other appropriate remedy] is in fact likely on any kind of—any kind of significant scaleduring the next three-year period?”
Parties seeking Digital Millennium Copyright Act (DMCA) exemptions need onlyshow that the Act’s prohibitions have or are likely to have a substantial adverse effect onnon-infringing uses of a class of works. Mr. Soghoian’s response to this question at thehearing, and the arguments in our original request, fully meet this requirement. In histestimony, Mr. Soghoian pointed to a strong-likelihood of such consumer harm based onthe current state of the economy and the fact that over the last several years, variousmedia companies have shut-down their authentication servers with increasing regularityand have only been inclined to provide, reluctantly, remedies for customers after considerable public and media outcry.Specifically, Mr. Soghoian pointed to the fact that after Wal-Mart announced thatit intended to shutdown its authentication servers in September 2008, the outcry fromconsumers was so strong that the company ended up retracting its statement and saying itwould continue to support the servers indefinitely. As Mr. Soghoian remarked at thehearing, however, Wal-Mart “clearly has no intention to run that server forever, so atsome point they are going to turn it off.”
That point in time has now come. Just three weeks after the hearing, on June 1,2009, Wal-Mart announced that it will shut-down the authentication servers supportingthe DRM protected music purchased by its customers on October 9, 2009.
Wal-Mart isnot providing its customers with a refund or any other remedy, but rather has suggestedthat its customers should make do with burning their music to CDs. As our originalexemption request to the Copyright Office noted at length, this is an inferior solution thatwill permanently reduce the audio quality of the products legally purchased by Wal-Mart’s customers, and to which the customers should be entitled to have full andcontinuing access.Wal-Mart’s latest actions provide ample documentation that the issue of DRMabandonware is not a hypothetical concern and that the market cannot be counted on to provide consumers with an adequate remedy. Instead, so long as the ability tocircumvent the DRM on lawfully acquired music is barred by the DMCA, consumers willsuffer direct and substantial adverse effects. The recent Wal-Mart news alsodemonstrates quite clearly that, even in those instances where companies might initially promise to continue to run their authentication servers in response to consumer backlash,the hand that giveth can (and will) later taketh away. Without these exemptions,consumers will be harmed.
Transcript of §1201 Rulemaking Hearing before the United States Copyright Office at53:19-22 (May 6, 2009).
Transcript of §1201 Rulemaking Hearing at 53:2-4 (May 6, 2009).
Walmart to End Support for DRM-Wrapped Songs in October
, DigitalMedia Wir
(June 1, 2009)