[x-pubpol] Copyright and Technology: The Future of HADOPI

Sat Oct 27 10:21:41 PDT 2012

The Future of HADOPI<http://copyrightandtechnology.com/2012/10/26/the-future-of-hadopi/>

Posted: 26 Oct 2012 08:22 AM PDT

A recently-released report from the French government, Rapport sur les
autorités publiques indépendantes (Report on the Independent Public
Authorities), includes a section on HADOPI (Haute Autorité pour la
diffusion des oeuvres et la protection des droits sur internet), the
regulatory body set up to oversee France’s “graduated response” law for
issuing warnings and potentially punishments to online copyright infringers.

The headline that most Anglophone writers took away from the 24 pages in
this report that were devoted to HADOPI was “HADOPI’s budget to be cut by
23%.”  These writers took their cues from anti-HADOPI statements by various
French politicians<http://copyrightandtechnology.com/2012/02/21/hadopi-becomes-un-ballon-de-football-politique/>—
including new French President Francois Hollande — and
mischaracterized a statement
about HADOPI<http://paidcontent.org/2012/08/03/france-will-cut-funding-to-its-piracy-police/>by
the French culture minister, Aurélie Filippetti.

Unfortunately, none of these people appear to have actually read the
government report.  (Yes, it’s in French, but there is Google Translate.  I
used it.)  HADOPI is not on the way out; not even close.

Let’s get the most obvious facts out of the way first.  Yes, HADOPI’s
operating budget is being cut from €10.3 Million to €8 Million, but its
headcount is being increased (from 56.2 to 65.2 FTE).  Apparently the
budget cut reflects the fact that HADOPI’s ramp-up period is coming to an
end in 2012, and the focus is being shifted to increasing operational
efficiencies and cutting overhead.  Moreover, HADOPI’s purview is being
expanded to include video games as well as music and video content.

Another bit of factual cherry-picking in the Anglophone press: HADOPI has
merely sent out more than a million emails but only prosecuted 14 people
and only fined one (less than €200), so therefore it must be a big waste of
money.

On the contrary: all of the data in the report, as well as the conclusions
it draws, point to an agency whose successes are outnumbering its failures
and whose mission is quite properly being optimized.

As it turns out, HADOPI has several objectives, not just issuing warning
notices to illegal downloaders.  Those other functions are where HADOPI
does not look as successful as hoped.  One objective is to increase the
number of legal content offerings in France.  To do this, it has put a
labeling system into place, along with a website called PUR
<http://www.pur.fr/>(Promotions des Usages Responsables, also an acronym
for the French word for “pure”) that lists all of the labeled services.
 Although the report cites a sharp increase in the number of such services
in France over the past year, that increase is surely attributable to
market forces and is no different from similar increases in other countries.

Another of HADOPI’s objectives is to regulate the use of DRM technology
according to rules derived from the European Union Copyright Directive of
2001.  This means both ensuring that DRM systems don’t unduly restrict
users’ rights to content and that DRM circumvention schemes (hacks) are
prosecuted under the law.  So far, HADOPI has only been asked to intervene
in two DRM disputes concerning users’ rights, and both reviews are ongoing.
 This can’t be counted as a great success either.

Yet regarding HADOPI’s core “graduated response” function, the data in the
report shows nothing but success so far.  Fining people (a maximum
of €1500) and suspending their Internet access (up to one month) is not the
objective; reducing copyright infringement is.  The number of people who
have been fined or had their Internet access suspended is simply the wrong
metric.

The good news is that HADOPI appears to be succeeding as an education
program rather than as a punitive one.  In 2011, HADOPI reports that fully
96% of people who received a first warning message did not receive a second
one; this number stayed about the same in 2012.  In addition, the
percentage of people who received second notices but not third ones rose
from 90% to 98% from 2011 to 2012.  (The legal steps that could lead to
fines or suspensions begin after the third notice.)  To buttress this data,
HADOPI has published results from four independent research reports that
note significant decreases in illegal downloading in 2011.  No one has
substantively debunked any of these findings.

Furthermore, HADOPI does not simply take complaints from copyright owners —
which monitor the Internet and submit complaints to HADOPI — at face value.
 For more than half of the users who received three warnings, HADOPI chose
not to send the cases to French authorities for prosecution.

It is also interesting to note that the educational aspect of HADOPI
appears to be succeeding despite the fact that it treats violations as
misdemeanors, with small punishments, in contrast to the enormous criminal
penalties associated with copyright infringement in France (as they are in
the U.S.).  This points to the conclusion that online education is more
effective than large statutory damages in curbing infringement.

Now let’s talk about the economics.  Ideally, this type of program would be
funded by copyright holders — the ones with rights that they want
protected.  France is funding HADOPI with taxpayers’ money, although
copyright owners do pay for the monitoring services that detect allegedly
illegal downloads and report them to HADOPI.

At the same time, €8 Million isn’t a bad deal.  France currently has about 50
million overall Internet
users<http://www.tradingeconomics.com/france/internet-users-wb-data.html>
and
about 25 million fixed broadband
subscribers<http://www.tradingeconomics.com/france/fixed-broadband-internet-subscribers-wb-data.html>.
 Let’s assume that the total number of French people who pay for Internet
subscriptions is about 30 million.  In that case, HADOPI’s annual budget
could be apportioned as a levy on Internet subscribers of about €0.27 (US
$0.35).  This is two orders of magnitude smaller than the £20 (US $32)
annual antipiracy levy on ISP subscribers that the Digital Britain Report
proposed for the UK in
2009<http://copyrightandtechnology.com/2009/01/30/digital-britain-report-calls-for-isp-antipiracy-levy/>
.

Furthermore, HADOPI measured the market impact of unauthorized downloading
(not counting P2P) as €51 to 72.5 Million annually.  Although this figure
can’t be taken as a magnitude of lost sales, the worst case break-even
point for HADOPI’s cost-effectiveness would be that 16% of illegal
downloads displace sales (one study attempted to measure promotional
effects vs. sales displacement and suggested that about two-thirds of
illegal downloads displace
sales<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1013730>
).

It’s still too early to proclaim HADOPI’s success or failure.  For example,
the more determined infringers could move to ways of obtaining content that
evade detection (e.g. HADOPI only deals with downloads and not streaming).
 But the signs are encouraging enough that the French government has
decided to keep the experiment going.

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