Not in Oregon. In that state, the printed how-to manual for accessing public records is available for $25, a fee they claim helps them cover the printing costs.

Apparently it’s still 1992 in Oregon, and widespread public adoption of the Internet hasn’t yet taken place. In all seriousness, though, it appears state officials could use a reminder that the marginal cost (MC) of distributing a document to over the internet is  $0.

Recently a University of Oregon economics professor has come under fire for trying to improve access to state law. Bill Harbaugh scanned the entire 326-page book and made it available for free on his website. The Oregon Department of Justice has threatened to take legal action on copyright infringement grounds if Professor Harbaugh doesn’t remove the manual from his website.

Professor Harbaugh accuses the state of using copyright to restrict the public’s access to government documents, saying that “trying to use copyright law to keep the public from getting information about how to get public records strikes me as wrong.” Making it difficult for citizens to access and understand the law is pretty shady, no doubt. Producing a helpful manual explaining the law and then using copyright to keep it from being distributed it is just asinine.

I think Intel has a strong case. But some commentators have greeted Intel’s argument with scorn. They say it can’t rely on human rights because it is a corporation and not a human being. They also say that the fine can’t be challenged because it is civil, not criminal — even though the Convention protects due process in both civil and criminal proceedings, and treats massive penalties like the one imposed on Intel as criminal, not civil, because of their punitive nature.

In May, the European Commission fined Intel a record-setting $1.45 billion dollars for violating EU antitrust law for allegedly using rebates to potentially penalize clients who purchased too many computer chips from a smaller rival. “Intel is the world’s biggest computer chip maker and controls roughly 80% of the computer chip market.”

Recently, however, the Commission’s proceedings against Intel were criticized for unfairness by the EU’s own ombudsman: “The European Union’s ombudsman has issued a rare rebuke of the bloc’s antitrust regulator, saying it failed to record ‘potentially exculpatory’ evidence from a witness in its investigation of chip giant Intel Corp.”

Despite this unfairness, Intel has been criticized for even raising a due process claim, under the theory that companies don’t have “human rights.” A writer in Forbes Magazine claimed that “the chip giant is grasping for straws with its ‘human rights’ appeal against Europe’s $1.5B fine,” since the “idea of a company appealing to recognize its ‘human rights’ sounds a little odd.” Intel’s argument drew a hail of scorn among commenters in response to a blog post at Ars Technica, including the following reactions: “Please destroy corporations who claim their human rights were violated,” “I had never laughed that hard . . . .before,” and “Any corporation that claims personhood for the purpose of asserting human rights opens a very scary Pandora’s Box.”

But the text of the European Convention on Human Rights is clear that it does not apply just to humans, stating in Article 34 that “any person, non-governmental organisation or group of individuals claiming to be the victim of a violation” may seek redress. For that reason, court rulings have routinely applied the due-process protections of Article 6 of the Convention to corporations. See Michael Addo, Human Rights Standards and the Responsibility of Transnational Corporations (1999) at pp. 194-95 (discussing four such cases, including (1) Dombo Beheer v. Netherlands (1993), (2) Editions Periscope v. France (1992), (3) Union Alimentaria Sanders SA v. Spain (1989), and (4) Societe Stenuit v. France (1992)).

It is odd to see the media disparage the idea of a company having rights, given the fact that media companies constantly invoke the First Amendment and other constitutional rights, like the right to a public trial. The most important First Amendment cases in the past half century have been brought by media companies, such as New York Times v. Sullivan (1964), which overturned a damage award against a media company for libel (and in the process radically cut back the reach of American defamation law), and New York Times Co. v. United States (1971), which ruled in favor of two media companies seeking to publish the Pentagon Papers. Most constitutional rights have been held to apply to corporations (and corporations in general, not just media corporations).

Denying a corporation like Intel the ability to raise human-rights challenges would harm human beings: its shareholders, whose quarterly earnings were wiped out by the massive fine imposed on it by the European Commission, leaving them with a $398 million loss. Allowing due process violations to go unremedied is particularly dangerous in antitrust cases, since antitrust law is often vague and unpredictable and subject to differing interpretations.

And as lawyer Kimberly Curtis notes, Intel is not alone in protesting the EU’s handling of antitrust cases. “Intel and a growing number of other companies argue that the EU method of investigating antitrust violations is contrary to European human rights law since it is a political appointee who oversees the investigation and decides guilt,” in an administrative proceeding in which an appointee acts as prosecutor, judge, and jury. This “calls into question the EU’s practice of having a political appointee — the current antitrust commissioner is Neelie Kroes of the Netherlands — who supervises investigations, and then decides whether the company is guilty and what the punishment should be.”

Moreover, the exclusion of exculpatory evidence in the Intel case was strikingly similar to a human-rights violation found in a landmark case decided by the European Court of Human Rights, in Dombo Beheer B.V. v. Netherlands (1993) 18 EHRR 213. In that case, the court found that the legal system of the Netherlands had violated the due-process rights of a corporation under Article 6 of the European Convention on Human Rights through a one-sided proceeding that excluded one side’s evidence, while permitting the other’s. It also made clear that the right to a fair trial applies not just in criminal cases, but also in civil litigation: “The Court agrees” that in “litigation involving opposing private interests . . . each party must be afforded a reasonable opportunity to present his case - including his evidence - under conditions that do not place him at a substantial disadvantage vis-a-vis his opponent.”

Huge administrative fines such as Intel’s are subject to particularly exacting scrutiny under the Convention both because of their size and punitiveness, which makes them “criminal” in nature, and the fact that they were imposed in an administrative proceeding that combined “investigative and judicial functions.” That’s the lesson from the European Court of Human Rights’ June 11 decision in Dubus S.A. v. France, which found a violation of a corporation’s rights despite a much smaller penalty and seemingly less egregious facts, where an administrative agency had the power to award potentially large sanctions using procedures similar to what the European Commission uses in antitrust cases.

The court found that the “potentially” “high amounts” of the penalties the agency could impose made its proceedings criminal in nature, and that its “combination of investigative and judicial functions” — a feature shared with European Commission antitrust proceedings — subjected its proceedings to heightened human-rights scrutiny. The court ruled that the French Banking Commission violated an investment company’s rights under Article 6 of the human-rights convention by subjecting it to disciplinary proceedings that lacked “independence and impartiality”:

“The Court of Human Rights found that there was no clear distinction between the functions of prosecution, investigation and adjudication in the exercise of the judicial power vested in the French Banking Commission. While the combination of investigative and judicial functions was not, in itself, incompatible with the need for impartiality, this was subject to their being no ‘prejudgment’ on the part of the Banking Commission. The Court stated that there was a need for strict controls, to avoid giving the impression that guilt had been established from the very start of the disciplinary proceedings. The Court of Human Rights also found that Dubus could reasonably believe that it was prosecuted and tried by the same people, and consequently could entertain doubts about the impartiality of the decision of the Banking Commission, which, in its various capacities, had brought disciplinary proceedings against it, notified it of the offences and imposed the penalty. Interestingly, the Court of Human Rights also held . . . that the penalties in the form of fines were penal in character given the high amounts that could, potentially, be imposed.”

As the EU Law Blog notes, this ruling is “significant” for antitrust cases like Intel’s “because the procedure used by the European Commission in antitrust cases is rather similar (but not identical) to the one applied by the French Banking Commission.

Similarly, Kimberly Curtis notes, “the massive size of recent fines” in EU antitrust cases

“suggests that the fines are ‘deterrent and punitive’ and therefore implies that they are criminal in nature. Cases from the European Court of Human Rights in Strasbourg detail what constitutes a criminal case, and one factor is the severity of the punishment. . . billion dollar fines are quite severe. But criminal cases are overseen by an impartial tribunal and defendants are allowed to present a defense, two things guaranteed under European human rights law through the European Convention on Human Rights and two things that the current EU antitrust system lacks.”

It may well be that European courts will be reluctant to overturn what the European Commission has done to Intel, given that a ruling in its favor might call into question the Commission’s handling of other high-profile antitrust cases that have likewise led to large fines. Forbes reports that “in an interim hearing on this case, the president of the Court of First Instance” refused to grant Intel the relief it sought.

But since that hearing, the EU Ombudsman has rebuked the Commission for its unfair treatment of Intel. Indeed, Intel seems to have been treated worse than other litigants whose rights under the Convention were found to have been violated. In light of the strong evidence that Intel’s rights were violated, the European courts may have no principled alternative other than to rule in favor of Intel.

The notion that exclusivity necessarily precludes competition is simply absurd. Apple’s deal with AT&T is precisely the opposite of monopoly. Far from cornering the market on smartphones, Apple has openly refused to sell the iPhone to most of its potential customers. If anything, nonexclusive sales would have discouraged competing handsets, undercutting the incentive for Verizon and Sprint to pay for their exclusive rights to the Blackberry Storm and the Palm Pre. Mr. Feld bemoans that these top-tier phones aren’t competing within any single provider, but this is just like stating that Coke and Pepsi don’t compete because they are sold in separate vending machines.

On the second point, though–that exclusive deals raise prices–Mr. Feld and other pro-regulation advocates have a point. AT&T pays Apple a hefty sum not to make the iPhone available to customers of other providers. That means the phones cost AT&T more than they would’ve otherwise, and customers in turn pay more for them. High prices are a signal to new entrants, of course, but Mr. Feld would certainly push the point. Could Congress really lower prices for consumers, without price controls or their attendant shortages, in one stroke of the regulatory pen?

Well, yes and no. It is likely that the price of the iPhone would fall if government forced Apple to abandon its agreement with AT&T. Prices would fall further still if regulators subpoenaed Apple’s schematics and source code and revoked its patent claims. But while critics attack exclusivity in the margins of Apple’s profits, no one questions the the very core of those profits: the intellectual property and corporate secrets that make the the iPhone so valuable. Why such different reactions to essentially the same business practice? Because novelty is scary. Apple’s sole production rights to the iPhone are nothing special, but its deal with AT&T is somewhat new.

We’re not used to seeing exclusive monopolies in established products, and for good reason. A monopoly is extremely difficult to maintain, and usually only possible with the help of government. It would certainly be unusual if steel, bananas, or personal computers were controlled by a single manufacturer, and it was terrible for consumers when Ma Bell—with great help from the FCC—owned the entire American telephone industry. On the other hand, there’s nothing unusual at all about Scholastic’s sole publishing rights to Harry Potter, or Amazon’s exclusive ownership of the Kindle. Why are we so accustomed to monopolies in some sectors, but wary of them in others?

The answer is that exclusivity can be perfectly natural, and sometimes even essential, for new and innovative products. Every invention starts out exclusive to its creator. Only by leveraging that exclusivity can the creator make a profit. Once a product is well-established, only an act of government can restrict its supply. It took several acts for the FCC to entrench the Bell monopoly, and it would take another to stop Apple’s competitors from building a better smartphone. Good things come to those who wait.

Ultimately, what Mr. Feld is advocating is a textbook case of the broken window fallacy. Whenever a new product is invented, society can always gain by revoking the creators exclusive rights, if we look only at that product in isolation. But it’s like cheating at poker: eventually your friends learn not to play. Prohibitions on exclusivity create shortages just like any other price control, even if these innovation shortages don’t make the evening news. Prominent benefits and hidden losses are a magnet for bad policy, and they can fool even economically literate folks like Mr. Feld who should know better.

Apple's 1984 "Big Brother" ad

An article over at Ad Age brings up an angle on the whole auto industry bailout probably not considered much before.  The fact that a yet-to-be-appointed “car czar” will have control over a multibillion dollar advertising budget for the big three.  Under the guise of “oversight,” this would effectively “Create World’s Most Powerful Marketing Exec[utive].”  

The draft rescue plan for Detroit sent to the White House by Congress yesterday calls for the appointment of a “car czar” who will oversee the Big Three automakers’ expenses over $25 million — which, by extension, would include media buys. Based on Advertising Age’s estimates of spending by General Motors Corp., Chrysler and Ford Motor Co., that would give the as-yet-unnamed car czar control over some $7.3 billion in marketing spending in the U.S. alone.

The most disturbing thoughts about this (particularly to those concerned with liberty) are provoked here: 

The car czar would wield a budget more than double those of AT&T, Verizon, Unilever and Johnson & Johnson, which round out the nation’s top five marketing spenders, and give the car czar more clout with media and agencies than such famed names in marketing as Walmart Chief Marketing Officer Stephen Quinn and Anheuser-Busch VP-Marketing Dave Peacock.

…If the bailout goes through, agencies that work for the Big Three will essentially be toiling on a government account, with all the associated red tape and strictures that involves.

So there you have it.  We should all be concerned about this for many reasons.  As mentioned, the large ad budget that comes with a czar-controlled U.S. auto industry will allow a government bureaucrat to wield unbalanced and unchecked influence over not only who gets ad contracts, but what media outlets get ad money. The czar can simply refuse to give business to an advertising agency who works for a foreign competitor of the big three (or a “non-compliant” corporation), or refuse to pay money to show ads on outlets that they deem “unfriendly” to the administration or its mission.   This will be an unequivocal disaster.  We have already seen the lengths to which administrations (and pre-administrations) have gone to influence and/or silence media they do not like.  What kind of power plays do you think are possible when the administration’s appointee controls a major source of media outlets’ ad revenue? Whatever it ends up being, it won’t be pretty.

Their claim that consumers won’t buy from an automaker in bankruptcy is a specious argument. Yes, some won’t, but many consumers also are not going to buy cars from companies perceived to be so weak that they have to beg for a bailout from the government. A company’s clutching to a government lifeline to keep from going bankrupt wouldn’t be that much different for many car buyers than an actual bankruptcy.

This is particularly true if the government forces the companies, as a condition of the bailout, to make “environmentally correct” cars that no one really wants. A company emerging from a Chapter 11 bankruptcy, by contrast, has a chance to win consumers back by making products that they want.

I also addressed your argument that “If the manufacturer no longer exists, then the car parts might not” in a previous Open Market entry (that was cited in a brilliant Washington Times editorial on Thursday). That entry noted the thriving reproduction parts industries for DeLoreans and Studebakers, both made by automakers long defunct (DeLorean went bankrupt in the ’80s and Studebaker folded up shop in the ’60s). The fact of these industries’ existence cuts in favor of consumers in a Big 3 bankruptcy. Given that there would be millions more Big 3 cars on the road than DeLoreans and Studebakers, entrepreneurial firms would rush to acquire the intellectual property rights that a bankruptcy court could easily award so that new parts could be made for consumers. Warranty claims could also be given priority by the bankruptcy court, as the Times editorial noted, and those are usually backed up by the insurance company of the warranty issuer, anyway.

It looks like to tide the companies over, Congress is going to vote this week to let them use money already appropriated for “green cars” for general operating purposes. From a free-market perspective, this action is neutral and may even be a net positive, as it reduces the promotion of a state-directed “green agenda.”

But when Congress comes back next year, bankruptcy must be on the table for both big automakers and big banks, as it is for small businesses every day. Otherwise, the economy may never get out of “Reverse.”

Horrific senarios are painted of consumers not being able to get parts for their automobiles if manufacturers are no longer in existence. But of all the many admittedly complicated aspects of a bankruptcy of General Motors (the company the Congressional hearings established was in the most trouble), these consumer issues provide the least reason for worry.

In a Chapter 11 bankruptcy, GM would most likely be reorganized into a new company, sans the current management and heavy costs. This is something that has proved impossible so far due to lax management, generous union contracts, and state dealer franchise laws that make car companies pay an arm and a leg to sever a relationship with a car dealer. A bankruptcy could finally force the tackling of these tough issues.

But even if no reorganized company emerges, the production of parts for consumers with existing GM models will almost certainly continue. All that would need to occur is the relatively simple process of the bankruptcy court transferring the GM’s intellectual property rights to a company that wants to manufacture its parts. To see how this would work, it is instructive to look at thriving reproduction parts industry for a car that hasn’t been made since the ’80s: the DeLorean.

The DeLorean Motor Company operated from the mid-’70s to the early ’80s. The company filed for bankruptcy protection in 1982 and the company went into liquidation instead of reorganization, and no new DeLoreans have been made since.

But there is still an active interest in the cars, and the sporty DeLorean DMC-12 was immortalized in the 1985 movie “Back to the Future” and its sequels. According to Wikipedia, “A very large number of the original cars are still on the road after over 25 years; most estimates put it at 6,500 cars surviving out of just over 9,000 built.”

So what happens when these cars need a new part, with the company that makes the cars no longer in business. Well, their drivers can get original and reproduction parts from the new DeLorean Motor Company. This is a new firm with entirely different owneship that acquired the trademark to the original company’s name as well as the rights to its designs.

According to the new DeLorean Motors’ web site, “when the supply of any part is exhausted or becomes no longer available, we endeavor to have the parts remanufactured using our set of the original engineering drawings.” They even sell “new build” DeLoreans using a combination of original and reproduction parts.

Going back even further, one can even buy new reproduction parts for a Studebaker, a car last made in the ’60s. An Indiana company called Studebaker International Inc. performs, according to its web site, “drilling, machining and assembly of parts” for nearly all models of Studebaker.

Of course a lot more people have GM cars than DeLoreans or Studebakers, but this fact cuts in favor of GM consumers. If there can be a thriving business in parts for cars that exist in this limited amount, entrepreneurs will rush to fill the needs of the owners of millions of GM cars on the road.

Resolving warranties is slightly more complicated, but a bankruptcy court would likely award warranty service contracts priority among the debts to be paid. And most warranties are backed by insurance companies, anyway, in the case of a firm’s bankruptcy. More on this in another post.

On the high-technology front, president-elect Obama has indicated he’d appoint a Chief Technology Officer. The role seems federal-government-focused: The tech “czar” would manage government technology policy with respect to matters like cybersecurity, privacy and Internet policies–basically securing governement networks and keeping government agencies on the cutting edge of communications technology.

The role as described seems limited to “bringing government into the 21st century.” But would the role remain circumscribed? “Czars,” like commissions of various sorts, are tempting for politicians, and can end up as barriers and stumbling blocks to non-political solutions to normal problems and challenges. A drug czar wages a hugely expensive war on drugs; An education czar ends up supporting funding of education programs from Washington, D.C.

Industries–and mere concepts like “technology”–do not need czars in Washington. Such enterprise needs to operate apart from this city. Indeed, even supposedly “deregulatory” Republicans were not reluctant to regulate the Internet. Bush favored federal privacy regulation, but never pushed it. His adminstration was also happy to target porn and “spam.” Legislation favored by the Republicans ran the gamut from gambling to cable regulation to media ownership. Right now, many firms in Washington are poised to push for federal privacy legislation to, as they say, pre-empt the states and get rid of the “patchwork” of privacy legislation with which they must deal. But the risk is merely trading 50 regulators for 51.

Given the constant pressures for meddling in technology by both parties, a “czar” can easily becomes a central figure in the drive to regulate someone, somewhere, rather than simply tend to government modernization knitting.

A government tech czar would likely grow in stature and as a focus of lobbying. It’s one thing to form a commission (such as the military base closure commssion) when we already have big government and are looking for ways to reduce it by fast-track means. But a technology officer seems too easily a mechanism for establishing government authority over our most vulnerable, frontier technologies and sciences. Leaving technology “officer-ship” to the private sector seems a better approach, and one more apt to ensure competition among the states as far as any regulatory policy goes.

So as far as a Chief Technology Officer is concerned, America is not any worse off without it, and could be a lot worse off with it. Hearings on the idea are in order at the very least, but best would be for the idea to simply fade.

Over at Ars, fellow TLFer Tim Lee has a good overview of the issue in which he explains how the various legal arguments played out. EFF, which represents the plaintiff in the case, offered several compelling reasons why ignoring fair use in a takedown notice might actually constitute “bad faith” under the DMCA.

As Cord discussed a few months ago, my employer, the Competitive Enterprise Institute, recently received a meritless takedown notice for a global warming ad we posted on YouTube which featured about seven seconds from a copyrighted video clip. Our use of a trivial portion of a copyrighted video was clearly both transformative and non-commercial, yet the content owner still deemed it worthwhile to send us a takedown notice.

I have no idea if the notice was sent with the intent to silence us, or if the content owner was simply ignorant of the fair use defense. Regardless, for several days, until we filed a counter-notice, our YouTube account was suspended, making over 100 CEI videos were inaccessible. (We learned our lesson about putting all your eggs in one basket—we now maintain a separate library of all of our videos on cei.org.)

Fortunately, CEI has a vigilant and experienced general counsel who promptly filed a counter-notification (as per the DMCA.) Still, we shouldn’t have had to allocate time and resources to defending a video that no reasonable person would consider copyright infringement.

It’s not too much to ask that content owners consider whether a potential infringement is fair use before sending a takedown notice. Of course, many copyright disputes are murky, so expecting copyright holders to perform a conclusive legal analysis of each unauthorized file is unfair. But when the potentially infringing content in question blatantly falls under fair use, copyright holders should be subject to penalty if they send a takedown notice anyway.

Hopefully Judge Fogel’s ruling will put an end to the status-quo’s flawed takedown system in which infringing content is fingered by computers, rather than live human beings. The burden of going after copyright infringement has traditionally rested with the content owner—so why not add one more step to the process to thaw the chilling atmosphere surrounding the fair use of copyrighted material?

As I just reported, the UK (and the rest of Europe) does not have the same level of safe harbor protections as the US. But ISPs just provide the pipes. Turnpikes shouldn’t be liable for their drivers’ behavior, and nor should FedEx be held responsible for what its customers send in their packages. Safe harbor provisions should expand, not contract.

My colleague Courtney Long and I have been posting about a series of contradictory decisions regarding whether eBay should be held liable for the fraudulent actions of its sellers. French courts held the online auction company liable for some of its users’ sales of fake Louis Vuitton purses, but a US court ruled that eBay was not liable for sales of fake Tiffany-branded items.

Apparently, the disagreement isn’t just between the US and Europe - the peril of facing multiple regulatory jurisdictions that all internet companies face. There’s also dissent within the EU. Belgium just rejected L’Oreal’s claims against eBay.

The EU should follow Belgium’s lead, not France’s. In the US, sensible provisions like Section 230 of the Communications Decency Act and the DMCA’s safe harbor provisions limit websites’ liability for its users’ actions. As I wrote earlier:

The International Herald Tribune’s bloggers note that the rulings could set a scary precedent for all internet commerce. Imagine if Craig’s List was responsible for verifying the accuracy of every post - or if Match.com had to ensure that its users were actually as funny and attractive as they claim in their online profiles.

Ebay, Amazon Marketplace, Craig’s List, and even Match.com are essentially smarter online versions of classified ads. They do not sell fake goods. They just have sites on which some individuals sell fake goods. Holding them liable for what others do is a dangerous move.

Look for more on this in a later Philosopher’s Corner on the Principle of Intervening Action.

Ryan summarizes the problem:

Consumers are willing to pay to watch new movies at home, and content producers are willing to transmit them, but government is standing in the way. FCC regulations forbid multi-channel video programming distributors from activating SOC, but firms are allowed apply for a waiver from these rules if they can demonstrate that consumers stand to benefit. The MPAA has applied for a waiver, arguing that “These new Services are exactly the type of ‘new business models’ that the Commission contemplated when it adopted the encoding rules.”

Unfortunately, some oppose the use of these new business models, since owners of old TVs won’t be able to benefit from the new technology. Ryan explains:

HDCP—which stands for High Definition Copy Protection, a digital encryption standard built in to nearly all newer HDTVs—lets consumers watch high-def programming in full 1080p glory over digital, encrypted outputs (DVI and HDMI). The trouble is that some consumers own high-definition displays that aren’t HDCP capable, as the standard wasn’t widely implemented until early 2006. But that’s hardly a reason why those who do own HDCP-enabled devices should lose out on the opportunity to view high-value content that content producers are uncomfortable releasing on mediums vulnerable to piracy.

New-release films are a major target for pirates, so MPAA’s worries about copyright infringement make sense. Typically, high-quality versions of new release films do not become widely available on the usual piracy venues until the film is out on Blu-Ray and DVD. Transmitting brand new movies in high-def on analog component outputs would allow pirates to distribute high resolution releases captured with off-the-shelf equipment.

The government is stopping the MPAA from activating a useful new service that comes with robust protection for its copyrighted content just because some may not be able to benefit from it. Let’s hope the FCC undoes this by granting the MPAA’s petition for a waiver.

This is a good general principle that overzealous copyright fiends should keep in mind: providers of technologies or hosts of material, like websites, should not be held liable for what users do with them.

At CNET, Caroline McCarthy asks the important question why Facebook left Scrabulous alone, in the wake of lawsuits like Google-Viacom challenging websites’ status as safe harbors. McCarthy points out that Facebook in fact regulates its applications fairly heavily (though not nearly to the degree of, for example, Apple’s iPhone App Store). Given how popular Scrabulous was - and how much traffic it generated - it is little surprise that Facebook kept it around, in spite of obvious liability concerns.

McCarthy’s explanation for Facebook’s “neutrality” are pretty intuitive, but the most interesting bit comes near the end of the piece:

Plus, had Facebook taken a hand in the Scrabulous debacle, it would’ve set a messy precedent. “The thing is, there’s 400,000 developers (using Facebook’s platform), and they’re trying to find ways to be successful, and that means copying games that are going to work,” Owyang said. “So you’re going to see more indicators of this.” If Facebook had vocally pulled Scrabulous, goodness knows how many game companies would’ve come knocking on Zuckerberg’s door in Palo Alto with complaints of their own.

And that wouldn’t have been good, because there are plenty of games beyond Scrabulous that have been boosting Facebook’s score on that coveted Valley rating scale, user engagement. “They’re clearly trying to segment quality apps that help the user experience, versus ones that don’t,” Owyang said. Again, in doing nothing, Facebook was doing a whole lot.

“They’re a private entity. They’re not a public utility, (and) they’re not an ISP,” Howell said of Facebook. “It’s perhaps disingenuous for Facebook to use the word ‘neutral’ in that kind of situation, because at the end of the day they do hold all the cards on what people can and cannot do on their site.”

The important question - and one that is fast becoming the next Big Question in copyright debates - is whether Facebook can be viewed as like an ISP, a neutral platform for users to post whatever they want on. The safe harbor question will come up in an increasing number of contexts. No longer are P2P apps the only target of infringment-aiding suits. Should a website like YouTube that hosts infringing content be held liable? What about a website like Facebook that allows infringing widgets? What if Scrabulous was available in the iPhone App Store? What about Google - does placing an infringing page high on its search results make it liable? And what about ISPs that do engage in some network management? How much control do you need to have over content to be liable?

Thoughts?

This got me thinking: What if Google were held liable for the infringement it finds? What is the line between doing a YouTube search and a Google search? Obviously, one line is fairly clear: YouTube actually hosts videos on its servers, while Google just links to them as part of search results.

But that is not the line that is at issue in the Viacom case. There, the issue is whether YouTube employees knew about infringing uses. What if we applied this same standard to Google? Should Google have to take down links to illegal pages? (Remember the firestorm behind Google bombs?) This would stifle free expression online and the purpose of search, which is to provide links to any information desired. Links do not do harm. Enabling access to harmful or infringing material is not the same as actually providing it. In the era of cloud computing and - especially - cloud storage, the distinction between enabling access and providing may become blurred. Let’s hope we remember to air on the side of liberty.

But, Ars points out, “no one wants rightsholders to sue over uses that are 99.5 percent likely to be found ‘fair’ in a court.” In my discussion with him, Sam noted that hosting sites like YouTube have no better way to tell what content is “fair use” than Universal, and so are likely to just take down all uses of copyrighted material, whether exempted or not. This would undermine the whole purpose of fair use.

Thoughts on the issue?

Now, the EU is doing the same. Ars reports that the EU is set to retroactively expand the terms of musical copyrights for an additional 45 years, in order to appease aging rockers who did not save for retirement. Let’s hope that this trend doesn’t continue. Copyrights should expire at some point. Do artists really need to ensure that their great-grandchildren will be collecting royalties 70 years after they die? Is that likely to incentivize more creativity than such nearly-perpetual copyrights stifle?