21st Century Hearings: Constitution Center October 23-24 #FTC-2018-0090-D-0023

Submission Number:
Vanessa Pierce Rollins on behalf of Prof. Sean O'Connor
Initiative Name:
21st Century Hearings: Constitution Center October 23-24
(1 of 2) Dear Secretary Clark, I respectfully submit these comments in response to the request for public comments following the Federal Trade Commissions Consumer Protection in the 21st Century Hearings on Innovation and Intellectual Property Policy, held October 23-24, 2018. I participated in person as a panelist during the Competition Policy Copyright Law Session of the Hearings. I believe the discussion generated near consensus that more transparency is needed in copyright-related licensing and that the FTC has an important role in developing relevant guidelines. My comments will address both business-to-consumer and business-to-business copyright-related licensing frameworks and will conclude with some brief suggestions related to the intersection of copyrighted content and artificial intelligence. I. Introduction As a threshold matter, the FTCs enforcement and policy agenda should reflect both current status of copyright law and current business practices. Although historical practices provide valuable guidance, the rise of public-facing firms (Big Internet) and the ever-increasing availability of more content than ever before, in more formats and price points than ever before, necessitates that the FTC agenda evolves accordingly. Of course, free and fair markets and robust competition should serve as underlying goals for any action or policy. II. Business-to-Consumer Licenses The sheer volume and availability of content raises concerns about potential unfair competition and consumer protection issues. In the dynamic world of audio and video streaming services, on-line computer games, apps, ebooks, and software, consumers may be giving up disproportionate rights for the convenience of virtually instant access to the content. Business-to-consumer (B2C) licenses provide the most apparent and troubling examples. Due to the length and complexity of typical B2C licenses, most consumers do not fully understand the terms and conditions to which they have agreed. Vague or buried provisions in such licenses may grant the service provider broad rights to consumers content and information, including perpetual licenses and the right to assign and sublicense that content. Many consumers, especially teenagers and young adults, learn this the hard way; once posted, sensitive content is difficult if not impossible to take down. What can be most surprising to consumers is where their content may end up. Those obscure sublicensing and assignment rights mean that sensitive or hoped-for proprietary content can appear on any number of other sites even if one deletes or makes it private on the initial platform. Further, it is not common knowledge that posting to the various social media platforms may effectively surrender a creators ability to control or monetize their work. The lack of standard functions on streaming sites and some photo apps for others to capture the streams or download the files can give a false sense of control to creators. First, stream ripping software and tools to capture images off any platform means that the content can be redistributed far and wide. Of course, the foregoing may well be copyright infringement. But, second, the more insidious problem is the lawful-yet-covert transfer of content behind the scenes under the B2B contracts discussed in Part III, enabled by the creators initial B2C license. Similarly, consumers may not appreciate their rights and obligations regarding future license modifications. B2C licenses regularly employ rolling contract provisions, where consumers agree in advance to subsequent changes by the service provider with little if any notice. The required consideration for the license modification is often based on nothing more than the consumers continued use of the service. Provisions in B2C licenses may also be constraining consumers legal options in the event of a dispute. B2C licenses often contain mandatory arbitration clauses with no opportunity for discovery, jury, or judicial appeal. Such clauses, which often disfavor consumers by limiting damages, providing an inconvenient forum, or prohibiting class processes, are increasingly unpopular. These concerns should not lead to the conclusion that B2C licenses, which are predominantly take it or leave it contracts of adhesion, are necessarily improper. There is nothing inherently wrong with adhesion contracts. In theory, a diligent minority of consumers would catch problematic provisions or changes, but the torrent of B2C licensing activity precludes timely remedial action. This vast activity also leads to a gradual devolution of consumers reasonable expectations in B2C licenses. Big Internet companies, who disrupt as a mission statement and ask forgiveness instead of permission as a business model, push the envelope so that what was (and should be) unreasonable may no longer be for purposes of contract defenses. (see 2 of 2)