Extended Copy Protection - Legal Concerns

Legal Concerns

There is much speculation to what extent the actions taken by this software are a violation of various laws against unauthorized tampering with computers, or laws regarding invasion of privacy by "spyware", and how they subject Sony and First 4 Internet to legal liability. The States of California, New York, and Texas, as well as Italy, have already taken legal action against both companies and more class action lawsuits are likely. However, the mere act of attempting to view or remove this software in order to determine or prevent its alteration of Windows would theoretically constitute a civil or criminal offense under certain anti-circumvention legislation such as the controversial Digital Millennium Copyright Act in the USA.

The Electronic Frontier Foundation's Fred von Lohmann also heavily criticised the XCP EULA, calling it the "legalese rootkit."

One of the primary reasons for the XCP experiment lies in the issue of adding on DRM to a legacy standard. These problems are explored by Professor Randal Picker, Professor of Law for the University of Chicago School of Law, in his article, "Mistrust-Based Digital Rights Management", published in Volume 5 of the Journal on Telecommunications and High Technology Law. CDs by themselves are incapable of updating legacy hardware such as stand-alone CD players, and lack the ability to change or upgrade the firmware in order to read DRM. (Note that the term "update" as used here merely refers to converting to a later dated version, which, as always, may be an upgrade or a downgrade.) Thus the DRM must be added on so as not to interfere with the function of the legacy players but still work when the same CD is placed in a computer. Professor Picker analyzes the four main issues with add-on DRM.

The first problem, as demonstrated in the XCP example, is that capable consumers can simply by-pass the DRM. Turning off autorun prevented the rootkit installation and thus invalidated the DRM scheme.

The second problem is consumer reaction. Adding DRM to a legacy product like music CDs, which traditionally had no rights management scheme, will infuriate consumers. Professor Picker points out that in the wake of the negative publicity surrounding the Sony add-on DRM, Amazon.com began alerting customers as to which Sony CDs contained XCP. Customers could avoid the DRM entirely, negating the effectiveness.

The third problem lies in the legal response. The EFF, as well as state attorneys general, investigated and brought suit against Sony for the XCP program. Professor Picker does not analyze the legal merits of such suits, but the cost of litigation potentially outweighs the benefit of attempting to add-on DRM.

The fourth and final problem lies in the End User License Agreement attempted to be enforced by the add-on DRM. The ability to actually enforce these agreements on add-on DRM is limited by the mere fact that without active registration and tracking of the CDs, the company will have no one to enforce against. Thus, the benefit, enforcing the EULA against violators, is non-existent; the costs, however, of implementing the add-on DRM scheme, in the form of state and federal investigations, private lawsuits, negative publicity, consumer backlash and the technical limitations, far outweighs the benefits.