Cox Communication's Infringement Battles
In recent years, Cox Communications has received a lot of backlash for their poor standards and punishments regarding pirating and copyright infringement. Cox’s inability to step up and give out the proper punishments to infringers has resulted in lawsuits from multiple companies and has been very pricey for the ISP (Internet Service Provider). The well-known service provider has had its setbacks recently and their last lawsuit ended in them being ordered to pay out one billion dollars in rewards to the record labels in the case. Cox will most likely look to change their policies if they want to stay profitable and avoid other lawsuits. Although there is a lot of negatives for Cox Communications and other ISPs, there comes positives for artists and companies that represent them. Overall, one’s actions might act in the best interest of another while also being the worse interest of others. In this paper, we will investigate the issues that led to Cox being sued by multiple record labels, the ethical thinking and evaluation from different perspectives like Utilitarianism and Kantianism, and also what steps that Cox can take to restore their image and be better ethically.
To understand what is going on, we will first have to talk about copyright. Copyright is the right that allows an artist or representing company ownership of the works they produce and allows for copying. Whether it is music, paintings, sculpting, or films, there is a creator behind the work who is entitled to the revenues their work brings in. The copyright allows for the creators to receive the revenues that come from the work and allows the creator to be the only one to copy the work they created. Copyrights are automatically given to a work when it is created. Depending on the legal work, this copyright will go to either the artist or the company representing them. In this case, we will be referencing record labels. For a work to be brought to court regarding copyright infringement, it must be registered through a specific process with the copyright department of the US Government. Once the process is complete, the work is then copyrighted and unauthorized copying, reproduction, or use of the work is illegal and can be brought to court. Copyrights have different lengths depending on the type of work, but for the majority of copyrights, they tend to last for 70 to 120 years. This will typically outlive the creator but will allow for the copyright to be passed onto someone else the creator would dictate.
Unfortunately, even with the protection of copyright, works are going to be pirated. But what does it mean to pirate? As stated before, this is the illegal copying and distributing of works that are not copyrighted to you. To your amazement, you have probably committed copyright infringement without even knowing. Copyright infringement is very easy to do and can be hard to trace in some cases. An example of this would be if you buy your favorite artists new CD. Your friend is also a huge fan of the same artist and asked to download the album onto their laptop. You go ahead and lend them the CD and they download the album. Boom, you have just committed copyright infringement. The infringement comes from you lending the CD to your friend. Since they did not pay for the CD, they do not have the rights to use the music. This example is very hard to trace because there is no digital footprint, and the record label is not going to go house to house searching for the receipt that says you or your friend purchased the album. The other way that music could be pirated is through the internet. If you were growing up in the 2000’s, you may have known of a website called LimeWire where you could access all the music you could want and download it for free or lower prices than the albums themselves. This again is copyright infringement as the uploader has purchased the album or illegally downloaded it and is allowing other to download it for free, or if they are smart, for a cheaper price. This is the most popular form of pirating and can be traced easier than physical pirating. As you can see, the original owner of the copyrighted work is being harmed as they are not collecting on the revenues they have worked hard to earn. Companies have been able to make certain programs to help trace users that are downloading and uploading songs through IP addresses. It is then between the company and ISP of the user to address the pirating with a punishment, which leads us to Cox Communication’s issues.
In the DMCA (Digital Millennium Copyright Act) it gives ISPs protection over certain amount of liability when it comes to pirating, as long as the ISP is actively following the procedures set by the DMCA. A strike rule was put in place to punish ISP subscribers who were pirating and to act quickly to their actions. This rule was set, but many ISPs adopted their own strike rule, Cox opted for a twelve-strike rule and it was allowed by DMCA. This became an issue with two record labels around 2014 when a lawsuit was brought up.
Coming back to the main point, the record labels had enough of Cox’s minuscule amount of punishment for infringers and acted against them. BMG Rights Management and Round Hill Music came together to sue Cox Communication on November 26th, 2014. The website Digital trends reported that over seven million separate acts of copyright infringement had been committed by over 200,000 Cox subscribers. (Digital trend) This was a big turning point as not many record labels were chasing after ISPs for copyright infringement issues. The record labels in questions had created a system that would track copyright infringers and notify the ISP of the infringer for them to follow up with a ban or detour them from pirating music. The system was doing its part by tracking the infringers and notifying the ISPs, but Cox was not setting the right punishments for the infringers. They would only have a temporary ban and limit the subscriber’s data usage, but they would not terminate the subscriber service and allow for them to continue what they were doing. This, in a sense, would allow for Cox to make money off infringers, which went against them in this case. A Digital Music News reported “BMG initially won the case in December of 2015 and was awarded $25 million in damages and $8.5 million in costs. But that decision was ultimately overturned on a technicality, with a retrial recently getting underway.” (Music News) The retrial was underway and was still being fought into 2018. That is when another lawsuit was brought forth to Cox.
In August of 2018, a collective of record labels filed a lawsuit against Cox for the same thing as BMG and Round Hill. This new lawsuit included bigger name record labels like Sony Music, Universal Music Group, Warner Music Group etc. They were suing Cox for contributory and vicarious copyright infringement and with the previous lawsuit, looked to make the ISP pay. They accused Cox of gaining profit from not terminating infringers. Digital Music News posted in an article “By refusing to shut down infringing subscribers, Cox “obtained a direct financial benefit.” The ISP wanted to “maintain the revenue that would come from their accounts.” Conversely, Cox had told labels it cut down its anti-piracy staff “for budget reasons.” At the same time, the ISP allegedly thwarted the labels’ enforcement activities.” (Music News) After the new lawsuit was brought to Cox, they decided to settle the previous lawsuit with BMG and Round Hill to what is assumed to make that case go away so it would not be as impactful against them in this new lawsuit. As we fast forward in the new case against Cox, the court sided with the record labels and has ordered Cox to pay out a hefty reward. A Verge article reported “A US District Court jury has found Cox Communications liable for piracy infringement of more than 10,000 musical works, and as a result, has awarded $1 billion in damages to Sony Music, Universal Music Group, Warner Music Group and EMI.” (Verge) This was a big blow to Cox Communications but has been a big victory for record labels and artists. Cox was stated to try and appeal the ruling, though the award amount will still be a hefty amount. Bloomberg Law wrote in a post “The jury didn’t err in awarding nearly $100,000 per work, but the court ordered a new calculation of the total number of works because some of the copyrights at issue covered separate musical compositions and sound recordings for the same song. The court said it would recalculate to find “the adjusted number of works in suit after combining those MCs and SRs that overlap in one work.” (Bloomberg) Though Cox may be paying less of an award, the dilemma overall has impacted record labels and ISPs and will possibly have a major change in how copyright and pirating will be addressed in the future. We can analyze the ethical and unethical thoughts regarding this issue to make more sense of the problem and how it has impacted each side.
We can identify the stakeholders as the Artists, Record Labels, ISPs, Shareholders, ISP subscribers, and infringers. The ones being affected the most in the issue would be the artists and record labels. They have created or have ownership over the works being created and should be compensated for the work when it is used or listened to. When they are not being paid for their works, they will be less inclined to make more work and this hurts the artists and record label, as well as the fans as they will not get as much music as they want. The ones who have the most power over the issue would be the record labels and ISPs. They must have good communication between each other to find the correct punishments for infringers so they can make pirating an offense that many do not want to face.
We can look at individualism to test how ethical the practices are that were set by Cox. Individualism can be defined as being profitable within the laws set by the government. It would be deemed unethical to operate in a way that allows for making profit while not following the law. In the situation of Cox, they were being both ethical and unethical with their actions. They were being ethical in following the law proceedings for the DMCA by having their own strike rule that was allowed. They were unethical when it came to issuing punishments and were unable to stick to the strike rule that they had placed. Ultimately, Cox was unable to remain ethical and continued to allow subscribers pirate music and collected revenue from them for using their service. Cox gained profit from not following the law and have failed the Individualism test.
We can look to utilitarianism for a means of why Cox acted in the way they did. Utilitarianism focus on the happiness of most people in the society, which can be done ethically or unethically, like lying or deceit. Cox could have looked to maximize the happiness of its shareholders and customers and fans as they were able to get the music that they wanted to listen to for free. Since there are more enjoyers of music than producers, the majority will go to pleasing the fans by allowing them to stream these works for free. Cox would benefit from this as more people would use their service if they knew they could get these things for free, which would boost sales and make shareholders happy. This would all come at the expense of the artists and record labels as they are not being paid for their works they worked hard to produce. So, in the eyes of a utilitarian, they would be doing the ethically correct thing as they are making the most people happy in the situation, even if through the means of lying or deceit.
In a Kantianism outlook, one would look to treat someone as more than just a means for an end goal. In simpler terms, you will look to develop more from an individual than just leave the to the side after they do something for you. Cox continued to gain profits from subscribers that pirated music from the record labels of the situation. The record labels were working with Cox, but they were not willing to punish the copyright offenders, making the record labels just a means to gain profit from. We could put this into perspective as well with if every ISP allowed pirating with no consequence. If that happened, all record labels would know and look to distribute their music in a different format or make their music like accessible so people would be forced to purchase it. It could also lead to artist not producing music anymore since they are not getting paid for their work. Cox was not ethical in how they treated the record labels and in turn they were sued and had to pay out massive rewards for damages to these labels.
Within Virtue Theory, the idea is based on having a broader prospective about the values and ideas the person or company believes in then just what is going on. These things could include honesty, greed, prudence, deceit, and much more positive and negative values. In this situation, we can see that Cox was not honest in working with the record labels and did not respect their values to try and prevent pirating. They were greedy and looked to make money over doing the correct thing for the record label. Cox did not value the record label or their promise to them that they would work to minimize pirating and only looked for gain on their revenues, which ultimately came back to haunt them.
My overall evaluation of the situation is not favorable of Cox. Artists go through hours upon hours creating and producing music and more for our enjoyment. A lot of people do not see or think about the hard work and dedication to go ahead and make a hit song. It takes a very long time to put out a song due to the producing and mixing and it gets even longer if you are signed to a record label due to legal work. Artists and record labels do not have it easy when it comes to releasing music, especially now with the internet and the ability to connect with more people just from home. Songs can easily be transferred to other people and is why record labels have created tracing programs to find infringers. The ISPs are protected in a way where they are not liable for copyright by the subscriber, only liable if they do not act. In this case, the record labels were alerting Cox of the issue and they did not look to correct it. They allowed for hundreds of thousands of musical pieces be pirated even when they were notified of what was going on and they did not act in the way they should have. Cox made a very unethical choice to ignore the problem and, in the end, payed for it. I am happy to see the case end this way because pirating has become too easy and needs to be controlled. Hopefully, new legislation will be created from this to better protect artists and record labels and hold ISPs more liable in the act of copyright.
I feel the action plan that Cox should take would issue an apology for not taking the situation seriously to the public and try to recover their image. The next step would be to create a new and improved plan to combat pirating and working in a closer proximity with record labels and more to protect their works that can be pirated. Once the new plan is placed, they must stick to it or else they will be doomed to fail. To make things better for the ISP industry altogether, they can form an alliance or collective that will investigate pirating and making the offenses have harsher punishments. To remain profitable but detour pirating, they can set a six-strike system for infringers. They can set bans and fines which increase for each strike received until the sixth strike, which could result in a permanent ban from the specific ISP or any ISP in the region, or jail time. If Cox is working to combat pirating and working with record labels, they can look to recover their image and get back to the right track of being successful and profitable for years to come.
(Digital Trend) Nelson, K. (2014, December 01). Cox Communications Sued For Allowing Copyright Infringement. Retrieved December 01, 2020, from https://www.digitaltrends.com/music/cox-communications-sued-music-piracy-bmg/
(Music News) Sanchez, D. (2018, September 09). Major Record Labels Sue Cox Communications for $1.5 Billion. Retrieved December 01, 2020, from https://www.digitalmusicnews.com/2018/08/03/record-labels-v-cox-communications/
Resnikoff, P. (2018, August 27). BMG Secures a 'Substantial Settlement' Against Cox Communications. Retrieved December 01, 2020, from https://www.digitalmusicnews.com/2018/08/24/bmg-settlement-cox-communications/
(Verge) Peters, J. (2019, December 20). Cox owes $1 billion to record labels for harboring music pirates, jury decides. Retrieved December 01, 2020, from https://www.theverge.com/2019/12/19/21030812/cox-communications-record-labels-lawsuit-appeal-1-billion-piracy-isp-charter(Bloomberg) Cox Can't Escape $1 Billion Copyright Verdict, Can Reduce Award. (n.d.). Retrieved December 01, 2020, from https://news.bloomberglaw.com/ip-law/cox-cant-escape-1-billion-copyright-verdict-can-reduce-award