My audio-only content license guide, EU fines Meta $414m, Creators & Google face class action, Twitter hit by DMCA repeat infringer lawsuit, + more!
This is Creator Economy Law, a newsletter dedicated to exploring and analyzing the legal issues surrounding the creator economy, creators, and internet platforms. If you enjoy what you’re reading, share with friends, and invite them to subscribe using the button above and share using #CreatorEconomyLaw.
Happy New Year! 🌟 I hope your 2023 is off to a fantastic start. It’s been a busy start to the year for creators and the creator economy. If you have any updates or thoughts you’d like to contribute to this newsletter, I’d love to hear from you! Otherwise, enjoy reading…
Here’s what’s been happening in the world of Creator Economy Law.
Meta fined $414 million by the EU
The Irish Data Protection Commission (DPC) has issued a fine of 390 million euros ($414 million) against Meta in connection with two inquiries it launched against the company regarding its data processing activities. The inquiries stem from two separate complaints by data subjects that were made back on May 25, 2018, the day the GDPR went into effect.
“Final decisions have now been made by the DPC in which it has fined Meta Ireland €210 million (for breaches of the GDPR relating to its Facebook service), and €180 million (for breaches in relation to its Instagram service),” the DPC explained in its press release. Meta is also given three months to reach compliance.
“We strongly believe our approach respects GDPR,” Meta wrote in a statement posted to its site, “and we’re therefore disappointed by these decisions and intend to appeal both the substance of the rulings and the fines.”
- “Data Protection Commission announces conclusion of two inquiries into Meta Ireland” via Irish Data Protection Commission
- “Meta told to reassess legal basis for EU personalised ads” by Padraic Halpin via Reuters
- “How Meta Uses Legal Bases for Processing Ads in the EU” via Meta
- “Meta fined over $400 million by top EU regulator for forcing users to accept targeted ads” by Ryan Browne via CNBC
Meanwhile… Meta has banned seven businesses from Facebook for engaging in surveillance-for-hire operations. Iubenda has more coverage.
Ninth Circuit sends Google/YouTube, Ryan Kaji of Ryan’s ToysReview, Mattel, Hasbro, and other creators back to the district court, COPPA doesn’t preempt state privacy laws
Google and YouTube must face state-level privacy law violation claims that were brought as part of a class action against the companies, as well as several kids and family YouTube channel operators including Cartoon Network, Hasbro, Mattel, and Ryan Kaji of Ryan ToysReview. The 9th Circuit recently held that COPPA doesn’t preempt state laws given the “inconsistent” word Congress used in 15 USC § 6502(d), and remanded the case to the district court to continue.
- I have written an in-depth article exploring how this decision could impact creators. Subscribe to the Passionfruit newsletter if you want to catch that when it drops! Or, you can keep an eye on my socials for when it drops on The Daily Dot.
- Download the opinion over on CourtListener.
- “Suit accusing YouTube of tracking children is back on after appeal” by Eric Bangeman via ArsTechnica
Trump’s Return… to Facebook.
Meta is reportedly going to soon (as in later this month) announce its decision regarding whether or not Trump will be allowed to return to Facebook. The Financial Times’s Hannah Murphy broke the story. CNN has also separately confirmed with a Meta spokesperson. Axios has a great article exploring the potential impact of the decision. If you recall, Twitter 2.0 has already reenstated Trump’s account, but he has yet to return and actually start using the platform again.
Twitter hit with DMCA repeat infringer lawsuit
Backgrid USA, Inc. is (according to their own complaint 😄) “the world’s premier celebrity-related photograph agency and provides highly sought-after images of celebrities around the world to top news and lifestyle outlets.” They have filed a copyright infringement lawsuit against Twitter, Inc. (as well as 1-10 unnamed “Does”) alleging that Twitter failed to: (1) appropriately respond to numerous DMCA takedown requests, violating the repeat infringer requirements under 17 U.S.C. § 512(i); and (2) “expeditiously” remove the content, as required under 17 U.S.C. 512(b)-(d). Backgrid’s complaint alleges copyright infringement (direct, contributory, and vicarious… ooh my!) as well as seeks the court to issue a declaration that the DMCA safe harbor doesn’t apply.
- Download a copy of the complaint.
- “Twitter Hit With $228.9m Copyright Infringement / Repeat Infringer Lawsuit” by Andy Maxwell via Torrent Freak
🗣 Franklin’s Take: It’s a huge issue if Twitter hasn’t been following the requirements for their DMCA safe harbor protections and potentially exposes them to significant liability. The dates that the DMCA takedowns were sent, as identified by Backgrid in the complaint, span the period before and after the transfer of ownership to Elon (Page 6+ of the complaint identifies the dates they sent some of the takedowns). Therefore, the claims aren’t entirely related to any potential mismanagement during the transition period and layoffs. If the public terms of the deal are accurate, Elon bought the company “as is”, so the new entity is potentially on the hook for both the previous and current alleged failures to take action.
- “Last year, for the first time since 2014, Google and Meta collectively brought in less than half of all U.S. digital advertising spending.” writes Kristin Schwab on Marketplace in the article “As our online behavior changes, companies spend less ad money on Google and Meta.” The WSJ’s Patience Haggin also published a deep-dive into the problems facing internet platforms as we move into 2023. “Google and Meta’s Advertising Dominance Fades as TikTok, Streamers Emerge“.
- YouTube has reversed the December 2022 takedown of a documentary focused on an unreleased Zelda video game. “YouTuber Beats Nintendo After It Tried Nuking Evidence Of A Canceled Zelda” by Ethan Gach via Kotaku
- “YouTube has a new monetization policy regarding profanity. Creators are unhappy with the rollout.” by Sam Gutelle via Tubefilter
- “Creator economy experts say 2023 will be a buyer’s market. Here are 5 M&A themes to watch, from tech buyers like Shopify to startup consolidation.” by Marta Biino and Sydney Bradley via Insider ($$)
- The YouTube video-ripping site battle continues. “RIAA Wants $250,000 in Attorneys’ Fees from Yout, Without Delay” by Ernesto Van de Sar via Torrent Freak
- Great recap of the Pino v. Cardone Cap. LLC decision (see Pino v. Cardone Cap., LLC, No. 21-55564, 2022 WL 17826876 (9th Cir. Dec. 21, 2022)) decision – “Ninth Circuit Holds That Social Media Posts Can Give Rise to Securities Act Liability” via Morgan Lewis
- “Meta settles Cambridge Analytica scandal case for $725m” by Shiona McCallum via BBC
- “Meta buys smart lensmaker Luxexcel to further AR ambitions” by Igor Bonifacic via Engadget
- TikTok builds upon its Content Levels to strengthen enforcement of sexually suggestive content on its platform. Tubefilter’s Sam Gutelle covers the updates.
- “Twitter poised to ease political ad ban” by Rebecca Klar and Ines Kagubare via The Hill
- A hack at Twitter reportedly resulted in the leak of email addresses for 235 million Twitter accounts. Read more by Joseph Menn in The Washington Post.
- “The EU just signed its Declaration on Digital Rights and Principles – but what is it?” by Sarah Palmer via euronews
- “Exercise Choreography and Alleged Betrayal: Tracy Anderson vs. Megan Roup” by Brian Murphy via Frankfurt Kurnit Klein & Selz PC
Audio-Only Content Licensing Guide
Audio-only livestreams, such as Twitter Spaces and Clubhouse, are hot right now. But, what licensing structure applies when music or other audio works are used as part of the livestream? I had a fun conversation in one of my group chats with attorneys. I’ll break down what I shared, but would love to hear your thoughts, too!
What type of license? A music license that is similar to a podcast would work, since Twitter Spaces are typically available on-demand afterwards, just like podcasts. Some creators and hosts of Clubhouse sessions record and release the content through other distribution channels, such as a podcast feed, afterwards. For music content, a synch license covers the publishing and the master use license covers the sound recording, each of which are independent copyrightable works. Both licenses are needed and often require separate licenses for major label/pub tracks, or a simplified license from stock asset platforms such as Epidemic Sound.
Overall, live audio streaming is an interesting situation since it may not be considered a traditional synch/master use license structure (such as for tv, film, or YouTube videos) because it’s arguably audio only and not being synchronized (or edited) in with a visual component. That being said, Twitter does have a visual component when listening (such as the speaker pfps or pinned tweets), but would that be considered a synch? I’d argue no, but it ultimately is up to the content owners providing the licenses. It can become more complicated if the Twitter Spaces or Clubhouse session isn’t recorded and is truly just an ephemeral livestream, but that would likely just be a license similar to a synch/master use.
Existing laws are arguably not doing well to keep up with internet platform changes, such as internet-only streams like Twitter Spaces or Clubhouse. Creators (and platforms) are mostly working on taking existing licensing types to fit these newer uses. This is advantageous to the music industry because they still get paid and can set the rates themselves via direct negotiation (as opposed to radio and similar non-interactive royalty setting processes).
For non-music audio works, such as sound effects or other audio works, there would likely be just one license needed to cover the use of the sound clip. It’s also important to keep in mind that name, image, and likeness (NIL) rights may come into play here. Some laws recognize a person’s right to protect their voice within the scope of NIL, so esuring a release is obtained for voice rights is important.
Automatic Content Recognition (ACR) Systems. I haven’t seen that Twitter has an automatic content recognition (ACR) system in the same manner as YouTube or even TikTok when it comes to livestreams using Twitter Spaces. Maybe the platform analyzes content after the recording is available, similar to how they do (or did pre-Elon at least) with tweets? From what I can tell, Twitter certainly doesn’t have anything as robust as other platforms to ensure proper analyzing and tagging of pre-existing works that are used in content users share during a livestream.
Platform Licenses. The licenses on specific platforms, such as the music libraries that YouTube, Facebook/Instagram, and TikTok offer are slightly different than if a livestream includes copyrighted content. Usually, the music library licenses cover when users incorporate pre-clearer music tracks into their (non-commercial) content before posting. Most livestream content is analyzed live (on YouTube and Twitch at least) or after it is posted, and may get covered by license deals a platform has secured with the record labels and music publishers, and gets them paid their royalty for that use. But, it’s hard for users to know exactly what content a platform has actually secured deals for without a searchable database. YouTube used to offer creators a database we could search to find out if a track is cleared for both the original recording and the underlying publishing. It would even tell which territories globally may be blocked if using a track. But, they did away with that tool a few years ago when they launched the new Creator Studio.
Also, platforms can take advantage of DMCA safe harbor protections, provided they follow all of the statutory requirements and maintain a compliant program supporting those requirements.
Fair Use. Does a fair use defense come into play if the livestream is news or parody related? As any lawyer would say… it depends. A fair use argument that the use of a song should have been permitted due to its newsworthiness may work if it’s relevant to the news story. However, it likely wouldn’t cover the use of an entire song. I also don’t see how parody would work, but maybe if there was sufficient commentary or other sufficient support under a fair use analysis (that fun four factor test). Most uses of music in livestreams that I’ve seen is done for vibe setting, not truly necessary to the news or parody situation.
Additionally, I wouldn’t advise creators to rely on fair use because it involves defending or disputing ACR claims. I let them know they potentially put their livestream or channel/account at risk.
Copyright Alliance and VLAs to Co-Host CCB Panel titled ‘The Copyright Claims Board—What We Know So Far’
On February 1 at 1 p.m. ET, the Copyright Alliance—in partnership with 15 Volunteer Lawyers for the Arts (VLA) organizations across the U.S.—will host a webinar on the Copyright Claims Board (CCB), titled The Copyright Claims Board—What We Know About the CCB Thus Far. The panelists will take an in-depth look at how things are working with the CCB seven months after its launch by the U.S. Copyright Office. Speakers include Maya Burchette, Attorney-Advisor for the CCB; Thomas Maddrey, Chief Legal Officer & Head of National Content and Education for the American Society of Media Photographers (ASMP); and Terrica Carrington, Vice President of Legal Policy and Copyright Counsel at the Copyright Alliance. The panel, which will be moderated by Keith Kupferschmid, CEO of the Copyright Alliance, is a must-attend event for anyone who has an interest in the CCB. For additional information and to register, please click here.
Janelle Monáe is a shining star in Glass Onion, the newest film from Rian Johnson that’s building on out the world of detective Benoit Blanc from the Knives Out film. I had the chance to revisit one of my favorite OG songs from Janelle Monáe and encourage you to check it out, too!
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No Legal Advice. This newsletter is published solely for educational and entertainment value. Nothing in this newsletter should be considered legal advice. If you need legal assistance or have specific questions, you should consult a licensed attorney in your jurisdiction. I am not your attorney. Do not share any information in the comments you should keep confidential.
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