Tricky, tricky. Napster announced Wednesday that it will, indeed, comply with Metallica's legal demands that the music-swapping software company block over 300,000 of its users the band says were trading pirated Metallica tunes. But there's a little catch that Metallica probably didn't expect.
Under the terms of the Digital Millennium Copyright Act, if an Internet service provider receives a complaint about a user who is allegedly violating a copyright, the ISP is supposed to immediately remove that user from its service. But if that user thinks he has been misidentified and submits a legal counternotification, then the copyright holder has 10 days to decide whether to take legal action. If the copyright holder doesn't initiate legal action against the user, the ISP must reinstate the user.
Now, Napster, identifying with the ISPs, is using this law to force Metallica to take up its piracy concerns with individual Napster users. On a page on its Web site, Napster explains this. "The Napster software will direct all users barred as a result of Metallica's allegations to an infringement notification page. That page explains the notice that Metallica has given us, explains who Metallica has stated to us it intends to block, and gives the user an opportunity to submit a counter notification if the user has been misidentified. If the user has been misidentified, and requests to be reinstated by submitting a counter notification under penalty of perjury, then, unless Metallica chooses to pursue legal action against that user within 10 working days of being notified of that user's counter notification, the user is entitled to be reinstated."
In other words, Metallica had better prepare itself for an onslaught of legal notices from angry Napster fans who feel that they have been misidentified or otherwise unjustly served. Will Metallica and its attorneys have the time and interest to pursue legal action against even a few hundred (let alone 300,000) fans who might counterfile? The odds are slim -- even if those fans were, indeed, violating copyrights. What a potentially awful mess.
But even as Metallica, other artists and the Recording Industry Association of America turn to the legal system to stop music fans from swapping pirated tunes online, the courts may soon invite the recording industry in for a visit on another topic: artificially inflating CD prices.
According to the Wall Street Journal, on Thursday the Federal Trade Commission is expected to announce a formal complaint against the record industry for artificially inflating CD prices. Fans have been complaining about this for years -- it is, in fact, one of the main arguments of the more ideologically driven MP3 traders, who claim that they are justified in downloading those free Metallica tunes because the cost of the CD is so unjustly astronomical ($16 for most CDs, as opposed to a production cost of mere cents).
Well, it turns out that those fans weren't just mouthing off. The FTC's charge -- which is expected to be announced with a simultaneous settlement -- targets the way record companies force retail outlets to keep prices high by denying "cooperative advertising" benefits to record merchants who advertise discounts. Retailers can rake in tens of thousands of dollars in "cooperative advertising" from record labels -- but if they dare advertise store sales that undercut the minimum prices set by the record label, the labels deny the outlets that money. Surprise! No one drops their prices, and the high prices set by the record labels remain the standard.
The FTC suit could potentially lower CD prices for all consumers. Perhaps then those Metallica fans won't feel so justified in downloading free copyrighted tunes; at the least, they'll have a bit more pocket change to buy an extra CD or two. Who can complain about that?