In the lead-up to FTC “Town Hall” meetings on digital rights management, the Electronic Frontier Foundation has issued a statement calling on the U.S. government to “mitigate the damage that digital rights management technologies cause consumers.”
The EFF said DRM, in conjunction with the Digital Millennium Copyright Act, “impedes innovation and thwarts consumers’ rights” and called upon the commission to study copy protection efforts and establish guidelines to minimize its impact on consumers. While many digital content creators and publishers claim that DRM is necessary to protect copyrights and sales of digital media, the group noted that DRM schemes are typically broken almost immediately after their release to the public.
Among the more interesting and salient points in the filing is a statement made by Microsoft engineers who were studying the effectiveness of DRM back in 2002. They concluded that illegal distribution methods, referred to as the “darknet,” would continue to thrive into the future and rather than helping fight piracy, DRM would actually drive more people to it.
“There is evidence that the darknet will continue to exist and provide low-cost, high-quality service to a large group of consumers,” they said. “This means that in many markets, the darknet will be a competitors to legal commerce. From the point of view of economic theory, this has profound implications for business strategy: For example, increased security (eg. stronger DRM systems) may act as a disincentive to legal commerce.”
“Consider an MP3 file sold on a web site: This costs money, but the purchased object is as useful as a version acquired from the darknet,” they continued. “However, a securely DRM-wrapped song is strictly less attractive: Although the industry is striving for flexible licensing rules, customers will be restricted in their actions if the system is to provide meaningful security. This means that a vendor will probably make more money by selling unprotected objects than protected objects. In short, if you are competing with the darknet, you must compete on the darknet’s own terms: That is, convenience and low cost rather than additional security.”
“DRM does not prevent piracy,” said EFF Staff Attorney Corynne McSherry. “At this point, DRM seems intended to accomplish a very different purpose: Giving some industry leaders unprecedented power to influence the pace and nature of innovation and upsetting the traditional balance between the interests of copyright owners and the interests of the public. The best way to fix the problem is to get rid of DRM on consumer products and reform the DMCA, but the steps we’re suggesting will help protect technology users and future technology innovation in the meantime.”
The FTC’s Town Hall meeting on DRM will take place at the University of Washington in Seattle on March 25. The EFF’s filing to the FTC can be read in full here. (PDF format)