From "podcast" to "poke", "wiki" to "weblog",
the internet generation has a language all of its own. But since web guru
Tim O'Reilly popularised the phrase "Web 2.0" in 2004, even those
who never considered themselves internet-literate have worked the new
technology into their daily lives. Facebook, the social networking
phenomenon, dominates water cooler conversations everywhere, having gained a
staggering 42 million users since its worldwide launch in 2006. YouTube,
which was founded as recently as 2005, attracts some 100 million page views
a day.
New forms of interaction are forcing us to develop new social rules: is it
wrong to spy on your ex's Facebook page? At what point does an unanswered
friend request become a gentle hint that you are not wanted? But such rapid
change also raises a more serious question: do we need new laws to govern
this changing internet landscape?
Despite calls for change, however, established copyright and privacy laws
remain relevant and effective, even if they are unknown to many of the Web
2.0 generation.
Certainly, the ease with which people can communicate on the internet now
poses a huge legal challenge. Technology allows breach of intellectual
property (IP) and privacy laws on an unprecedented scale. Every time we
visit a social networking site we find both personal information about the
users and unauthorised copies of their favourite songs and videos. Even
signing off a blog post with a copied image of your favourite cartoon
character may infringe IP rights. But IP law has faced these challenges from
the moment the internet became widely used.
Copyright law has proven itself to be remarkably flexible in keeping pace with
new technology, dating back to the first landmark case in 1996, when the
Church of Scientology sued Netcom, an internet service provider, after an
individual posted excerpts from its sacred texts on a bulletin board. A US
court said that service providers should be protected from liability if they
host infringing content unknowingly. That approach was backed up in Europe
by e-commerce laws passed in 2000.
The same can be said of privacy law. Fears over the security of our personal
information have been reignited by Facebook’s announcement that it intends
to share users’ profiles with search engines unless they opt out, and by
Google’s proposed acquisition of DoubleClick, the online display advertising
agency. Critics are nervous that combining the world’s largest search
database with information on browsing habits collected by DoubleClick could
give Google an unfair advantage. Eric Schmidt, the search giant’s chief
executive, tried to allay such fears by suggesting a new set of privacy
rules administered by a global body. But these calls ignore an existing and
potentially effective privacy framework.
In 1980 the Organisation for Economic Cooperation and Development established
the principle that individuals are entitled to control the use of their
personal data, placing a duty on organisations to protect that information
and abide by such limitations. This remains preferable to an "opt-out"
system, which only works if individuals can identify the entities using
their data. There are so many organisations out there in the online world
with access to personal information that opting out of each of them would be
impossible for most ordinary users.
An opt-out system would also depend on organisations behaving appropriately. A
system under which service providers are not liable for a violation of
privacy until an individual proves he or she opted out is far easier to
abuse than one in which the use of their personal data is restricted without
permission. The “opt in” laws we already have in place are far more
practical for users—and they do not unfairly impede business.
To be sure, questions over the relevance of existing IP and privacy laws have
been raised by difficulties in enforcing them. Online copyright infringement
is notoriously widespread, with the music industry in particular suffering
as a result. The record industry has launched tens of thousands of cases
against individual downloaders—a US jury recently imposed damages of
$200,000 against a single defendant—but despite such heavy deterrents many
people are either unaware that they are breaking the law or are unconcerned.
But getting the companies providing the services that enable individuals to
infringe to play ball is another matter. In the US, YouTube and its parent
Google are facing legal action from Viacom for allowing its copyrighted
material to be uploaded to the video sharing site. Universal, the largest
record label, initially attacked MySpace for encouraging illegal sharing of
music before developing a branded virtual jukebox that users can post to
their profile or blog. Some labels have done deals with MySpace and have
licensed official content to YouTube, which also recently signed a
ground-breaking deal in the UK with the MCPS-PRS collection society, a body
that collects and distributes royalties due to music publishers, songwriters
and performers, enabling payment for music used on the site. The
relationship between Web 2.0 sites and content owners is gradually being
determined through this series of partnerships and disputes.
In the meantime, consumers born in an era of CD burners and file-sharing are
becoming increasingly used to “free” content. Depending on your perspective,
Radiohead's recent release of a “pay what you like” download album
represents either a rallying cry for the democratisation of music or the
death knell for the industry. Guy Hands, whose private equity house recently
purchased EMI, the record label, referred to Radiohead's initiative as "a
wake-up call which we should all welcome and respond to with creativity and
energy". A generation forgetting the very concept of paying for content
is starting to question why the law should uphold rights to it.
The answer is as much common sense as economics. IP rights such as copyright
exist to encourage investment in creativity and innovation. If talented
people (or their investors) cannot own their creations, they cannot make
money from them. With their incentive destroyed, so the argument goes, they
are less likely to invest time in creating and more likely to spend time
pursuing other goals, resulting in reduced choice for consumers and less
quality of creative output.
In fact, it seems that new business models making use of existing IP laws are
emerging to satisfy the Web 2.0 generation. For example, Sellaband.com
offers free music downloads, encouraging users to back aspiring artists by
purchasing a stake in their earnings. Users and artists earn from the site's
advertising revenue. Claims that these new models remove the need for laws
to protect ownership are misplaced. They cannot generally operate without IP
rights and, in fact, Sellaband's seemingly radical approach relies on
upholding music copyright; it is essentially an inventively structured
publishing deal.
The restructuring of the music industry is not an abandonment of music
copyrights, but a move towards exploiting them via the thriving merchandise
and live music markets and the reliable music publishing business, which
generates income for the rights owner whenever a song is broadcast (an
opportunity arguably improved by Web 2.0). Prince, who sparked a similar row
to Radiohead by giving away his album with a national newspaper, claims to
have generated more income from the added publicity for his UK tour than he
would have from a traditional release. The legal rights in content protect
not just the ability to sell it, but also the potential for these other
means of generating value around it.
Web 2.0 does not destroy rights in content; it challenges and empowers rights
owners to find new ways of exploiting them. Similarly, privacy rights are
more relevant than ever in the age of social networking. Law makers face a
challenge in striking the appropriate balance between protecting rights
owners and being responsive to new approaches to digital content and
personal information. But in doing so, they are not starting from scratch.
Instead they are building on an existing legal framework that has so far
proved workable.
Marc Dautlich and Nick Eziefula are associates in the media, communications
and technology group at Olswang
