Creator Economy Law – Issue #14

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.

What You Should Know

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.”

📖 Read:

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.

📖 Read:

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.

📖 Read:

🗣 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.

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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.

Music Video of the Week

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!

Watch on YouTube or Apple Music.

Editor's Notes

Affiliate Links. As an Amazon Associate, I earn from qualifying purchases. I have noted above where links to products on Amazon may earn me a commission if you make a purchase. Thanks for supporting my work!

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.

Personal Opinions. The opinions and thoughts shared in this newsletter are my own, and not those of my employer or any of the third parties mentioned or linked to in this newsletter. No affiliation or endorsement is implied or otherwise intended with third parties that are referenced or linked.

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