Watch CBSN Live

Amazon and Who Owns Data

The recent dustup over removing unauthorized copies of George Orwell's 1984 from the Kindles of people who had bought the title seems to have settled with muddled excuses from Amazon and righteous anger from many in blogging and the press. But what many seem to be missing is that for the industry, this brings up far bigger questions than what Amazon will and won't do and how consumers might feel about it. Some of what came up goes right to the heart of problems about media and even data ownership that are only going to get more complex and divisive.

It is clear why media producers are interested in DRM: It lets them force people to buy music, books, games, and more rather than sharing friends' copies. But as companies move to wider sourcing of media -- partly in the hope of riding that great wave of Free, or at least Cheap, into the bank -- they become less certain about who exactly is providing what. In the case of the unauthorized copies of 1984, someone without permission had uploaded the title. Perhaps the person thought that it was in the public domain, or maybe he or she figured that no one would notice. However, someone did.

Amazon was faced with a difficult situation. On one hand, it risked setting off criticism. On the other, it was officially profiting from illegally reproduced copyrighted materials. Because of U.S. copyright law, the result could be liabilities of up to $1500 or even more, depending on the circumstances, for each copy sold. Sure, Amazon could swallow that easily for a few copies. Should a slip make it big time, the total might not be so negligible.

So Amazon refunded the money paid, took the titles out of the readers' accounts, and the copies disappeared off the devices. That opens a different set of issues. People are used to owning the physical copies of media that they purchase, if not the copyright of the included content. What Amazon did was underscore that purchasers are literally only purchasing long-term licenses to copies of content. They do not actually control what they've paid for.

It's a practical examination of what DRM critics have mentioned in the past. People no longer actually get what they think they own. Instead, they can be limited in their use in ways that are unprecedented:

  • U.S. courts have upheld that people who buy a book, for instance, have the right to resell that book, give it away, set fire to it, or do anything else with the physical copy. When the physical copy goes, where do the rights go?
  • If Amazon changed policies about the types of literature they would be willing to sell, could it then remove those same types of books by refunding money to readers?
  • Could a publisher in dispute with an author ask Amazon to take down a title, removing it from readers and essentially retroactively reducing sales, and, therefore, author royalties, for the book?
  • Could Amazon, with permission, change the content of a book and then change the version that people were reading?
The legal issues are manifest. If such an action is not expressly allowed in the sales agreement with customers, and possibly even if it is, then Amazon is essentially saying that it can unilaterally cancel a contract after it accepts payment and the customer receives the goods. That would fly in the face of hundreds of years of contract law.

The complications only continue. Instead of media, think about data being hosted by a third party. Will that cloud vendor effectively be able to institute the virtual equivalent of a mechanic's lien so that customers not up to date were cut off from access to their data? Eventually will a cloud vendor be able to undertake an action analogous to that of a storage company, which can auction off someone's goods if payment on the storage space is not kept up-to-date?

There are no simple answers -- and complex ones are likely also hard to find. But vendors and customers may find that the promise of racing ahead to virtual operations and life may have to wait until lumbering courts have a chance to at least get within sight.

Image courtesy, Inc.

View CBS News In
CBS News App Open
Chrome Safari Continue
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.