Creator Economy Law – Issue #18

Franklin Graves

UK halts broad AI copyright exception, New digital economy taxes, Social media brand usage guide, Copyright infringement settlement checklist, + 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.

Winter is coming… for Netflix moochers! Internet sleuths have spotted an update to the Netflix FAQs page that details what subscribers (and their non-subscribing friends and family) can expect. Where will this leave you? Are you a subscriber? Or, did you wrangle someone’s password?

It’s also the start of Black History Month. As Google’s Chief Diversity Officer Melonie Parker writes, “It’s a time we dedicate to reflect on the achievements of African Americans and to celebrate Black culture in all its forms.” I look forward to spending this month listening/reading, learning, reflecting, and celebrating!

Here’s what’s been happening in the world of Creator Economy Law.

What You Should Know

UK halts potential expansion of TDM exception to copyright for training AI

Two videos tweeted by Sarah Olney, Liberal Democrat MP for Richmond Park, on February 1st (1:42pm ET) detail her debate in support of creators and the creative industries against a previously proposed broad, all-out exception to copyright for text and data mining (TDM) activities.

Olney argued the broad TDM exceptions “would see a huge transfer of value from individual creatives to tech companies and strip creatives of the opportunity to refuse or grant permission for the use of their work by AI companies, placing thousands of jobs within the creative sector under threat.”

In a second tweet in the thread, she confirms the hold, writing: “I am extremely pleased to say that in response, the Minister confirmed to me that these plans will be halted, pending further consultation. This is a huge win for millions employed in creative spaces across the UK, and I look forward to seeing the updated proposals.”

If you recall back in June 2022, the Intellectual Property Office UK released its response to the recent request for evidence and views on a range of options on how AI should be dealt with in the patent and copyright systems. Part of that included a focus on “text and data mining,” where the plan was to “introduce a new copyright and database exception which allows TDM for any purpose.” They add that “Rights holders will still have safeguards to protect their content, including a requirement for lawful access.” However, the proposed path forward was to adopt an exception for “any purpose” and without the right to opt-out.

Currently, there remains a research exception to copyright for data mining in the UK.

Digital economy tax coming to a state near you

Bloomberg Law published insights into four states (Connecticut, Indiana, Massachusetts, and New York) that have started the process, or have already, introduced bills that would bring new taxes on the digital economy, including digital advertising, social media, shopping, and data mining. Often, these types of laws face challenges in court after becoming enacted.

“Proposals similar to these latest New York and Massachusetts bills have been rejected by the respective legislatures in prior sessions,” as noted by Charlie Kearns & Samantha Trencs of Eversheds Sutherland (US) LLP in a recent blog post that provides a detailed recap for some of the legislation.

📖 Read: 

🗣 Franklin’s Take: If you recall, local governments were rolling out “amusement taxes” to target subscription streaming services like Netflix, as early as 2015. Chicago’s went as high as 9% and was challenged in court by Apple, yet in 2018 was dismissed following a private settlement.

From a business standpoint, state-level, or local government-level, tax regulations, and codes present headaches for tech platforms. Larger companies, such as the Googles, Apples, and Amazons of the world, will likely have the existing tax and legal infrastructure to ensure compliance across jurisdictions. However, absent the bills accounting for minimum revenue thresholds before requiring compliance, smaller platforms or even creator-owned and operated platforms may face significant compliance issues as their communities grow and their customer base expands into jurisdictions that have these kinds of tax rules.

Additionally, it’s important for creator businesses to understand what, if any, tax liability is passed on to them from a platform. It’s not uncommon for parties to a contract to attempt and pass off tax liabilities to the other party, especially if the contracts aren’t negotiated (such as click-through terms).

GoodRx under fire from FTC for sharing data with Meta and Google

In the first case under the FTC’s Health Breach Notification Rule, GoodRx is in trouble for violating user privacy for failing to notify consumers and others of its unauthorized disclosures of consumers’ personal health information to Facebook, Google, and other companies.

The FTC has issued a proposed order, filed by the Department of Justice on behalf of the FTC, in which GoodRx will be prohibited from sharing user health data with applicable third parties for advertising purposes, and has agreed to pay a $1.5 million civil penalty for violating the rule. The proposed order must be approved by the federal court to go into effect.

California-based GoodRx operates a digital health platform that offers prescription drug discounts, telehealth visits, and other health services. The company collects personal and health information about its users, including information from users themselves and from pharmacy benefit managers confirming when a consumer purchases a medication using a GoodRx coupon. Since January 2017, more than 55 million consumers have visited or used GoodRx’s website or mobile apps.

📖 Read: 

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Learn With Me

Creator Economy Law LIVE!

Let’s meet IRL!! 🔥 Join me at #IPLSPRING!

Registration is now open for the 2023 ABA-IPL Section Annual Meeting. Plus, you’ll get a chance to come to the panel I’m moderating on #CreatorEconomy Law 🎉

Have questions? Drop them in the comments!

Music Video of the Week

I believe this week’s video speaks for itself. I’ll let Childish take it from here…

Watch on YouTube or Apple Music.

[Note: This week’s selection is NSFW and Explicit]

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!

Not 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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