job if they tried.

It started so optimistically. What if the European legislators could fix some of the problems of the online world? Copyright was first in line when tech and telecom companies began to disrupt value in different sectors. That list has grown very long over the years, but it makes sense to start with copyright if you want to fix the internet. There was no lack of issues: pirate services run by organized crime. Platforms harvesting data and revenue without taking any risk, refusing to put effective protection in place. Different terms for the same services. Erosion of value and income. Money moving from smaller businesses to tech monoliths. And not least creators’ rights abused left, right and center. The case for intervention was strong. Enter Article 13 of the Copyright Directive.

Looking back, maybe the threat was obvious – big tech hoodwinks and maneuver, soft power some call it. The process of negotiation in the EU institutions and at home in the member states. The pressure from technology and internet groups, selling the myth of the “free internet” (whatever that means). The astroturfing. What was meant to fix the problems, now rather looks to create new ones. Article 13, as it reads in the most recent leak, introduces new safe harbors for intermediaries, talks about “best efforts” and brings new exemptions. It does not help to fix the problems it set out to do, but creates new ones. An opportunity lost. In it’s hijacked current form, watered down form meaningful protection for creators, means almost no one loves Article 13 anymore. Tech and telecoms do everything in their power to stop it, obviously, not stopping short of blacking out Wikipedia in protest. (Yes, I know, Wikipedia is independent, at least in name.) Now, also the creative industries say it’s better to bury it than get 8-balled by shoddy outcomes.

When the negotiations started, there was no ruling from the EU’s Court of Justice on how copyright should be squared with the intermediary privilege in the E-commerce directive (protecting “information society services” from liability for what users do, read more here). But during the process, a case has reached the top court. Can justice succeed where policy failed? Let’s hope so, but whatever happens, policy-makers will have to do more work on making the internet work for everybody. Copyright was first, but only one aspect of a much bigger problem. The internet is too important to let Big Tech and utopians call the shots.

UPDATE: The trilogue negotiations on the copyright directive that were scheduled for today have been postponed https://www.euractiv.com/section/digital/news/copyright-directive-faces-further-setback-as-final-trilogue-cancelled/

If you think Big Tech is not acting responsibly, you have a point. All the digital headaches that have been debated recently: surveillance, terror propaganda, hate speech, election manipulation, cybercrime, phishing, fake meds, copyright theft, fake news… they have one thing in common: lack of responsibility on the part the intermediaries (=the tech companies). This is not a coincidence. This is by design, in fact by policy-makers. The tech companies are not acting responsibly because the law tells them they are explicitly not responsible for what their users do. It’s the secret sauce. It’s called safe harbor, intermediary privilege, liability immunity and other things like that. It was made in to law about 20 years ago, in the US it’s the DMCA (Digital Millennium Copyright Act) and Section 230 of the “Communications Decency Act”, in EU it’s the E-Commerce Directive’s Article 14. Other places have similar rules with different names. They say that internet services are not responsible. What could possibly go wrong?

When these laws were put in place around the Millennium, the main idea was to protect private communication, so that telecom providers would not have to monitor their users’ traffic. That makes some sense. What nobody could predict was that it would be used by media services with Billions of users to avoid paying for content. Or to operate a taxi fleet without having to follow regulation like meters, taxi licenses, educated drivers etc. Or build a platform that monetizes peoples holiday photos and private communication. The irony of ironies: what was meant to protect users now protects the services. What was meant to protect the integrity of private communication is now used to data-mine private communication for advert material. What was meant to safeguard the integrity of people talking to people, now protects machines talking to machines. What was designed for private communication is now used to for public communication. When pirates, tech groups and internet activists say “it will break the internet”, they talk about this immunity. If internet services were to take some responsibility, it’s more like that would save the internet.

It doesn’t have to be this way. If the rules were different, the outcome would change. Consider banks: nobody says banks are responsible if somebody launders money through them. But banks have a lot of rules that makes the do a lot of things to stop money-laundering. Not because they are the problem, but because they are the solution. Except, while banks were not designed as money-laundering machines, some online platforms are, at least in part, designed to monetise copyright infringement (as shown in the case of Viacom vs Youtube). European film producers business protest against how Youtube uses safe harbor.

This is what policy-makers are trying to fix now. This is why they propose regulation to take down terror content within one hour. This is why the EU copyright reform puts responsibility on platform providers to get licenses for content or have effective methods to remove infringing material. And so on. The trilogue on the copyright reform is going on right now. Some parts include providing NEW safe harbors for intermediaries. Yes, it’s true. While one part of the policy-making is trying to deal with the fallout of safe harbor, another is making new ones. What could possibly go wrong?

The Audiovisual and Sports sectors* caution against new safe harbors. This was optimistically interpreted by Pirate MEP Julia Reda as support for her position. Except she wants less responsibility, whereas the sectors want more.

EU policy-makers! Don’t give Big Tech another get-out-of-jail-free-card. We know how it ends.

*) Full disclosure: some of them are Netopia’s supporters

How should Big Tech deal with fake news, hacked elections, propaganda and hate speech? This is one of the biggest issues in tech policy for the moment. The general assumption is that a service created for, let’s say, checking out girls, can be abused to promote genocide. Or maybe you want to share party videos online and end up amplifying white supremacists. The issue then is what Big Tech should do about it, how to mitigate these unintended effects. Accidents brought about by maybe naïvety or rush to innovate. This is a debate of great importance, in fact one of the biggest challenges for the democratic system. But behind that hides a deeper problem: what about when Big Tech intentionally uses it platforms to push its own agenda? Fake news by design…

Case in point: EU copyright reform. Wikipedia blacked out in Poland and Italy in protest. Silicon Valley carried out the greatest astroturfing campaign known to man. And now this: Youtube mobilises its viewers against the proposal. Keep in mind: this is not about climate change, world hunger, the rise of authoritarianism or the refugee crisis. It’s about a change in copyright law. Yes, the world has lost its sense of proportion.

The playbook is familiar. Big Tech used it to stop ACTA in the EU. SOPA/PIPA in the US. It almost succeeded with the copyright vote in European Parliament this summer. Use the services to mobilise the users, provide them with easy tools to reach out to policy-makers. Not all of it is astro-turfing, many of the e-mails and calls are from real people. Except most of them only hear one side of the argument. The other side does not control niche monopolies allowing them to send their message unfiltered to Billions of users. And those media organisations who come anywhere close would not use their channel to promote their own agenda because of press ethics (or rather; thanks to press ethics). If you are not afraid of information monopolies yet, think about what the public sphere will be like if Big Tech continues to starve out competing media and further increases its dominance over our attention. If this is what it looks like for copyright, imagine what it would be if some policy-maker dared do something that could really change things. Such as anti-trust, privacy or data ownership. Who said something about joining the resistance?

Does Youtube have a point? Not really, the concerns about memes, parody, mash-ups etc have been addressed in the political negotiations. The Youtube “creators” need not worry, they own the content they create and are free to do what they like with it. There is no need for Youtube to take down all user generated content, it only needs to get licenses or use better methods to stop users from spreading other people’s content (oh, they can if they want to, easily – ever ask yourself why there is no porn on Youtube?). Make no mistake, this is not about memes or streamers: this is about commercial-scale distribution of music and movies without the consent of those who made it.

Youtube claims to support the goals of Article 13. But does it really? The policy aims to close the “value gap” which means licensed music services – like Spotify – pay maybe ten times more than Youtube for the same content delivered to the same audience. The difference is with Youtube it’s uploaded by the users rather than the service itself. Does Youtube really support that goal? Does it really want to pay fair compensation for the content it monetizes? You tell me.

Youtube proudly claims to have paid 5 Billion Euro to the music industry “over the years” (Youtube started in 2005). Except that’s only about one third of the turn-over in a single year for recorded music. Youtube is the second most popular website in the world (Google.com is #1). 5 Billion in 13 years? Peanuts.

The Copyright reform won’t hurt the internet. It might however hurt Youtube’s business. Maybe Youtube’s business model cannot support paying fair dues for content. Tough luck. Time to change the business model. There is no shame in that. Startups do it all the time. It’s called a pivot.