In the early days of the Internet, some courts expected online services to be a sort of vigilante Internet police for copyright. Imagine policing the Internet for infringement without a list of what to police for, no reliable databases to consult, and no knowledge of who had licensed what to whom. With ambiguous and inconsistent laws (or no laws at all), ruinous liability was always around the corner.
Congress wisely changed that in 1998 with a safe harbor, Section 512 of the Digital Millennium Copyright Act (DMCA), which provided much needed clarity to Internet companies. Under the safe harbor, in return for responding expeditiously to complaints of infringement, the liability of online services for misconduct by third parties is limited. Rights-holders, in turn, get quick action on allegations of infringement without the time and expense of going to court.
On Thursday, as part of its ongoing review of U.S. copyright law, the Subcommittee on Courts, Intellectual Property, and the Internet of the House Judiciary Committee is holding a hearing on this crucial framework.
The Section 512 safe harbor is a foundational principle of the Internet -- so important to our economy that we have incorporated it into our free trade and trade promotion agreements. Although DMCA compliance can be expensive for private sector Internet services, it is widely regarded as the cost of market entry for an Internet-based service: a regulatory obligation undertaken by responsible corporate citizens.
The safe harbor provides essential liability limitations to companies and investors. Investors have overwhelmingly stated that they are more likely to invest in companies when there are unambiguous copyright regulations, according to a recent Booz & Company study. As a result, Section 512 has helped to nurture a successful Internet industry in the United States, and lack of legal certainty abroad has demonstrably deterred the same investment and innovation.
The DMCA has been referred to as "the third rail of IP politics," due to the controversy and risks it attracts from all stakeholders (from rights-holders to service providers to the public).
But the balance that Congress struck in 1998 places compliance burdens on both rights-holders and service providers -- and provides both with benefits.
This doesn't mean there should be no scrutiny of how parties use the DMCA, however. Because online services are loath to forfeit the safe harbor, and can't tell duplicitous claimants from honorable ones, would-be censors seem to gravitate the DMCA takedown process to suppress speech they don't like. The fact is, we tread into dangerous First Amendment territory any time one person can suppress the speech of another.
Congressional inquiry could shed light on how DMCA takedown tools have been abused. For example, academic researchers found a large number of cases in which businesses targeted competitors, such as one case identified in the recent Google Transparency Report where a driving school sought its competitor's homepage to be disappeared from search results, on the basis that the competitor had copied an alphabetized list of cities. Other examples of attempted takedowns involved an employer targeting blog posts by a disgruntled employee and a movie studio seeking to suppress a review.
DMCA abuse has also stifled speech over unfavorable interviews, embarrassing news stories, and political campaign videos. Some rights-holders fired multiple takedowns at an unflattering documentary about their legal war with the Pirate Bay. HBO even sent takedowns over lawful open source software, and just last week, it was reported that the DMCA was used to try to take down publicly available facts (which likely aren't even protected by copyright).
While the DMCA should remain undisturbed as a cornerstone of our thriving Internet economy, Congress can still shine a light on bad actors trying to snuff out competitors or lawful speech online.