Straight bananas notwithstanding, sometimes Eurocrats do make the right decisions.
Two excellent examples have emerged this week: the ruling by the EU Court of Justice that if you buy software, you own it and the decision by the European Parliament to reject the Anti-Counterfeiting Trade Agreement (Acta).
The first of these may sound a little like a statement of the bleedin’ obvious, and to that extent the court has clearly made the correct decision.
But some software vendors would disagree, and that’s why this case came to court.
There’s a general principle in commercial law that a seller can’t stop the buyer reselling something they have bought. It has different names in different places, and is worded differently in different sets of laws, but in essence it always means the same thing: If you sell something to someone, then you can’t control what they do with it afterwards. If they no longer want it they can resell it to someone else or give it away, and you can’t stop them doing so.
It’s fairly obvious how this principle applies to cars, clothes, books and CDs. But it isn’t so clear how it applies to software. Generally, when you buy a computer program, you are not buying the software itself, you are simply buying the right to use it – what’s called an “End User License”. And software vendors have argued that a licence can contain terms and conditions preventing it from being resold.
The actual ruling is complicated, but essentially the court has decided that such a restriction is invalid. More importantly, the court has decided that the restriction is invalid even if you downloaded the software rather than buying it on CD or DVD. It had previously been determined that if you buy software on a CD, you can resell the CD. Now the court has decided that if you download something, you can resell the download if you no longer need the software.
There is an important caveat: If you sell software, you have to completely disable it on your own system before doing so. Otherwise, you’re not just selling it, you’re copying it, and that’s an infringement of copyright. That, however, is no more than has always applied to digital material.
For the domestic user this isn’t hugely relevent, since most of us don’t buy or sell second-had software anyway. But it has significant implications for businesses.
Anything you own, and can sell, is an asset. And the bottom line of any business – whther it is solvent or not – is affected by the value of its assets. If a business buys a van, or an office building, then the resale value of the van or building is included in the value of the business. If software can’t be resold, then it isn’t an asset, and can’t contribute to the value of the cmpany. But if it can be sold, then it is an asset and hence counts towards the bottom line. From an accounting point of view, as well as a practical one, this is a very important ruling.
By contrast, the decision by the European parliament to reject the Anti-Counterfeiting Trade Agreement will have direct ramifications for ordinary Internet users.
Acta is an international agreement intended to combat online counterfeiting and copyright infringement, and had previously been signed by many governments including the UK. But its rejection by the EU Parliament means that it cannot now be applied in any EU member country. This is most definitely a good thing.
So, what was wrong with Acta? What’s wrong with trying to prevent counterfeiting and copyright infringement?
There’s nothing wrong with either per se, at least not if you accept that there’s a valid case for having copyright in the first place. The problem with Acta is that its proposals for tackling counterfeiting and infringement were badly worded, unnecessarily extensive and anti-consumer.
Anti-counterfeiting measures are, at least in theory, intended to protect consumers. They help ensure that the designer label branded polo shirt that you buy really was made by the label’s own suppliers in a Chinese sweatshop, rather than a dodgy factory in the East End of London staffed by illegal immigrants. Or possibly the other way round, who knows. And they also protect suppliers by helping to minimise the risk that other people will make money by fraudulently pretending to be them. That’s good, and nobody is arguing against that.
What Acta does, though, is take sensible proposals and apply them too broadly. So, for example, the right of customs inspectors to open a truck load of mobile phones and check their provenance also extends to the right to check your iPod as you cross the border and see if it contains any copyright-infringing copies of songs. Proposals which would allow websites selling fake medicines to be closed down would also allow the forced closure of a site where someone has posted an unauthorised copy of a newspaper article.
Of course, the backers of Acta would say that that’s absurd: just because the wording allows it doesn’t mean such powers would actually be used. Do we really think that people will be arrested as they arrive at Gatwick because they have an mp3 player full of hookey songs? But then, similar arguments were probably made when the current UK/US extradition treaty was signed, and yet that is being used for cases which are within the letter of the law but a long way outside its spirit. Just ask Richard O’Dwyer.
In any case, Acta ignores the fact that there is a huge difference between counterfeiting and copyright infringement. People can die as a result of taking fake medicines. A fake Gucci handbag won’t kill you, but the seller can rip you off. And if people unwittingly buy fakes instead of the real thing, then the legitimate seller has lost out.
By contrast, nobody was ever harmed, either physically or financially, by downloading some songs or movies without paying. Nor is there any plausible evidence that filesharing itself is a significant cause of harm to the suppliers – by contrast, most studies show that filesharing is predominantly used as a “try before you buy” system or in response to the failure of suppliers to make their products available in a suitable format.
Public opposition to Acta has been based around these objections, and it’s been vocal enough and widespread enough that legislators at the European Parliament have taken notice. That’s actually one of the good things about the EU; no single party (or country) has an absolute majority in parliament so unpopular proposals can’t simply be whipped through.
So what’s the future for Acta? Well, it would be nice if those responsible for it could go away and renegotiate a treaty that takes account of public opinion. A treaty that’s aimed solely at commercial counterfeiting, and doesn’t attempt to criminalise ordinary members of the public who may simply disagree with the business model of the record labels and movie studios, would be mostly uncontroversial. The question is whether the negotiators themselves have the backbone to stand up to the vested interests of the copyright cartel.