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Testing the legality of Apple’s iTunes Music Store using eBay? Bad idea.

By September 4, 2003law

C/Net has this story about a fellow who is using eBay to begin a bizarre challenge to Apple’s iTunes Music Store. Here’s the story:

George Hotelling wants to know. In a move that could spark a novel legal test of Internet music resale rights, the Web developer in Ann Arbor, Mich., on Tuesday night put a digital song he purchased online at Apple Computer’s iTunes Music Store up for auction on eBay.

Hotelling said he isn’t all that concerned about getting his money back for the Devin Vasquez remake of Frankie Smith’s song “Double Dutch Bus,” which cost him 99 cents. Instead, he said he’s using the attempted sale to probe some thorny consumer issues stemming from commercial online music services, in particular, technology known as digital rights management that’s used to prevent unauthorized copying. In that spirit, he’s promised to donate anything above his purchase price to the Electronic Frontier Foundation (EFF), an activist Internet legal group.

In case you didn’t know, when you buy a song from Apple’s iTunes Music Store it is locked so that you can only play it on, at most, three computers. However, you can put the song on an unlimited number of iPods and also record it an unlimited number of times to CD. It seems to me, that as a form of ‘digital rights managment’ (or DRM) this is a pretty weak strain.

Amazingly, the bidding for this DRM-crippled music file (which eBay plans to cut short because it “violates eBay’s listing guidelines on the sale of products delivered electronically through the Internet”) was, according to the C/Net article, up $15,000 at one point. Yes, that’s right. For a song that cost .99 cents. And people say its getting harder to make money on eBay? Well, obviously, the munificent bidding is happening because the bidders want to raise money for the EFF (although you have to doubt that the bidders are really expecting to have to pay).

Even though the EFF didn’t know about this bizarre fund-raising ploy prior to its implementation, I’m a bit disappointed with their response to it. Fred von Lohmann, a senior staff attorney with the EFF criticized the iTunes scheme, saying: “It underscores the fact that when you purchase digital music online today, you may be getting quite a bit less for your money than when you purchase a CD in a store,…If you buy it in a store, it would be absolutely crystal clear that you could auction it on eBay.”

Yeah, so what? He didn’t buy it in a store. He bought online using a service whose terms and conditions (for better or worse) he agreed to. If he didn’t like the concept of being restricted in that way then he shouldn’t have bought the music. And he apparently also agreed to terms and conditions about what he what he could properly auction on eBay. Fine, he didn’t have bargaining power to reject the terms presented by either eBay or Apple. Yeah, yeah, yeah (to quote the Beatles whose music is not yet available on iTunes). He was ‘testing the legality” and what’s wrong with that? A couple of things.

If he wanted to test the “first sale issue” (which is the legal doctrine that he was obviously trying to challenge) why didn’t he just burn the song to a CD and announce where it came from and sell the CD? He probably would not have raised as much money that way. And he would have undercut his ability to argue that he had a “first sale” issue. And that’s the point, isn’t it? To challenge the first sale issue involved in Apple’s iTunes Music Store, and perhaps to raise money fund a legal challenge against it.

Whatever the goal, the method is patently half-baked. If DRM is something we need to worry about, and if the EFF is going to take the lead in raising our awareness of the problematic aspects of DRM, then embracing this amateurish challenge is a bad move.

I’m worried about DRM, like a lot of people are (e.g. what happens if books or music that are in the public domain can be locked up indefinitely? That’s one conceivably legitimate DRM concern). But Apple’s iTunes concept is not a heavy-handed DRM approach; it is a good step forward in the effort to create a legitimate way to distribute music online in a way that ensures that artists are properly compensated, and which provides a convenient service that is cost-effective for consumers.

This eBay auction seems more like a public relations ploy or a fund-raising gambit than a well-thought out legal challenge. Need proof that this was a whimsical effort? Check out George Hotelling’s weblog post about how he conceived of this idea. [Sigh] The EFF shouldn’t endorse this sort of ramshackle legal challenge. It can only serve to diminish their credibility when they have to endorse a more seriously mounted legal challenge to DRM, which is certainly going to happen one day soon.

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  • Ernie says:

    Well, DRM and ‘the first sale doctrine’ are at many levels entertwined, but that doesn’t elevate this half-baked effort into a worthy legal challenge. I’ve watched a lot of legal challenges and at this point I have a good idea of which ones don’t work. This one not only didn’t work (because eBay is yanking the auction) but it sets a bad tone for subsequent challenges. In the military, you don’t just haphazardly send soldiers up the hill to attempt to take a valuable piece of land. It’s foolish to squander lives without some sort of plan. Our legal system is a resource and it is foolish to hurl things at it (especially when the people doing the hurling are, like Hotelling, completely unfamiliar with the legal system) without a coherent strategy. Lessig had a coherent strategy for the Eldred case and, despite his brilliance and careful planning and effort, he was unsuccessful (at one level) in his challenge. If the court had already dealt with and decided a bunch of half-baked challenges, his task would have been that much harder.

    We need for intelligent people to realize that our legal system is not a laboratory for half-baked legal experiments. Hotelling can be forgiven for his effort because he probably doesn’t know better. It would be nice if he, and others, did know better. The EFF, if they really said the things they did in the context that is reported in the article, demonstrates poor judgment. They should know better. But maybe they just like sending bodies up the hill without any coherent strategy.

  • Jenny says:

    I’ll take any ploy that highlights the problem of first sale in the digital age because the very existence of public libraries depends on it. Not enough legislators realize what they’re doing, and if this helps, I’m all for it.

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