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O’Bannon Cam: How “Zion Cam” Provides Ammo for The Student Athlete Equity Act in The Fight to Pay College Athletes

By: Mariah Bayless-Davis

In 2015, O’Bannon v. NCAA challenged whether or not NCAA’s rule that prohibits student-athletes from being compensated for the use of their names, images, and likenesses was an unlawful restraint of trade.[1] The idea of paying student-athletes has always been entertained, that is until O’Bannon became a landmark case and set the precedent in the fight to pay student-athletes. After seeing his likeness being used without consent in a popular college basketball game, Ed O’Bannon sued NCAA and the Collegiate Licensing Company, which is the company that licenses the trademarks owned by NCAA.[2] He was joined by other college athletes in his argument that upon graduation, a former student athlete should come entitled to financial compensation for future commercial use of his/her image by the NCAA.[3] This would directly affect both O’Bannon and his co-plaintiff, Sam Keller, as their likenesses were used by Electronic Arts (EA) in popular video games.[4] The Circuit Court did rule that NCAA regulations were an unlawful restraint of trade as they prohibited “every contract, combination…or conspiracy, in restraint of trade of commerce.”[5] However, the only alternative the court recommended for this unlawful restraint of trade was to allow NCAA members to give scholarships up to the full cost of attendance.[6] Although talks of paying student athletes were going on well before O’Bannon and have continued after, March Madness and events surrounding the tournament have magnified the issue.

For the first year in tournament history, Turner Sports and CBS have partnered to produce and broadcast all of the March Madness basketball games.[7] In past years, the tournament only partnered with Turner Sports for broadcasting rights, which brought in upwards of $817 million in 2017 alone.[8] Sadly, but unexpected, the college athletes playing in those games saw none of that money. The conversation concerning O’Bannon and college athletes getting paid for their likeness came up again when CBS unveiled the “Zion Cam.”[9] The camera is exactly what it sounds like: a camera dedicated exclusively to the face of college basketball, Zion Williamson. CBS hired an additional “cameraman, camera, and digital tape machine to record everything [Zion does]” in an attempt to cash in on the viewership Zion brings.[10] The “Zion Cam” would not only track Zion’s every move during the game, but also during warm ups to track his every move using the digital tape technology.[11] The type of footage and data CBS is collecting on Zion Williamson, a college athlete, calls into another issue. If this footage and data is being monetized, who is getting paid if not the athlete? Zion Cam not only gives viewers a play by play of Zion’s every move during March Madness but a closer look at the exploitative nature of the NCAA.

At this point in his short college career, Zion Williamson is a household name. Events earlier in the season served as inspiration for the Student-Athlete Equity Act, introduced by U.S. Representative Mark Walker.[12] The act calls for the amendment of Internal Revenue Code of 1986 to “prohibit qualified amateur sports organizations from prohibiting or substantially restricting the use of an athlete’s name, image, of likeness, and for other purposes.”[13] With Zion Williamson not only being the face of college basketball, but also the face of the NCAA, this act has a lot of support behind it.

 

[1]See O’Bannon v. NCAA, 802 F.3d 1049, 1052 (2015).

[2]Id. at 1055.

[3]Id. at 1059.

[4]See O’Bannon, supra note 1.

[5]O’Bannon, 802 F.3d at 1083.

[6]See id.

[7]See Tyler Lauletta, CBS Hired a Special Cameraman to Work the “Zion Cam” and Record Every Move the Duke Star Makes in His NCAA Tournament Run, Business Insider (Mar. 22, 2019), https://www.businessinsider.com/zion-williamson-cbs-cam-march-madness-2019-3.

[8]See Alex Kirshner, Here’s How the NCAA Generated a Billion Dollars in 2017, SB Nation (Mar. 8, 2018), https://www.sbnation.com/2018/3/8/17092300/ncaa-revenues-financial-statement-2017.

[9]See Lauletta, supra note 7.

[10]Id.

[11]See Sean Keeley, What, Exactly, is CBS Hoping to Capture with the Zion Cam Footage Anyway?(Mar. 22, 2019), https://awfulannouncing.com/ncaa/what-exactly-is-cbs-hoping-to-capture-with-the-zion-cam-footage-anyway.html.

[12]Student Athlete Equity Act of 2019, H.R., 116thCong. (2019).

[13]Id.

Image source: https://www.outsiderclub.com/a-quick-guide-to-march-madness-money-flows/81612

The First Thing We Do, Let’s Block All the Lawyers: The Expanding Liability of Social Media Sites

By: Brandon Larrabee

With all due respect to a congressman’s efforts to get a Twitter cow to stop making fun of him[1], the most important social media legal action of the last few weeks had little to do with the actual contents of posts on the sites and more to do with housing law.

On March 29, the U.S. Department of Housing and Urban Development filed an administrative action saying that Facebook violated fair-housing laws through the targeting of ads on the social media giant’s site.[2] That followed Facebook’s settling a group of complaints accusing the company of parceling out ads on a variety of discriminatory grounds.[3] In addition to housing, for example, the company faced allegations that it facilitated showing some job advertisements to men instead of women.[4] That led to the company announcing new policies on ad targeting, including restrictions on targeting for particular types of advertisements:

Advertisers offering housing, employment and credit opportunities will have a much smaller set of targeting categories to use in their campaigns overall. Multicultural affinity targeting will continue to be unavailable for these ads. Additionally, any detailed targeting option describing or appearing to relate to protected classes will also be unavailable.[5]

Those actions are just the latest in what seems like an onslaught of legal maneuvers probing what, exactly, Facebook and sites like it can and cannot do under the nation’s existing laws. It is also highlighting the heightened legal exposure that Facebook, Twitter, and their industry-mates could face as they become ever more integral to American life.

For example, the D.C. attorney general hit Facebook with a lawsuit over the Cambridge Analytica controversy.[6] That is not the only election-related issue facing Facebook; along with Google, the company recently paid fines over violations of Washington rules concerning campaign advertising.[7]

Twitter’s legal teams have been working to swat away lawsuits alleging it was materially supporting terrorism because groups like ISIS use the site, though those attempts have been unsuccessful so far.[8] Snapchat has battled claims that one of its filters might prompt drivers to speed.[9]

That is in addition to more widely reported issues like whether social media sites are dumping certain users for their viewpoints[10] and gobbling up users’ data despite Europe’s new privacy law.[11]

Some of this is to be expected. Back when Facebook and Twitter were simply ways to keep friends updated on life events or wry observations, social media was little more than a diversion. But now we use these sites in a variety of ways, like making recommendations[12] and buying and selling goods.[13] That brings the social media sites face(book) to face(book) with some of the same legal issues that more traditional businesses have been navigating for years.

It has also prompted some to push for a new way of regulating the companies. K. Sabeel Rahman has called for treating some tech companies like utilities, given “how the information economy has enabled private control over new online platforms increasingly vital to economic and social functioning.”[14] Whatever the label, with an ever-growing list of legal challenges, some form of regulation might become more palatable to social media companies if they keep racking up the billable hours.

 

[1]SeeDaniel Victor, Devin Nunes Sues Twitter for Allowing Accounts to Insult Him, N.Y. Times(Mar. 19, 2019), https://www.nytimes.com/2019/03/19/us/politics/devin-nunes-twitter-lawsuit.html.

[2]SeeSara Salinas, Trump Administration Charges Facebook with ‘Discriminatory’ Housing Advertising Practices, CNBC (Mar. 29, 2019), https://www.cnbc.com/2019/03/28/trump-administration-sues-facebook-over-discriminatory-advertising-practices.html.

[3]SeeLarry McShane, Red-Facebooked! Social Networking Company Settles Five Lawsuits, Pays $5M over Alleged Discrimination,N.Y. Daily News(Mar. 19, 2019 5:35 PM), https://www.nydailynews.com/news/national/ny-facebook-lawsuit-settlements-20190319-47hocolaazbqnots6n66hi5ppi-story.html.

[4]SeeAlexandria Fernández Campbell, Facebook Allowed Companies to Post Job Ads Only Men Could See. Now That’s Changing, Vox(Mar. 21, 2019 4:20 PM), https://www.vox.com/2019/3/21/18275746/facebook-settles-ad-discrimination-lawsuits.

[5]Sheryl Sanderg, Doing More to Protect Against Discrimination in Housing, Employment and Credit Advertising, Facebook: Newsroom(Mar. 19, 2019), https://newsroom.fb.com/news/2019/03/protecting-against-discrimination-in-ads/.

[6]SeeTony Romm, Brian Fung, Aaron C. Davis & Craig Timberg, ‘It’s About Time’: Facebook Faces First Lawsuit from U.S. Regulators After Cambridge Analytica Scandal, Wash. Post(Dec. 19, 2018), https://www.washingtonpost.com/technology/2018/12/19/dc-attorney-general-sues-facebook-over-alleged-privacy-violations-cambridge-analytica-scandal/?utm_term=.8f41a5a028f3.

[7]SeeEli Sanders, Facebook and Google Pay $455K to Settle Political Ad Lawsuits in Washington State, The Stranger: Slog(Dec. 18, 2018 12:04 PM), https://www.thestranger.com/slog/2018/12/18/37206156/facebook-and-google-pay-nearly-450000-to-settle-political-ad-lawsuits-in-washington-state.

[8]See, e.g., Fields v. Twitter, Inc., 881 F.3d 739 (9th Cir. 2018); Crosby v. Twitter, Inc., 303 F. Supp. 3d 564 (E.D. Mich. 2018).

[9]SeeEugene Volokh, Lawsuit Against Snapchat Encouraging Speeding Can Proceed, Reason: Volokh Conspiracy(June 6, 2018 8:17 PM), https://reason.com/volokh/2018/06/06/lawsuit-against-snapchat-encouraging-spe.

[10]SeeRobert Burnson, Twitter Beats Censorship Lawsuit by Banned White Nationalist, Bloomberg(Aug. 23, 2018 10:07 PM), https://www.bloomberg.com/news/articles/2018-08-24/twitter-beats-censorship-lawsuit-by-banned-white-advocate.

[11]SeeRussell Brandom, Facebook and Google Hit with $8.8 Billion in Lawsuits on Day One of GDPR, The Verge(May 25, 2018 10:21 AM), https://www.theverge.com/2018/5/25/17393766/facebook-google-gdpr-lawsuit-max-schrems-europe.

[12]See Establish Your Reputation with Recommendations, Facebook: Business, https://www.facebook.com/business/recommendations.

[13]SeeFacebook Marketplace, https://www.facebook.com/marketplace/.

[14]K. Sabeel Rahman, The New Utilities: Private Power, Social Infrastructure, and the Revival of the Public Utility Concept, 39 Cardozo L. Rev.1621, 1668–69 (2018).

Who is Regulating Speech on Facebook?

By: Catherine Schroeder

Webinars, Community and Engagement: 5 Reasons to Integrate Live, Online Events Into Your Online Community

In the wake of the terrorist attack at two New Zealand mosques last Friday, the world again had to grapple with the role social media and the internet plays in these horrific events. The event that cost 50 lives on Friday, March 15th was broadcasted live through Facebook and then posted repeatedly over the internet.[1] After New Zealand police flagged the video, Facebook hastily deleted the video; however, Facebook, as well as YouTube and Twitter, struggled to combat the repeated loading and sharing of the video and were still working on removing the video and images over the weekend.[2] Facebook stated that within the first 24 hours after the attack, it removed or blocked 1.5 million copies of the video from its site.[3] Facebook was able to block 80% of these videos while they were being uploaded.[4] YouTube took down tens of thousands of versions of the video.[5]

Facebook, YouTube, and Twitter have come under scrutiny numerous times in recent years for not removing hate speech or terrorist propaganda fast enough.[6] Outside of responding to backlash from these events, Facebook has had community standards for its users for years and is constantly monitoring activity on its website.[7] Facebook has made changes directly in response to this public pressure, such as releasing details of its content review policy this past year in an effort to “do better.”[8] When witnessing how these global corporations have responded to public outcry, the question comes to mind – what force is actually making the companies remove this kind of content? While there are many factors that push these social media corporations to do the “right thing,” in the United States, there are actually no regulations or laws that make Facebook or other social media providers remove speech like violent videos or hate speech.[9]

Facebook, YouTube, and Twitter are self-regulating in the area of governing speech.[10] They are given this freedom in the United States through § 230 of the Communications Decency Act which grants interactive community services immunity from liability for user-generated content.[11] Courts have interpreted § 230 as having two main purposes: 1) to foster Good Samaritan policies for self-policing within these services and 2) to protect free speech for users.[12] The Good Samaritan provision in § 230 sought for these companies to reflect normative expectations of users.[13] Furthermore, for the government to regulate what speech is published, there is a fear of collateral censorship.[14] Too much regulation could also potentially severely restrict speech which would stifle the exchange of ideas on these platforms and have a “chilling effect.”[15]

With a lack of regulations, Facebook, YouTube and Twitter are the “architects” for publishing new speech online.[16] So the question still stands – what force drives them to censure? These social media corporations are, in fact, corporations. They are driven by a sense of corporate responsibility and meeting the users’ expectations in order to increase shareholder value and economic viability.[17] However, whether because of corporate responsibility or economic success, the leading social media services’ values and speech policies have reflected First Amendment norms and United States democratic culture.[18] The community standards and internal policies of Facebook, Twitter, and YouTube were all drafted, analyzed, and created by American lawyers.[19] These platforms have even pushed back against government requests to remove content.[20] In 2012, a video was uploaded to YouTube that negatively depicted the Muslim faith.[21] Violence erupted in countries such as Libya and Egypt, and President Obama asked YouTube and Facebook to take down the video.[22] This video fell outside both companies community standards; and they ultimately decided not to take the video down, a decision that was rooted in American free speech norms being implemented by these corporations.

While these social media providers are generally self-regulated, individual countries can control what is posted within their boundaries and flex some muscle. In 2007, Turkey blocked access to YouTube throughout Turkey when YouTube did not remove videos that Turkey had demanded to be removed.[23] Recently in 2016, in response to terrorist attacks in both Paris and Brussels, Facebook, YouTube, Twitter, and Microsoft entered an agreement with the European Union to remove hate speech within twenty-four hours of it posting.[24] This is a reflection of these companies not censuring because of corporate responsibility or user pressure, but to avoid regulations and fines by countries.[25] This is a shift in the First Amendment norms that were a foundation for these companies’ policies, since unlike the United States, many of these European countries do not have a heavy presumption against speech restrictions.[26]

The issue of terrorist attacks and other hateful propaganda being broadcasted through these platforms is not over. The good news is that while these companies are self-regulated, they are motivated to foster community and a flow of ideas, which means these companies will continue to strike a balance between removing violent, hateful videos and fostering free speech.

 

[1] See Jon Emont, et. al, Facebook, YouTube, Twitter Scramble to Remove Video of New Zealand Mosque Shooting, Wall Street Journal (March 15, 2019, 7:03 p.m. ET), https://www.wsj.com/articles/live-video-of-new-zealand-mosque-shooting-dodges-social-media-safeguards-11552657931.

[2] See id.

[3] See Yoree Koh, Why Video of New Zealand Massacre Can’t be Stamped Out, Wall Street Journal, (March 17, 2019, 7:00 p.m. ET), https://www.wsj.com/articles/why-video-of-new-zealand-massacre-cant-be-stamped-out-11552863615?mod=article_inline.

[4] See id.

[5] See id.

[6] See Danielle K. Citron, Extremist Speech, Compelled Conformity and Censorship Creep, 93 Notre Dame L. Rev. 1035, 1038 (2018).

[7] See Kate Klonick, The New Governors: The People, Rules, and Processes Governing Online Speech, 131 Harv. L. Rev. 1598, 1608 (2018).

[8] See Ian Wren, Facebook Updates Community Standards, Expands Appeals Process, NPR (April 24, 2018, 5:01 AM ET), https://www.npr.org/2018/04/24/605107093/facebook-updates-community-standards-expands-appeals-process.

[9] See Klonick, supra note 6, at 1602.

[10] See id.

[11] See id.

[12] See id. at 1608.

[13] See id. at 1630.

[14] See id.

[15] See id. at 1608.

[16] See id. at 1617.

[17] See id.

[18] See id. at 1621.

[19] See id.

[20] See id. at 1623.

[21] See id. at 1624.

[22] See id. at 1625.

[23] See id. at 1624.

[24] See Citron, supra note 5 at 1038.

[25] See id.

[26] See id. at 1039.

 

Online Dispute Resolution: An Emerging Form of ADR Improving Access to Justice

By: Scottie Fralin

In today’s technology-dependent world, so much is accomplished on the Internet: consumer transactions, networking, job and school applications, event registration, and the list goes on. It’s hard to think of something we can’t accomplish online. However, filing or responding to a legal complaint typically must be done at the courthouse during regular business hours. This facet of our legal system poses a significant impediment to many pro se litigants who may have limited access to transportation or inflexible work schedules. Enter Online Dispute Resolution, an emerging tool that may be able to bring more people onto the same legal playing field. Online Dispute Resolution (ODR) “refers to a wide class of alternate dispute resolution processes that take advantage of the availability and increasing development of internet technology.”[1] ODR’s advantages include lower cost, high efficiency, and greater flexibility—both geographically and with regard to the formalities of the traditional legal processes.[2]

 

ODR’s most significant benefits are the reduction of costs and time.[3] Traditionally, resolving a dispute requires parties to pay potentially high attorney’s fees, court administration charges, and travel costs.[4] The proceeding itself might last for months or years before resolution.[5] Alternatively, ODR allows parties to save time and money while achieving social harmony through consensual solutions, where both parties end up satisfied with their stance in a mutually beneficial agreement.[6]

 

ODR is a process by which parties to a dispute engage in negotiation and mediation online.[7] ODR is primarily taking hold within municipal and county court systems to resolve small claims cases.[8] It’s being used to settle arguments between neighbors over fences, to settle debt collection issues, and to finalize divorce proceedings.[9] Though ODR technology best fits low-amount, high-volume disputes, it has recently matured to the point where more traditional ADR and litigation areas are within reach.[10]

 

As early as March 2019, a panel was held about ODR at South by Southwest (SXSW), the technology, film, and music conference in Austin, Texas.[11] Significantly, the panel noted that in the 1990s, only 4 percent of individuals in courts were not represented by lawyers.[12] Now, in 75 percent of civil cases, one side does not have a lawyer.[13] Utah was the first state in the U.S. to launch ODR as a tool, and as a result, the state has seen a fast and sizeable drop in defaults among eligible small claims cases.[14] Prior to launching ODR, 71 percent of those cases resulted in a default, and now, that number is down to 53 percent.[15] As the platform grows, it can move beyond small claims cases to traffic, misdemeanors, family law, and more.[16]

 

One source cites over 50 courts across the United States already using ODR, with Michigan district courts comprising the majority.[17] Another source claims that ODR is now being used by more than 50 jurisdictions throughout the 50 states.[18] The very new nature of ODR probably accounts for the differing available statistics on ODR’s true prevalence in the U.S. Either way, ODR’s potential influence on the U.S.’s established judicial practices is surely something to look out for.

 

One issue to look out for as ODR continues to take hold in our legal system includes the limited range of cases where ODR can be applied—i.e., typically, this alternative is used to negotiate a small dollar figure, which leaves out the possibility of innovative negotiating.[19] Critics of ODR also point out its impersonal nature, noting that some key dynamics of mediation may be lost when parties engage with each other at a distance and in front of computer screens.[20] Lack of regulation and enforceability are also concerns, as is accessibility because a continuous internet access is necessary to carry out ODR.[21] Thus, while the time saving and cost cutting aspects of ODR provide better access to justice, the technology still has its issues and convenience still comes at a price for some.

[1] AndraLeigh Nenstiel, Online Dispute Resolution: A Canada-United States Initiative, 32 Can. U.S. L.J. 313 (2006).

[2] See Joseph W. Goodman, The Pros and Cons of Online Dispute Resolution: An Assessment of Cyber-Mediation Websites, 2 Duke l. & T. Rev. 1-16 (2003).

[3] See John Chopyk, Serving Justice Online: Online Dispute Resolution as an Alternative to Traditional Litigation, lawless.tech (Sept. 11, 2018), https://lawless.tech/serving-justice-online-online-dispute-resolution-as-an-alternative-to-traditional-litigation/.

[4] See id.

[5] See id.

[6] See id.

[7] See id.

[8] See Zack Quaintance, Judges, Private Sector Spread Online Dispute Resolution in Courts, GovernmentTechnology (Mar. 20, 2019), https://www.govtech.com/public-safety/Judges-Private-Sector-Spread-Online-Dispute-Resolution-in-Courts.html.

[9] See id.

[10] See Loic E. Coutelier, The New Frontier of Online Dispute Resolution: Online Divorce Mediation, American Bar Association (Aug. 9, 2017), https://www.americanbar.org/groups/young_lawyers/publications/tyl/topics/dispute-resolution/new-frontier-online-dispute-resolution-online-divorce-mediation/.

[11] See supra note 4.

[12] See Zack Quaintance, SXSW 2019: Utah, ‘Pajama Court’ and Resolving Cases Online, GovernmentTechnology (Mar. 11, 2019), https://www.govtech.com/civic/SXSW-2019-Utah-Pajama-Court-and-Resolving-Cases-Online.html.

[13] See id.

[14] See id.

[15] See id.

[16] See id.

[17] See The National Center for Technology & Dispute Resolution, Courts Using ODR, http://odr.info/courts-using-odr/ (last visited Mar. 21, 2019).

[18] See supra note 4.

[19] See supra note 3.

[20] See id.

[21] See id.

 

Apple FaceTime Bug: What it Did, the Lawsuit, and Larger Implications

By: Jordan Carrier

On January 19, 2019 an Arizona teenager discovered that Apple’s FaceTime app was experiencing a serious bug.[1] Grant Thompson called his friend through the video chatting software and was able to listen through his friend’s microphone before the call had been answered.[2] Thompson and his mother notified Apple of the glitch the following day, but the tech giant failed to respond to the issue until an article on the issue went viral days later.[3]

The software flaw could be taken advantage of by calling someone through FaceTime, then adding a second person to the call using the Group FaceTime feature apple rolled out with iOS 12.1 in October of 2018.[4] Before the first person answered the phone, or even if that individual never picked up, the caller could capture audio.[5] It was later discovered by users that while only audio was initially picked up, if the person being called pressed a volume button the front-facing camera would be activated, allowing the caller to both see and hear the recipient of the call, without that person ever actually answering the call.[6]

On January 28, nine days after Apple was initially notified of the bug, news about the FaceTime bug was picked up by major news outlets and articles sprang up giving iPhone users instructions on how to avoid being negatively impacted by the eavesdropping feature.[7] The same day, Apple took Group FaceTime offline to mitigate the impact of the bug and promised to release a software update to correct the problem within the week.[8]

The nine day lag in Apple’s response was too slow, and allowed the glitch to be taken advantage of. On January 28, 2019 Houston attorney Larry D. Williams II filed a lawsuit against Apple for product liability, negligence, warranty, and fraudulent misrepresentation.[9] Williams alleges that while he did not misuse his iPhone in any way, the FaceTime bug allowed an unknown person to eavesdrop on the sworn testimony of a client during a private deposition.[10]

Not only are the potential consequences for the bug troubling, the security concern, labeled “FacePalm” by security researchers, has raised concerns about what other bugs are slipping through Apple’s quality control.[11] Bugs like these are commonly sold to governments, defense contractors, and cyber criminals who weaponize them to obtain information from people’s devices.[12] The New York Times reports that brokers can potentially sell these bugs for millions of dollars, with the caveat that the seller not reveal the software flaw to the vendor so it will not be fixed in a timely manner.[13]

In 2016 Apple announced it would provide rewards to individuals who notified the company of potentially lucrative bugs through its “bug bounty” program.[14] In some cases this program can pay up to hundreds of thousands of dollars to researchers who report bugs to Apple.[15] At the beginning of February Apple announced it would pay Grant Thompson for reporting the problem through this payment program.[16] It is lucky for Apple that an honest teenager discovered the problem rather than a hacker looking to make more than Apple is willing to pay.

 

[1]See Nicole Perlroth, Apple was Slow to Act on FaceTime Bug that Allows Spying on iPhones, NYT (Jan. 29, 2019), https://www.nytimes.com/2019/01/29/technology/facetime-glitch-apple.html.

[2]See id.

[3]See id.

[4]See id; see also Shara Tibken, iOS 12.1 with Group FaceTime, New Emoji, Dual-SIM out now on iPhones and iPads, CNET, (Oct. 30, 2018), https://www.cnet.com/news/ios-12-1-group-facetime-new-emoji-dual-sim-out-now-on-iphones-and-ipads/.

[5]See Nicole Perlroth, Apple was Slow to Act on FaceTime Bug that Allows Spying on iPhones, NYT (Jan. 29, 2019), https://www.nytimes.com/2019/01/29/technology/facetime-glitch-apple.html.

[6]See Nicole Nguyen, A FaceTime Bug Allows You to Access Someone’s iPhone Camera and Microphone Before the Pick Up, Buzzfeed News, (Feb. 1, 2019), https://www.buzzfeednews.com/article/nicolenguyen/facetime-bug-iphone.

[7]See Todd Haselton, Apple FaceTime Bug Lets You Listen in on People you Call, Even if they Haven’t Picked Up Their iPhone, (Jan. 28, 2019), https://www.cnbc.com/2019/01/28/apple-facetime-bug-lets-you-listen-even-if-someone-doesnt-answer.html.

[8]See Nicole Perlroth, Apple was Slow to Act on FaceTime Bug that Allows Spying on iPhones, NYT (Jan. 29, 2019), https://www.nytimes.com/2019/01/29/technology/facetime-glitch-apple.html.

[9]See Laurel Brubaker Calkins, Apple Gets Sued Over FaceTime Bug that lets  People Eavesdrop, Bloomberg, (Jan. 29, 2019), https://www.bloomberg.com/news/articles/2019-01-30/apple-sued-by-lawyer-over-facetime-bug-eavesdropping-on-client; see also Mike Snider, Apple FaceTime Lawsuit, SCRIBD, (Jan. 28, 2019), https://www.scribd.com/document/398585118/Apple-FaceTime-Lawsuit#from_embed.

[10]See id.

[11]See Nicole Perlroth, Apple was Slow to Act on FaceTime Bug that Allows Spying on iPhones, NYT (Jan. 29, 2019), https://www.nytimes.com/2019/01/29/technology/facetime-glitch-apple.html.l

[12]Id.

[13]Id.

[14]See Robert McMillan, Apple to Reward Teen as it Patches FaceTime Bug, WSJ, (Feb. 7, 2019), https://www.wsj.com/articles/apple-to-reward-teen-as-it-patches-facetime-bug-11549572939.

[15]See id.

[16]See id.

The Fortnite Hustle: Monetizing ‘Stolen’ Dance Moves

By: Zaq Lacy, Associate Executive Editor

Whether you love it, hate it, or simply do not care, it is a nearly foregone conclusion that you have heard of Fortnite Battle Royale, Epic Game’s free-to-play online massive multiplayer action shooter game,[1] which features a frenetic combination of firefights and construction with highly customizable characters. Released in August of 2017, it has grown to have over 200 million users, a number nearly that of the population of Brazil.[2] Despite being free-to-play for those who do not wish to purchase the standard or deluxe editions,[3] Epic Games raked in a record $2.4 billion dollars in 2018 alone from in-game purchases, mostly from character customization,[4] which can include outfits and celebratory dance moves that cost up to $20 apiece.[5]

It is these dance moves that have been the focus on legal troubles for Epic over the past few months.[6] The issue that has risen is that several of these moves were drawn from various sources of pop culture, from hip-hop artists to YouTube stars to actors, without permission or recompense.[7] This has resulted in several copyright infringement lawsuits being leveled against Epic by rap artist 2 Milly for their use of his dance move “Milly Rock,”[8] rap artist BlockBoy JB for their use of his dance move “The Shoot,”[9] YouTuber Russell Horning (aka “the Backpack Kid”) for their use of his viral dance move “the Floss,”[10] and actor Alfonso Ribeiro (The Fresh Prince of Bel-Air) for their use of his classic dance move “the Carlton.”[11] The complaint for 2 Milly’s lawsuit argues that “Epic has unfairly profited from exploiting [2 Milly’s] protected creative expression and likeness.”[12] Moreover, 2 Milly argues that the “Milly Rock” dance move is his ‘signature,’ and that “everybody would tell you, from here to Alaska, ‘Hey, that’s the Milly Rock.’”[13] Unfortunately, it does not seem like argument will be able to overcome the applicable law set out by Congress.[14]

The Copyright Act provides guidance for the general subject matter that is covered by copyright.[15] Regarding dance, it provides that “pantomimes and choreographic works” are covered,[16] though Congress made it clear that “‘choreographic works’ do not include social dance steps and simple routines.”[17] Further, the U.S. Copyright Office has stated that “the combination of these three dance steps is a simple routine that is not registerable as a choreographic work.”[18]

Despite the clarification, the differences between dance moves and actual choreography are subtle. For example, another YouTuber, choreographer Gabby David, successfully reached a settlement with Epic games[19] after Epic ‘borrowed’ a ten-second section of a dance routine that she posted on YouTube.[20] The reasoning behind the settlement seems to be because, even though the ten second clip only contained a few of the dance moves, not dissimilarly to those involved in the active lawsuits, they were part of a larger portion of choreography developed and recorded by Ms. David.[21] Seemingly, the only difference between the dance moves in question and that of Ms. David were the fact that the aforementioned moves consisted of a limited number of movements that simply repeated while Ms. David’s were part of a larger performance.

With the prevalence of social media and other mediums that are borne of the technology that is now available to nearly every creative person that wishes to share a particular skill, such as sweet dance moves, it is necessary to revisit the statute that was last truly updated in 1976,[22] long before the internet had even been truly invented. From a policy perspective, the antiquity of this law could potentially have a stifling effect on the creativity of countless individuals if they feel they cannot develop a signature move that popular culture recognizes as their own simply because someone else can take it, assimilate it into their own medium, and charge a substantial amount for it. However, barring any unexpected court rulings, until Congress takes fresh look at § 102(a)(4), it seems that Epic’s own move, “the Hustle,” is safe from the threat of lawsuit as long as they do not take their moves from a fully choreographed routine.

 

[1]See FortniteBattle Royale, Epicgames.com, https://www.epicgames.com/fortnite/en-US/buy-now/battle-royale (last visted Mar. 7, 2019).

[2]See Christopher Palmeri, Fortnite Now Has 200 Million Players, up 60% from the Last Count, Bloomberg LP (Nov, 26, 2018), https://www.bloomberg.com/news/articles/2018-11-26/fortnite-now-has-200-million-players-up-60-from-the-last-count.

[3]SeeFortnite, supra note 1.

[4]See Matt Porter, How Much Money Did Fortnite Make in 2018?,Dextero.com(Jan.16, 2019), https://www.dexerto.com/fortnite/how-much-money-did-fortnite-make-in-2018-285995.

[5]SeeDevon Pendleton & Christopher Palmeri, Fortnite Mania Fuels Epic Growth up to $8.5 Billion, Bloomberg LP(July 24, 2018), https://www.bloomberg.com/news/features/2018-07-24/fortnite-phenomenon-turns-epic-game-developer-into-billionaire.

[6]See Madeline Schrock, Why Fortnight’s Dance Animations Are a Can-of-Worms Copyright Problem, Dancemagazine.com(Dec. 13, 2018), https://www.dancemagazine.com/fortnite-2623060212.html.

[7]See id.

[8]See id.

[9]See id.

[10]SeeSteve Knopper, Why Fortnight Is Accused of Stealing Dance Moves, Rolling Stone(Dec. 19, 2018), https://www.rollingstone.com/music/music-features/fortnite-epic-games-2-milly-stealing-dance-moves-769344/.

[11]See id.

[12]See id.

[13]See supranote 10.

[14]Eric Garrett, ‘Fresh Prince’ Actor’s Lawsuit Over ‘Fortnite’ Dance Gets Surprising Update, Comicbook.com(Feb. 14, 2019), https://comicbook.com/gaming/2019/02/14/fresh-prince-actor-lawsuit-fortnite-dance-surprising-update/.

[15]17 U.S.C. § 102

[16]17 U.S.C. § 102(a)(4)

[17]Circular 52 Copyright Registration of Choreography and Pantomime, U.S. Copyright Office, at 3 https://www.copyright.gov/circs/circ52.pdf (last visted Mar. 7, 2019).

[18]See supranote 14.

[19]See supranote 6.

[20]Gabby J. David, “Bad & Boujee” – Choreography, YouTube.com(Jan. 26, 2019), https://www.youtube.com/watch?v=LcAFlWXlql8.

[21]See supranote 6.

[22]H.R. Rep. No. 94-553, at 2545 (1976).

Image Source: https://fortniteintel.com/youtuber-lawyer-discuccess-epic-games-emote-lawsuits/9203/

Application of the Howey Test to Cryptocurrency

By: Florian Uffer

A Background on Cryptocurrency

The relatively recent rise in cryptocurrency has significantly affected the financial world. As it becomes evident from the stock price, Bitcoin, the name generally associated to cryptocurrency, experienced a growth of about 2020% between January 2017 and mid-October 2017.[1] For 2017, the S&P 500’s average total return was 9.7%.[2] In light of such a return the growth that Bitcoin posted during that year is unfathomed. In order to realize such a growth in investment, however, an investor would have had to time it perfectly. Indeed, since that peak in mid-October, Bitcoin has plummeted and lost 82%.[3] This example elucidates the constant uproar around cryptocurrency, as its financial attributes are both cherished among bullish investors, while also disapproved of by risk-averse financial players.

The financial world was not the only one affected by the surge of cryptocurrency. The law has had trouble grasping this movement and is still struggling to effectively govern it: as a consequence, cryptocurrency still lacks a single regulatory body.[4] The main hurdle facing regulators consists of a difficulty in properly classifying the range of cryptocurrencies that exist.[5] This analysis, however, will only focus on cryptocurrencies used as a medium of exchange and provide a proposed answer as to whether the SEC has the ability to regulate them as securities. This analysis concludes that the SEC does not have the authority to regulate cryptocurrencies used as a medium exchange as investment contracts.

The Howey Test

The 1934 Securities Act’s definition of a “security” provides a catch-all provision – an “investment contract.”[6] The Supreme Court in S.E.C. v. W. J. Howey Co.stated that “an investment contract for purposes of the Securities Act means a contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.”[7] Put differently, an investment contract exists if there is a contract, transaction, or scheme and the following elements are present: (1) a person invests money (2) in a common enterprise and (3) is led to expect profits (4) solely from the efforts of the promoter or a third party.

The Howey Test Applied to Cryptocurrency as a Medium of Exchange

There are two main ways to acquire Bitcoin: (i) buy it from one of the many exchanges, or (ii) acquire it as payment for the delivery of goods or services.[8] In the first instance, it seems clear that in order to purchase Bitcoin, one has to come forth with a sum of money. Consequently, a purchaser would be investing money in order to obtain it and it would thus seem that purchasing Bitcoin would meet the first requirement of the analysis. As to the second instance, the Supreme Court in International Brotherhood of Teamsters v. Danielnoted that “[i]n every decision of this Court recognizing the presence of a ‘security’ under the Securities Acts, the person found to have been an investor chose to give up a specific consideration in return for a separable financial interest with the characteristics of a security.”[9] But, the Court continued, “[t]his is not to say that a person’s ‘investment,’ in order to meet the definition of an investment contract, must take the form of cash only, rather than of goods and services.”[10] Therefore, the first element of the Howey test is likely met.

            As to the second element, there are three ways of showing the existence of a common enterprise: horizontal commonality, broad vertical commonality, and narrow vertical commonality.[11] Circuits are unanimous in holding that horizontal commonality satisfies the second Howey factor, but are split as to whether either type of vertical commonality is sufficient.[12] When obtaining cryptocurrency, one does not pool his assets into an enterprise along with other investors; rather, one simply exchanges money or services for an alternative method of payment. A simple analogy can be drawn to exchanging U.S. Dollars for a foreign currency. Horizontal commonality is therefore lacking. Further, neither of the vertical commonalities are applicable to cryptocurrencies used as a medium of exchange. There is simply no promoter or third-party upon which the value of the “investment” in cryptocurrency depends. Instead, its value depends on government regulation, political and economic upheaval, and media and trader enthusiasm.[13]Consequently, cryptocurrency as a medium of exchange most likely does not meet the second factor.

The third factor of the Howey test is likely met. Although Bitcoin is used as a currency, its value drastically changes over time, even from day to day. Furthermore, the economic reality is that many people buy Bitcoin with the hopes that its value will rise and that they will be able to exchange it for more value. Therefore, it is reasonable to conclude that people investing in or buying Bitcoin have an expectation of profit.

Finally, the nature of cryptocurrency leaves the fourth factor of the Howey test hard to determine. Although just like stock, purchasers of Bitcoin are hoping that outside factors will cause its value to go up, there is no “effort” or “work” in the background which affects the value of Bitcoin. Rather, the value largely depends on government regulation, political and economic upheaval, and media and trader enthusiasm.[14] Whether these factors could be considered as “efforts of the promoter or of a third party” is difficult to determine. However, because the second Howey factor is not met, such an analysis is not required.

Conclusion

This analysis concludes that cryptocurrency used as a medium of exchange is not an “investment” contract under the Howey standard. Therefore, the SEC would not have the authority to govern it as such.

 

[1]Bitcoin USD (BTC–USD), Yahoo Finance(last visited Feb. 6, 2019), https://finance.yahoo.com/quote/BTC-USD?p=BTC-USD.

[2]Michael Santoli, The S&P 500 has Already met its Average Return for a Full Year, but Don’t Expect it to Stay Here, CNBC (June 19, 2017, 9:19 AM), https://www.cnbc.com/2017/06/18/the-sp-500-has-already-met-its-average-return-for-a-full-year.html.

[3]See supra note 1.

[4]See id.

[5]See Daniel Araya, The Challenges of Cryptocurrency Regulation,The Regulatory Interview(Oct. 9, 2018), https://www.theregreview.org/2018/10/09/araya-challenges-cryptocurrency-regulation/.

[6]See 15 U.S.C. § 78c(a)(10) (1934).

[7]See S.E.C. v. W. J. Howey Co., 328 U.S. 293, 294–296 (1946).

[8]See 5 Easy Steps to Get Bitcoins and Learning How to Use Them, Weusecoins (last visited Feb. 7, 2019), https://www.weusecoins.com/en/getting-started/.

[9]International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 559 (1979).

[10]Id. at 560 n. 12.

[11]“[H]orizontal commonality requires the pooling of assets from multiple investors so that all share in the profits and risks of the enterprise … Broad vertical commonality requires that the well-being of all investors be dependent upon the promoter’s expertise … [N]arrow vertical commonality requires that the investors’ fortunes be ‘interwoven with and dependent upon the efforts and success of those seeking the investment or of third parties.” See S.E.C. v. SG Ltd., 265 F.3d 42, 49 (1st Cir. 2001).

[12]See generally SG Ltd, 265 F.3d at 49–50.

[13]Why is Bitcoin’s Price Going Up or Down?, Finder (last visited Feb 7, 2019), https://www.finder.com/why-is-bitcoins-price-going-up-or-down.

[14]See supra note 13.

Cybersquatting: Impersonation or Flattery?

By: Alexis George

Today’s world is one in which social media is very widely used and undoubtedly intertwined with daily life. One result of this new reality is the prevalence of legal issues stemming from social media use. Cyberbullying is one of the most notable examples of what can go wrong when so many people use social media to communicate their ideas and emotions and interact with others. Nevertheless, another legal issue that plagues many social media platforms is cybersquatting. Cybersquatting is the practice of intentionally registering a domain name or username using a small variation on a celebrity’s or trademark’s name in order to mislead users and gain exposure and popularity, what is sometimes called a “social media presence”.[1]

In a marginal number of cases, cybersquatting can actually be unintentional and the result of coincidence. For example, in one case, Carnival Cruise Lines ended up bargaining with a Virginia teenager who without any malice toward the company, was coincidentally using the Snapchat handle @CarnivalCruise.[2] Interestingly enough, the company ultimately got the teenager to agree to give them the username in exchange for a luxury trip to Barcelona.[3]

Nevertheless, many instances of cybersquatting are the result of an intentional misrepresentation on the part of someone who decides to register a domain or username in the hopes of getting the trademark owner or a celebrity of the same name to pay them in order to take over the name. As time goes on and social media use becomes more prevalent, the issue continues to become more widespread. According to the World Intellectual Property Organization (WIPO), cases of cybersquatting have been growing exponentially over the past few decades.[4]

Cybersquatting often affects many different people and entities, but most commonly celebrities, brands, and companies. For example, in 2009 Jennifer Lopez filed and won a lawsuit against a website called “JenniferLopez.biz” and “JenniferLopez.org” that was posting indecent photos and videos about her as well as fake news stories.[5]Another notable example is in the case of Microsoft, which had to defend its trademark against a teenager named Mike Rowe who registered a website called “MikeRoweSoft.com”.[6] In this instance the WIPO actually had to get involved issuing a cease and desist order to Rowe, and Microsoft itself actually suffered some negative publicity as a result of trying to protect its trademark so aggressively.[7]

The Anticybersquatting Consumer Protection Act was enacted through Congress in 1999,[8] with it trademark owners were given a remedy to address issues such as registering, trafficking or using a domain name confusingly similar to a registered trademark.[9] The purpose of the law was to prevent cybersquatters from being able to register internet domain names that contain trademarks with no intention of creating a legitimate website but rather to try to later sell the name to the actual trademark owner or a third party.[10] There are two requirements a trademark owner must meet to bring a cause of action against an alleged cybersquatters. First, they must show that the cybersquatters had a bad faith intent to profit from the mark, and secondly, they must show that the cybersquatters has registered, traffics in, or uses a name that is either an identical name to, or confusingly similar to, a distinctive, famous, or trademark protected mark.[11]

Cybersquatting has increasingly become a problem for many celebrities, entertainers, and companies. Cybersquatting of usernames and domain names is usually the result of malicious intentions on the part of the cybersquatters to try to impersonate these individuals or organizations, or make a profit off of them by forcing them to buy the names and websites created by the fraudsters in order to protect their brands. Nevertheless, legislation like the Anticybersquatting Consumer Protection Act has helped combat this little known but interesting practice.

 

[1]See Moeller, Cybersquatting and Intellectual Property Protection, Moeller IP Advisors Blog(May 18, 2017), https://www.moellerip.com/cybersquatting-and-intellectual-property-protection/.

[2]See Mark Molloy, How ‘username squatting’ became a digital real estate nightmare for brands and celebrities, The Telegraph(Mar. 30, 2018), https://www.telegraph.co.uk/technology/2018/03/30/username-squatting-became-digital-real-estate-nightmare-brands/.

[3]See id.

[4]See Moeller, Cybersquatting and Intellectual Property Protection, Moeller IP Advisors Blog(May 18, 2017), https://www.moellerip.com/cybersquatting-and-intellectual-property-protection/.

[5]See Cybersquatting Examples: Everything You Need to Know, UpCounsel.com, https://www.upcounsel.com/cybersquatting-examples (last visited Mar. 4, 2019).

[6]See id.

[7]See id.

[8]See S. Rep. No. 106-140, at 29 (1999).

[9]See Cybersquatting, intellectual-property.legalhelp.org, http://intellectual-property.legalhelp.org/domain-names/cybersquatting/ (last visited Mar. 5, 2019).

[10]See id.

[11]See id.

Image Source: https://blog.marcaria.com/2016/08/12/what-is-cybersquatting/

The Changing Tide of Amazon Antitrust

By Sarah Alberstein

antitrust.jpg

Despite the fact that Amazon has quickly become the center of e-commerce, it has essentially evaded antitrust scrutiny.[1] But, it seems that this pattern of antitrust evasion is changing. In 2017, Lina M. Khan published a Yale Law Journal Note titled Amazon’s Antitrust Paradox.[2] In it, Kahn posits that Amazon’s business and marketing scheme has resulted in a low-profit yet overwhelmingly expansive business presence which has seeped into the consciousness of the average consumer – and, the consumer loves it.[3] One of Amazon’s main tactics has been to undercut pricing of brick-and-mortar stores until the stores go out of business, and then Amazon takes over the physical space once the original stores are gone. [4] This combination of consumer preference and satisfaction, price-cutting and retail takeovers, while still generating negligible net profits, Kahn argues, have allowed Amazon to essentially evade antitrust scrutiny while still benefiting from the marketplace evil antitrust law attempts to stamp out – anticompetition.[5] It seems, however, that international regulatory bodies are catching on.

Austria has become yet another country to launch an antitrust probe into Amazon’s practices.[6] The Austrian Federal Competition Authority (“BWB”) stated that it “will examine whether Amazon is discriminating against smaller stores using its platform and is favoring its own products on the Amazon marketplace.”[7] This investigation is similar to a 2018 European Union antitrust probe designed to “determine whether or not Amazon puts…third-party sellers at a disadvantage by using their sales data to boost Amazon’s own sales.”[8] Also in 2018, yet another investigation was launched by the German antitrust authority, The Bunderskartellamt.[9] The German investigation centered around determining whether Amazon is preventing fair e-commerce competition by overpowering other German online retailers, and forcing consumer and seller dependence on Amazon.[10]

Like the international shifts towards stricter application of antitrust law to Amazon, similar shifts are gaining ground in the United States.[11] Lina M. Kahn, the aforementioned author of Amazon’s Antitrust Paradox, was recently hired at the Federal Trade Commission and will be participating in hearings on competition and consumer protection.[12] Additionally, Congress is starting to pay attention to large tech company business practices through an antitrust lens.[13] Ranking member of the antitrust subcommittee of the House Judiciary Committee, Rep. David Cicillene, D-R.I. has stated his vision for the subcommittee as to “figure out the responsible way to regulate these large plaforms so that we are promoting competition, protecting privacy and making them responsible stewards of lots and lots of data” by “hold[ing] congressional hearings with the companies and technology experts, craft regulations, and…engage the public on issues of limiting corporate power.”[14]

Both scholastic and legislative scrutiny has emerged, prompting local and international attention to Amazon’s business practices and impact on the e-commerce marketplace. While Amazon has grown to become a giant within the e-commerce, and general retail space, without much antitrust scrutiny, it seems that the beginning of the end of this period is near for Amazon.

[1] Lina M. Kahn, Amazon’s Antitrust Paradox, 126 Yale L. J. 3 (Jan. 2017), https://www.yalelawjournal.org/note/amazons-anttrust-paradox.

[2] Id.

[3] Id.

[4] Chris Sagers, Crack Down on Amazon, Slate (June 19, 2017), https://slate.com/business/2017/06/yes-there-is-an-antitrust-case-against-amazon.html.

[5] Id.

[6] Boris Groehndahl, Amazon’s Legal Woes Grow in EU as Austria Opens Antitrust Probe, Washington Post (Feb. 14), https://www.washingtonpost.com/business/on-small-business/amazons-legal-woes-grow-in-eu-as-austria-opens-antitrust-probe/2019/02/14/34a7289a-3050-11e9-8781-763619f12cb4_story.html?noredirect=on&utm_term=.018fe4232048.

[7] Id.

[8] Sara Salinas, Amazon hit by EU Antitrust Probe, CNBC (Sept. 19, 2018), https://www.cnbc.com/2018/09/19/eu-probing-amazons-use-of-data-on-third-party-merchants.html.

[9] David Reid, Amazon is Being Investigated by the German Antitrust Autority, CNBC (Nov. 29, 2018), https://www.cnbc.com/2018/11/29/amazon-investigated-by-the-german-antitrust-authority.html.

[10] Id.

[11] Priya Anand, Amazon Antitrust Push Slowly Gains Ground, The Information (Jul. 19, 2018), https://www.theinformation.com/articles/amazon-antitrust-push-slowly-gains-ground.

[12] Id.

[13] April Glaser, Antitrust in the House, Slate (Jan. 16, 2019), https://slate.com/technology/2019/01/antitrust-david-cicilline-congress-facebook-google-monopoly.html.

[14] Id.

 

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