Music Industry Blasts WTO Award to Antigua for US Online Gambling Stance

A prominent music industry publication has condemned last week's World Trade Organization (WTO) decision to award the tiny Caribbean nation of Antigua $21 million a year in retaliatory measures permitting Antigua to pirate American goods and services such as films, software and music until the U.S. government becomes compliant with WTO rulings by either permitting Americans to gamble on foreign operators' sites or eliminating U.S. exceptions such as remote betting on horse and dog racing over the Internet.

Music2dot0.com published the article entitled, "WTO Legalizes Music Piracy in Antigua" over the weekend that criticizes "a rather bizarre situation that seems to expose the duplicity exhibited by the US, which does not waste any opportunities to evangelize and impose its holier-than-thou moral views on gambling and music, film and software piracy upon other countries often for the purposes of simply aiming to protect its own trade interests spurred on by powerful internal US lobby groups" (click here for entire article).

After giving a detailed summary of events leading to the WTO decision to award Antigua the right to essentially pirate American films, music and software for compensation for the US pulling online gambling out of its trade agreements, the Music 2.0 article makes several insightful concise observations on the effects of the award, which are reproduced here in their entirety:

"Legalized piracy

It sounds like a contradiction in terms but there we have it, the tiny Caribbean nation of Antigua is now allowed the right to distribute music, movies and software produced in the US without obligations to pay US rights holders. As Antigua has now been given carte blanche to distribute music as such, this has major implications globally in that companies registered in Antigua, can distribute US copyrighted music for free or for their own profit and would be to some measure, operating legally based on this latest WTO ruling.

Free Music, Movies, Software

As a result of the US wanting to protect the billions of dollars in local gambling interests above all, we now have a situation where the WTO has officially deemed it fair game for US musicians' (and film and software producers') products to be distributed and consumed by Antiguan businesses without any recourse to revenue. Musicians are certainly going to be thrilled that their own government has allowed a situation to arise where they are just a mere pawn in the game resulting in the fruits of their labor being given away for free to a foreign government.

Morality & the Political Economy of Intellectual Property

There does not seem to be any more morality in the rights or wrongs of gambling or movie, music or software piracy. The next time the IFPI, RIAA or some other self-serving organization spouts the morality bullshit, let's examine further to see who's paying them and what is the bigger business agenda at play. The exercising of copyright or gambling restriction laws are usually accompanied by rhetoric about compensating the creators of original content or protecting public morals respectively but if one looks closely, we will find that legal actions and public policies are often enacted and lobbied for by large corporations, in order to preserve their own profitability.

Schoolyard Bully

The United States Trade Representative Sean Spicer warned Antigua from proceeding with "acts of piracy, counterfeiting or violations of intellectual property rights" while they try and negotiate further. Ominously, he warned that continuing with any such planned actions would "undermine Antigua's claimed intentions of becoming a leader in legitimate electronic commerce, and would severely discourage foreign investment" in Antigua. With the US wielding undue power with regards to financial services critical to global e-commerce like Visa and Mastercard, and not being hesitant to withhold these essential global services from not only Antigua but as we have seen in the past, renegade Russian music site Allofmp3.com also, we have to ask ourselves if the US should continue to be allowed to be in a position to use these essential services as a means to browbeat those that don't comply with its wishes and own laws. (As a point of contention, the local Russian courts subsequently deemed Visa's and Mastercard's withdrawal of service to be based on areas of law not within their jurisdiction and hence illegal)

False Valuation Tactics

Notwithstanding the Americans' might to strong-arm its companies into witholding services from Antiguan related enterprises, lawyers state that it will still prove difficult for Antigua to execute this ruling. As reported in New York Times, Brendan McGivern, a trade lawyer with White & Case in Geneva pointed out,

"Even if Antigua goes ahead with an act of piracy or the refusal to allow the registration of a trademark, the question still remains of how much that act is worth. The Antiguans could say that’s worth $50,000, and then the U.S. might say that’s worth $5 million. The U.S. is going to dog them on every step of the way."

As proof of this in action, we have seen how the RIAA has constantly inflated the valuation of damages to its member companies in previous litigation efforts against consumers. But I can't help but also note that how when it suits its purpose, the US sought to place a grossly reduced valuation of a measly $500,000 in damages to Antigua for the US cross-border gambling ban.

China

The US continues to complain to WTO about China and even goes to the extent of almost interfering with China’s internal laws in its effort to obtain greater control of music, movie and software distribution in China while seeking to reduce the levels of piracy of US content that exists in the country. However, it will be rich irony if the US itself sees it fit to ignore this recent WTO ruling allowing Antigua (and offshore companies from all over the world registered there) to legally pirate US music, but then use this very same body to seek sanctions against China on charges of piracy of US copyrighted products. As Lode Van Den Hende, an international trade lawyer with the firm of Herbert Smith in Brussels put it,

"The U.S. is not behaving as one would expect. One day they're out there saying how scandalous it is that China doesn't respect W.T.O. decisions, but then the next day there's a dispute that doesn't go their way and their attitude is: The decision is completely wrong, these judges don't know what they're doing, why should we comply?"

With this latest ruling, Antigua has now set a precedent for other countries to sue the United States for unfair trade practices, and in retaliation be within its rights to withdraw its recognition of US intellectual property rights.

It will certainly be interesting to observe the next roll of the dice.

Update:

As reported by CasinoGamblingWeb.com, in a conference call on Friday the successful lawyer for Antigua, Mark Mendel pointed out that "Antigua cannot be vilified by the United States government as criminals as they will not actually be breaking copyright and piracy laws". He insisted that "Antigua was not aiming for this judgement, rather, they simply would like for the US to follow the rules of the WTO by allowing Antiguan gaming operators to offer horse race betting to Americans, just as American gaming operators are currently allowed to do. Until they do meet the legalities of the WTO rulings it will be legal to sell copyrighted materials."

Although the online gambling industry would see the $21 million per year limitation as a setback, Mendel highlighted that for a start as of now, they can cumulatively add the amount for 2006 combined with that for 2007, and the sanctioned amount will add up to hundreds of millions of dollars after a few years. More worryingly for the US music industry, as this will also include the right to distribute digital music and as anyone who deals in this will be only too aware, there is no reliable recourse to monitor revenues, and for all practical purposes it seems that Antigua is basically getting an unlimited free pass to gorge themselves silly on US copyrighted and trademarked products."

Read Related Articles: