Karl Herchenroeder

BMI and ASCAP consent decrees let companies like Amazon, Facebook, Google and Netflix not pay songwriters what they deserve (see 1810010031), and it’s good DOJ is exploring these decrees, National Music Publishers Association CEO David Israelite said in a Technology Policy Institute podcast. Songwriters “should have a right to negotiate the price of what they create in a free market, and the consent decrees prevent them,” he said in a conversation TPI promoted this week that included RIAA President Mitch Glazier. Thursday, the Internet Association didn’t comment. The Music Modernization Act’s Mechanical Licensing Collective (see 1809180059) will revolutionize how the music industry treats data, Israelite said. The MLC establishes a royalty payment database governed by a board of 10 publishers and four songwriters with oversight from the Copyright Office. It’s unique that the industry won’t “treat the ownership information as proprietary or confidential but rather as public information that is designed to get proper payment,” Israelite said, noting sound recordings will be publicly accessible for three years when the proper owner can’t be found.

Having oppositely controlled chambers of Congress bodes well for bipartisan negotiation on regulating online privacy, tech trade group executives told us Wednesday. Industry allies agreed Republicans and Democrats remain far apart on specific policy. President Donald Trump in a post-election news conference said he’s open to working with Democrats on regulating social media companies, though he called Silicon Valley’s alleged anti-conservative bias a “serious problem.”

Chairman Joe Simons recused himself from the FTC’s Qualcomm case in California federal court claiming anti-competitive patent licensing behavior (see 1809190041), an agency spokesperson said Tuesday. The spokesperson declined to give a reason. Simons previously was a partner at Paul Weiss, which has represented Qualcomm. Simons’ recusal divides the commissioners evenly along party lines, and the commission wouldn't act in a 2-2 vote. Documents Simons submitted to the agency disclosing his previous clients and investments don't list any Qualcomm entities. A federal judge on Tuesday denied a joint request from the FTC and Qualcomm to delay the ruling to allow for settlement talks.

The Supreme Court will hear argument Nov. 26 in Apple v. Robert Pepper, with implications for app stores. The conservative majority figures to favor Apple interests, stakeholders told us. Justices will decide whether Apple customers can sue for antitrust damages in a case, docket 17-204 (see 1810100058), stemming from a lawsuit claiming Apple has a monopoly through its App Store. Apple, which collects a 30 percent commission on apps purchased, limits iOS users to installing apps through that store, unless they jailbreak their phones, voiding warranty. Pepper argued this anticompetitive model lets developers pass added costs onto users. App developers benefit greatly from the App Store, given the booming app economy, and the liability and security protections the store offers, Pepper argued, making it unlikely developers will challenge Apple’s model.

The Supreme Court debated the wisdom of directing Google’s $8.5 million data privacy settlement to charitable and academic organizations rather than to alleged victims (see 1805010051). During oral argument Wednesday in Frank v. Gaos (docket 17-961), Chief Justice John Roberts suggested Google could have awarded the money to organizations it hadn't contributed to in the past, alluding to criticisms from Ted Frank, litigation director for the Competitive Enterprise Institute, which challenged the settlement. New Justice Brett Kavanaugh asked whether it would be better to have a lottery or a pro rata system to ensure an injured party benefits. Justice Samuel Alito’s questioning suggested the deal awards a lot of money to attorneys, the class-action members get nothing, and groups potentially partial to Google benefit. Justice Ruth Bader Ginsburg suggested an indirect benefit outweighs what class members could have gotten. Frank told her each claiming class member “probably could have gotten between $5 and $10” with typical claims rates. Justice Sonia Sotomayor said of the settlement, “It seems like the system is working.” Google attorney Andrew Pincus said the question is whether the cost of distributing the money means the class gets essentially nothing, making an indirect benefit better.

Diminishing software copyright by overbroad applications of fair use or denial of protection would be a “step in the wrong direction,” Copyright Alliance CEO Keith Kupferschmid said Tuesday at an FTC hearing. The software industry would be forced to retrench to a closed model, no longer sharing code and instead relying on proprietary contracts to keep code protected, he said. He repeated his organization’s support for HR-3945, which would establish a voluntary small claims tribunal in the Copyright Office. Public Knowledge Policy Counsel Meredith Rose urged the FTC to collaborate with the Copyright Office on the overlap between copyright and competition, which increased with IoT technology. Hearings on copyright continue Wednesday (see 1810110056).

Antitrust action against Microsoft in the late 1990s enabled an explosion of innovation, allowing platforms like Google, Facebook and Amazon to solidify dominant positions, academics said Tuesday at FTC hearings (see 1810150052). Microsoft let companies use the internet as a development platform and expand using HTML protocol, said Columbia University Law School professor Tim Wu.

The Department of Homeland Security reduced the time it takes to patch a cyber vulnerability to within 30 days, Assistant Homeland Security Secretary for Cybersecurity and Communications Jeanette Manfra said in an interview for C-SPAN's The Communicators series, set to be televised later She conceded the agency struggled with patching vulnerabilities in an acceptable amount of time in the past. Shrinking the response had a ripple effect throughout the federal government, she said. The digital economy is so interconnected that cyber infections can spread quickly across the world, she said, calling cyberthreats a “constant, ever-present activity that everyone has to face.” She said the department had “limited visibility” of foreign influence campaigns in the 2016 election. DHS has worked hard in the past two years to deploy more “sensing capabilities,” particularly with state and local authorities, she said, and more than 1,500 jurisdictions participate in information sharing.

ThePirateBay.org, an illicit torrent indexing service, remains a prominent target for the music, film and video game industries, show comments to the Office of the U.S. Trade Representative posted this week. USTR collected comments through Monday for its Special 301 report on countries and groups that infringe U.S. intellectual property.

DOJ can appear during oral argument in Apple’s appeal of a class-action antitrust lawsuit alleging it monopolized distribution of App Store applications (see 1806180053), the Supreme Court decided Monday in Apple v. Robert Pepper, et al., docket 17-204. The solicitor general in May asked the court to grant Apple's petition, arguing the 9th Circuit misapplied Illinois Brick preventing indirect purchasers from seeking certain antitrust damages passed on by third parties (see 1805090051). States have “allowed indirect purchasers to sue under state antitrust law, leading to decades of experience that contradict the predictions and policy judgments underlying Illinois Brick,” 31 states argued in favor of Pepper. Computer & Communications Industry Association argued in favor of Apple, saying pass-through harm leads to duplicative damages claims in conflict with the high court’s precedents. Illinois Brick “preserves standing for a direct purchaser to recover damages for overcharges, whether or not those charges are passed along to downstream customers,” BSA|The Software Alliance argued. Open Markets Institute argued “Apple falsely implies its app store is a neutral and open marketplace. … Through contractual and technical restrictions, the company compels owners of iPhones and developers of iPhone apps to conduct business solely on its App Store and on its terms.”