FTC Town Hall to Address Digital Rights Management Technologies - Event Takes Place Wednesday, March 25, 2009, in Seattle #539814-00695

Submission Number:
Ulrich Schmitz
Outside the United States
Initiative Name:
FTC Town Hall to Address Digital Rights Management Technologies - Event Takes Place Wednesday, March 25, 2009, in Seattle

Digital Rights Management has developed from one of many peculiar attempts by publishers to enforce copyright laws and in their point of view hinder copyright infringement to a commonly-used technology that has only recently become the subject of public debate and even judicial proceedings. As technologies can at times outgrow or even endanger consumer rights, so has the ever increasing use of DRM in many software applications as diverse as digital music, movies or video games become a source of nuisance and confinement. This of course can be expected from a tool that was first and foremost established by the publishing industry to protect the entrepreneur’s interests, thereby penalizing the customers who now – aware of this development – react hostile. Common examples for this behavior include internet petitions, web forum discussions and low consumer ratings given to DRM protected articles on Amazon.com. The industry often argues that DRM is mandatory to keep their software from being “pirated”, meaning the widespread distribution of illegal copies using file-sharing-platforms. However, DRM is not the same as copy protection. Both DRM and copy protection are completely different technologies with completely different applications. Copy protection is used to prevent the creation of illegal copies whereas DRM can only be put to use after a product has been bought, to influence and restrict consumer behavior. Limiting a product’s number of licenses, render internet product activation mandatory and establishing additional software as an installation requirement are common DRM techniques. These techniques can cause various problems for consumers: A video game with a limited number of licenses loses even more value if offered on a second-hand platform like Ebay, thus punishing the consumer to an unusual extent and eventually limiting second-hand-commerce. The following quote by Dr. Michael Capps, President of Epic Games, one of the most successful video game developers, sums this up very accurately: “The secondary market is a huge issue in the United States […] We don't make any money when someone rents it, and we don't make any money when someone buys it used […]” Another example could be a music album bought from an online store but not downloaded to a new PC or laptop – the money spent on that software is gone if the vendor goes bankrupt without providing a backup. Sadly, publishers still try to hide or postpone info about DRM software shipping alongside their product, often providing no clue whatsoever even on the flipside of a DVD case. The End User Licensing Agreement (EULA) of a given software is sometimes the last source of information about the implementation of DRM. However, the significance of EULAs in general is heavily debated, as to date lawsuits are filled about this subject with no universal und indisputable outcome. The opportunity to act preemptively is waning by the hour. Where the music industry is gradually refraining from DRM-use, video game publishers currently outperform themselves in deploying new strategies to diminish the availability of DRM-free software. If consumer rights should experience the protection they are entitled to, then now is the time to do exactly that: Once the public is out of reach to intervene, a mistake that has been made is difficult to repair. In my opinion, the Federal Trade Commission is in a strong position to meet public demands and as such must thoroughly reexamine this affair. Thank you for your attention.