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Last Thursday, the Fourth Circuit decided a closely followed case on one of the safe harbor defenses under the Digital Millennium Copyright Act (DMCA). See BMG Rights Management (US) LLC v. Cox Communications, Inc., No. 16-1972 (4th Cir. Feb. 1, 2018). The court also addressed the intent standard for contributory copyright infringement.

BMG, an owner of copyrights in digital music files, sued Cox, an internet service provider, for contributory copyright infringement by Cox subscribers engaging in “peer-to-peer” music file sharing. The district court held that Cox was not entitled to the safe harbor defense under Section 512(a) of the DMCA because Cox did not satisfy the conditions under Section 512(i)(1)(A) that it “adopted and reasonably implemented … a policy that provides for the termination in appropriate circumstances of subscribers … who are repeat infringers.” At trial, a jury found Cox liable and awarded BMG $25 million.

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The Federal Trade Commission recently issued the findings of its long-awaited Data Brokers Report, which compiled information gathered from nine data brokers commissioned for the study in December 2012. The purpose of the Report, which examined data brokers catering to the product marketing, risk mitigation, and people search industries, is to advocate for greater transparency from data brokers themselves with the help of proposed legislation to regulate their actions.

The Report is the latest document introduced to support a growing trend towards transparency regarding data collection practices. The FTC has been advocating for improvements in this area since the 1990s, when it introduced the short-lived, self-regulated Individual References Services Group, and may finally have grounds for legislative action within the findings of the study. States are already taking notice: the California Senate has just passed a bill, SB 1348, which would require data brokers to provide a consumer opt-out function and allow consumer access to information. With regulation imminent and scrutiny focused on data brokers, it may be time to reevaluate the brokers you do business to ensure future compliance.
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