Guest Interview: In conversation with Ms. Melissa Morgia of IFPI on ‘Digital Music Piracy: Trends, Challenges and the Way Forward’

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IPRMENTLAW is pleased to bring to you a guest interview with Ms. Melissa Morgia, Director of Global Content Protection and Enforcement of International Federation of the Phonographic Industry (IFPI) conducted by Ms. Priyanshi Rastogi, Legal Associate at The Indian Music Industry (IMI). IFPI represents the interests of the recording industry worldwide. IMI is the apex body representing the interests of the recorded music industry in India and is affiliated to IFPI.

In this interview, Ms. Melissa discusses the global trends observed in digital music piracy and the prevailing legal framework in other jurisdictions to combat this menace, and suggests policy changes for India to effectively tackle digital piracy of music.

1. With the availability of cheap smartphones and data in the country, an increasing number of Indian consumers now has access to the internet. From your experience, what would be the impact on content protection and enforcement for rights holders in the music industry?

Mobile is undoubtedly becoming a key method through which we enjoy music today.  However, mobile applications also increasingly serve as a source of infringing content. Improvements to data speeds and accessibility have enabled mobile applications to become piracy enablers. Not only do they provide access to existing piracy forms, mobile applications lend themselves to piracy via emerging technologies and this is the new battle ground for content protection and enforcement work.

The music community needs effective tools in order to tackle this – including disruptive and enforcement measures that can work effectively at scale.  At a minimum, it should not be unduly burdensome to report infringing apps to app stores at scale and for such apps to be removed expeditiously and not be allowed to continue to function and generate revenues.

The major mobile applications store providers play a key role in this ecosystem; in terms of distribution and also monetisation through subscriptions and in some cases, advertising. The availability of infringing apps on the mainstream app stores also provides prominence and the appearance of credibility.  We need the major mobile application store providers to act diligently to ensure that infringing mobile apps and egregious developers are not accessible on their marketplaces.

2. With the proliferation of Short Format Apps in the Indian market, what does it mean for the recorded music industry in terms of content protection?

Unlicensed user-uploaded content (UUC) shortform video applications that make available sound recordings are a significant issue in India.

Such services, whose primary purpose is to make available large amounts of copyright-protected content, invoke safe harbour protections.  In doing so, they use such content to attract a substantial audience and generate revenues from content, without paying anything to creators and right holders.

While there are some positive initiatives in India for escalating cases where notified content is not removed, ultimately, right holders’ recourse is currently limited to “notice and take down”.  This places undue burden on right holders as they must expend substantial resources finding and notifying these platforms of infringements.  Even if the infringement is removed, it reappears, without any means of recourse against the platform or accounts that repeatedly upload infringing content.

3. The notice and take down mechanism currently in use for the enforcement of rights of copyright holders in India suffers from inefficiencies as it burdens rights holders to constantly sift through heaps of content available online. In your opinion, what are some of the appropriate solutions that India should consider adopting to strengthen its fight against digital piracy?

To give a sense of the scale, in the twelve months to October 2022, more than 14.6 billion individual tracks were pirated from stream ripping sites, cyberlockers, bittorrent, and MP3 download sites alone.  Notice and take down leads to an endless game of “whack-a-mole” and is not an effective method for tackling this mass scale piracy.

The solution is to introduce a “notice and stay down” obligation.  This means that on receipt of a notice relating to an infringing piece of content, service providers are obliged to take steps to ensure that all instances of that content are expeditiously removed; and do not appear in the future.

This is an appropriate and proportionate obligation which could be implemented in a variety of ways, including by using automatic content recognition technology which is commercially available and already widely used today by online services.

4. With technological advancement come new ways to game the system, what are some of the prominent forms of digital piracy that have been observed globally in recent times?

Stream ripping has been the most prominent music piracy method globally for several years and it is particularly prevalent in India where 70 percent of respondents to IFPI’s Engaging with Music Study 2022 said they had acquired music in this way. Stream ripping services enable users to create permanent, downloadable copies of sound recordings, which are only licensed for streaming on platforms such as YouTube.  This activity takes revenue away from both local and international artists by reducing traffic to licensed streaming platforms, reducing sales of premium subscription streaming services and diverting sales of permanent downloads.

Now more than ever, emerging technologies are providing opportunities for new ways to experience and interact with music content, but these bring new threats in parallel.  We are carefully watching technology trends such as NFTs, cryptocurrencies, the Metaverse, Artificial Intelligence and Web3. In the new immersive environment, piracy will harm the ability of creators to tell their story in the way they intend. It should also be noted that existing piracy methods persist and continue to evolve – for example, new forms of P2P piracy.

5. How have copyright laws and information technology laws evolved globally to address the issue of digital piracy? How should IMI advocate for keeping up with these changes?

Around the world, we have seen policymakers take steps to update or clarify laws to prevent the misapplication of safe harbours.

Safe harbours were introduced over 20 years ago when the internet was in its infancy. They were intended to protect the online services that were providing the critical infrastructure for the internet.

Today, their misapplication creates the opportunity for some online services to free-ride and engage with copyright-protected material without entering into free and fair licence negotiations or any licence at all for the use of those works. It also offers a pretext for brazenly infringing services to continue to operate.

This not only deprives artists and record companies of their legitimate income and enables piracy, but it also creates unfair competition in the digital music services market.

In Europe, the Directive on Copyright in the Digital Single Market was adopted and came into force on 7 June 2019.  Article 17 of the Directive confirmed that user uploaded services that reactively engage with the content their users have uploaded infringe copyright and are not eligible for safe harbour liability privileges. As a result, these services are no longer able to avoid negotiating licences on fair commercial terms for the copyright-protected content made available on their services.  In the absence of licences, they must take effective steps to prevent unauthorised content being made available on their services.

In the US, the Copyright Office concluded a study into Section 512 of the US Digital Millennium Copyright Act – the law which introduce safe harbours in 1998.  It found that “services that provide additional services that are “related to storage” but go beyond mere hosting, should not be eligible for the safe harbour.”

In Mexico, a legislation was adopted in 2020 which expressly requires hosting service providers to remove infringing content expeditiously and to prevent future infringements of that same content from being uploaded.

India should absolutely keep pace with these changes to ensure that online services are not disincentivised from seeking licences from right holders and cannot exploit opportunities created by the existing law to evade liability.  This is essential to protecting the investment made in India’s thriving local music scene.

What is the solution for India?

Section 79 of India’s IT Act should be reformed to limit its over-broad safe harbours and to clarify the responsibilities of services eligible for them.

This could be achieved by ensuring that safe harbours only apply to neutral intermediaries that are truly technical, automatic and passive and by having a clear legal basis for the liability of online services that actively make available copyright-protected content. The responsibilities of services eligible for safe harbours should include the requirement for the removal of infringing content expeditiously, taking into account the nature of the work, and to prevent future infringements of the same content appearing on their services.

In order to ensure effective enforcement, there should be an obligation to implement robust ‘know-your-business-customer’ (‘KYBC’) procedures and an effective repeat infringer policy.

According to IFPI’s ‘Engaging with Music’ study 2022, overall music piracy in India is amongst the highest in the world at 73 percent. A strong legal framework in India would support the sustainable growth of the digital content markets and help to ensure that Indian content creators and owners are fairly rewarded.

6. Should the government place the onus of enforcement of copyrights on internet service providers (ISPs), domain name registrars (DNRs), and online service providers  play a role in combating digital piracy? If yes, how?

Internet intermediaries provide the technology and infrastructure that enable the accessibility and functionality of infringing services. They also hold vital identifying information in relation to their business customers, with whom they are often in a commercial arrangement.

Accordingly, intermediaries should play a critical role in disrupting piracy and facilitating effective enforcement against the ‘bad actors’ that use their services.  This is especially important where the operators of infringing services cannot be identified or are located in jurisdictions where enforcement is in practice impossible, which is commonly the case.

The government should require greater accountability and transparency for intermediaries. Some of the measures that should be required include establishing a legal basis for effective injunctions against a broad range of intermediaries, having clear obligations to help trace the true identities of infringers and giving right holders the means to access that information for legitimate purposes including investigating and taking action in relation to infringements of intellectual property rights.

The government should also support the development of voluntary arrangements with intermediaries that allow for faster and scalable measures.  Public/private partnerships can be an effective way to implement disruptive measures. A fantastic example from the UK is Operation Creative, an initiative by the City of London Police, Police Intellectual Property Crime Unit.  It includes an Infringing Website List and targets intermediaries used by infringing services, including domain registrars, hosting providers and payment providers.

7. The digital piracy industry thrives on advertisement revenues. Who are the key stakeholders in the digital ads industry that have the ability to disrupt pirate operations and what role can they play in combating digital piracy?

A substantial number of pirate sites generate revenues from advertising.  This includes legitimate ads placed by reputable companies and advertising intermediaries, sub-prime ads involving shady ad intermediaries and ads associated with the distribution of malware.

The advertising business model is lucrative not only for the operators of infringing services, but also for many other participants within the ecosystem.  Both brands and advertising intermediaries play a key role.  As do platforms that feature native advertisements.  All these groups should ensure that they are not associated with, generating revenues from or otherwise deriving benefit from unlawful activities.

The “follow the money” approach to disrupting these practices is aimed at tackling ad-supported piracy business models.  Initiatives such as the Pirate Mobile App List administered by the Trustworthy Accountability Group and Infringing Website Lists, help legitimate entities to prevent advertising from appearing on infringing mobile apps and websites.  Additionally, these can be a helpful resource for other online services and internet intermediaries to identify infringing apps and websites.

8. Usually, users are unaware about the cybersecurity threats associated with consumption of piracy. Could you tell us about how digital piracy is detrimental not just to the creative community but also to the users?

The harm caused by digital piracy extends to consumers more broadly and this is a message that needs to be amplified.  The operators of egregious pirate services and apps are often serious, technically savvy cyber criminals.  They are creative and unscrupulous in designing business models that use popular infringing content to attract users to sites and apps that spread viruses and other harmful content.  Material containing malware can infect the computers of users and gain access to users’ devices to extract personal data, track their activities, and facilitate phishing attacks.

A report published by the Audiovisual Anti-Piracy Alliance on audio-visual piracy cyber risks to European consumers in September 2022 found that within 71 seconds of clicking on a pirate website a user could have their identity and credentials stolen and face ransom demands.  Further, it found that there is a 57 percent chance that an app that contains pirated content is embedded with malware.

“Poly-criminality” is now commonplace amongst intellectual property crimes and presents additional hooks for authorities to bring actions against the perpetrators.

9. Do you feel optimistic about the challenge of copyright infringement today?

With its population size and it’s incredibly rich and diverse music, the Indian music market holds unrealised potential. Piracy remains a significant barrier and we’re committed to tackling this in all its forms but we need the right tools.

We are collaborating very closely with IMI to advance the content protection and enforcement campaign in India.  Together with IMI, we’re ready to work with the Indian Government and law enforcement authorities, in any way we can, to help ensure the music sector in India continues to grow and thrive and those that invest in and create Indian music are able to continue to do so.