Getting a Grip

by on February 14, 2006 · 10 comments

James DeLong kindly commented on my recent post mocking his shopping cart analogy.

DeLong has a strange all-or-nothing conception of copyright law. He seems to see only two choices: either consumers must slavishly obey the restraints of DRM, or they have the right to do absolutely anything they like with copyrighted materials. Hence, if I criticize DRM for preventing me from watching DVDs on my iPod, that means that I think Netflix should be illegal.

That’s silly. So is his claim that “it is probable, though not legally certain, that shifing the playing venue [i.e. transferring a DVD to an iPod] would not be classified as fair use.” The courts in Diamond v. RIAA held that “space shifting” of music from a CD to an MP3 player was legal, citing the Betamax decision as precedent. It sure seems like the same reasoning would apply to movies. But perhaps there’s a legal nuance I’m missing.

Finally, I continue to be baffled by this sort of argument:

Furthermore, why is this the law’s business? The single-use, multi-use issue is something that can easily be settled by contract, and the DRM geeks are happily inventing ways to allow such space shifing. Nor is there any reason why a single price should apply to both the single-venue user and the multi-venue user, or any reason to think that market adaptations will not address the issue quite quickly. Linking the scope of these permissions to different prices will actually increase consumer choice and welfare.

I am continually baffled by such an insistence on a point of minor personal convenience, in contradiction to the usual libertarian emphasis on voluntary contracts, and at the cost of destroying the possibility of erecting truly remarkable market-based systems, that would greatly benefit consumers.

Why is this the law’s business indeed? My position is precisely that it’s not the law’s business. Which is why Congress should repeal the meddlesome law it enacted in 1998 and let contract law work unimpeded. I never signed any contract promising not to watch the DVDs I’ve purchased on an iPod. Even if I had signed such a contract, it ought to be enforced through contract law. It’s not a federal crime to break a contract, and you certainly can’t go to prison for doing so. Yet I can go to prison if I circumvent a DRM system.

DeLong is quite right that legal rules are defaults, and that parties should be free to contract out of them. But that doesn’t mean that the defaults are irrelevant. My purpose in citing examples of overly strict DRM (such as playing an iTunes song on a high-end stereo system) isn’t that consumers have an iron-clad right to do these things. Rather, my point was that these are uses that are probably innocuous from the copyright holder’s perspective. It’s likely that copyright holders would grant permission if there were a way for them to do so at low cost. However, because DRM is such a clumsy technology, there is no feasible way for the consumer to ask permission, so even if the vast majority of copyright holders would be willing to say “yes,” consumers are instead told “no.”

DeLong keeps asserting that DRM has rendered fair use unnecessary because technology has lowered the transaction costs for granting permission for a variety of different uses. This is, I think, an argument that could only be plausible to someone who isn’t paying very much attention to the way DRM works in the real world. Real-world DRM imposes a vast array of petty, unnecessary, and irritating restrictions on what consumers can do–restrictions that are of absolutely no benefit to either the consumer or the copyright holder. The reason I bitch about DRM on this site so much is to illustrate just how many problems it creates that have absolutely nothing to do with fighting piracy or enhancing copyright holders’ revenues. The restrictions result in a simple deadweight loss.

DeLong dismisses these activities as matters of “minor personal convenience,” but he doesn’t explain what purpose is served by making them illegal. The reason they’re illegal isn’t because of “voluntary contracts,” but because Congress replaced a flexible body of contract and copyright law with a clumsy and sweeping anti-circumvention rule. I think we need to return to the voluntary, market-oriented system we had before Congress started meddling in 1998.

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