·  by Matt Schruers, President CCIA

CCIA Statement for the Record for Section 512 Hearing

Originally Posted On: CCIA

Re: Subcommittee Hearing: Isthe DMCA’s Notice-and-Takedown System Working in the 21st Century?

Dear Chairman Tillis and Ranking Member Coons: On behalf of the Computer & Communications Industry Association (CCIA) , I write to submit the 1 following observations for the Subcommittee’s consideration of the subject of Section 512, and request that this statement be included in the record of the hearing. Section 512 provides critical legal certainty for the digital economy, which according to U.S. government data accounted for 2 6.9% of GDP, $1.35 trillion, in the United States in 2017. 3

The compromise at the heart of the DMCA imposes upon service providers the responsibility of responding expeditiously to complaints by putative rightsholders in exchange for liability limitations. In turn, Section 512 guarantees to rightsholders rapid, ex parte extrajudicial relief from specific acts of alleged infringement upon affirmatively reporting those acts. Congress enacted this regulatory regime that mutually benefits and burdens rightsholders and service providers to encourage “the necessary investment in the expansion” of the Internet. 4 Congress’s prescience in enacting Section 512 of the DMCA allowed the U.S. Internet economy to develop into a leading export industry. This framework is so crucial to the market for online services that it is incorporated as a binding bilateral obligation in numerous U.S. Free Trade and Trade Promotion Agreements so as to remove impediments to market entry by U.S. exporters. 5 The certainty that Congress provided to the then-nascent Internet industry upon enacting Section 512 has encouraged investment and innovation online by providing legal certainty about intermediary liability limitations, enabling a thriving digital economy. Changes to Section 512 6 would disproportionately create burdens on small and medium-sized businesses.

Section 512’s protections are critical for far more than just Internet and technology companies. Tens of thousands of websites and service providers depend on Section 512. An even larger 7 number of individuals, small businesses, and independent creators utilize Section 512-dependent service providers to accomplish their daily activities and engage in commerce, especially in light of the current public health crisis. 8 Five years have passed since Congressional hearings led to the Copyright Office’s report on Section 512 and the digital economy has changed considerably since the Office started working. There are several examples of the report stating conclusions that are no longer accurate. For example, the report misstates certain aspects of U.S. and foreign copyright law. And it should be 9 noted that both Registers who oversaw the drafting of the report departed the Office for executive positions with industry constituencies that have criticized Section 512. Accordingly, CCIA cautions against relying solely upon the report’s analysis for decision-making.

Moreover, the report conspicuously overlooks the problem of Section 512 misuse recently documented by major investigative pieces published in multiple prominent news publications. It is disappointing that the report says so little about fraudulent use of takedown demands to suppress speech, coming on the heels of a major Wall Street Journal investigation that uncovered serious cases of takedown abuse aimed at disappearing legitimate information from public view. The 10 Washington Post also recently covered how DMCA abuse and overclaiming entitlements harms creators, and the New York Times just covered how easily Section 512 can be “maliciously” “weaponized by authors seeking to take down their rivals.” This problem has been documented 11 since at least 2008, when the late Sen. John McCain was himself targeted with an inappropriate takedown demand. 12 Given the underinclusive and in some cases inaccurate nature of the Office’s report, I encourage the Subcommittee to consider scholarship on the subject, including the research cited in this letter.