The $500,000,000 Cost of Google

If I told you that the DMCA notice system at Google alone was taking $500,000,000 a year out of the already beaten down global creative community, would you say that is such a staggering sum it can’t be right?  I think you’ll find that number is actually a low estimate based on Google’s own figures.  It makes a $100 million advance for licensing to Google Music look like chump change because it is.

One of Google’s legion of lobbyists recently testified at the House Judiciary Committee that Google alone has “processed” nearly five million DMCA notices so far this year.  Speaking before the House Judiciary Committee, the Google lobbyist did not call the Committee’s attention to another statement in her written testimony: That the number of DMCA notices “processed” by Google in 2010 was “only” 3 million—still a staggering number, but considerably less than 2011.

The increase is 166% so the trend line is definitely up–nearly vertical.  A couple possible explanations–the number of infringements is on the rise, Google is now actually responding to DMCA notices or responding to a much greater extent, or Google’s “we’re just an innocent bystander” explanation–copyright trolls, competitive behavior of copyright companies trying to hurt each other, or Middle Eastern political suppression.

OK.  Let’s give them one million of the five million notices are these outlier cases, a very generous concession particularly since these trolls and potentates didn’t seem to show up in any great numbers in the Google Transparency reporting.  But let us not allow the spin and distraction to completely obfuscate the real issue:  That’s still four million notices of infringement.

And remember–Google acknowledged they received five million notices in the same breath that the lobbyist touted the much ballyhooed YouTube ContentID filtering system–so this is five million on top of the ContentID blocking at least on YouTube, just to compare apples to apples.  So to speak.

When you view the cost of sending these notices from the creators’ side, each notice is estimated to cost the creator at least $100 on average in finding the infringing link, preparing and sending the notice and responding to efforts—particularly by Google—to intimidate the sender and accept almost any pretext as a “counternotification”–a ”process” that allows the Internet company to continue infringing until it is sued.  Which it hardly ever is by the millions of works by independent labels and artists from whom it profits.

This $100 cost estimate does not include the costs of legal fees that many incur to try to understand the counternotification process.  The five million notices do not include those who do not summon the will to send a notice in the first place, or who have been beaten down by the inane Google machine-based DMCA response system so that they no longer bother trying.

Either way, there is a staggering productivity cost—Google has largely automated its DMCA response process, but artists and indie labels have to send the notices one by one every time an infringing file is reposted whether it is in search results, advertising on rogue sites (probably not subject to DMCA in the first place), Blogger or YouTube.

So if Google captures the hash of works to be blocked on YouTube through its much ballyhooed ContentID system, then why not use the ContentID hases to block those same infringing works from search which scrapes the hash when it spiders?

Whether you believe that the $100 figure is correct—resulting in a $500,000,000 productivity cost for 2011 measured by Google’s own numbers—or a lower number is correct,  the very artists who are being ravaged by online theft are being asked to spend precious time and resources monitoring some of the largest corporations in the world.  We believe that the $100 number per notice number is actually low.

And the 1% at Google once again profit from human misery, just like the drugs case–there is not enough at issue in any one case for the artists involved to find it cost effective to sue and over time they will just give up.  Not because of copyright trolls, competitive behavior of copyright companies trying to hurt each other, or Middle Eastern political suppression.

Which kind of makes you wonder exactly how much of Google’s profits are due to shady activities.  It is hard to know how much of Google’s profits are made up of revenues from illegal activities. As Santa Clara Law School Professor Eric Goldman told the New York Times, “’How much of Google’s overall revenues are tied to product lines that are questionable?’ he said. ‘For investors, I think they just got a little bit of a jolt [after Google reserved $500,000,000 to pay its forfeiture in the drugs case] that maybe Google’s profits are due to things they can’t ultimately stand behind.’”  (Emphasis mine.) These potential misrepresentations and the “liar’s discount” are certainly a core claim in the stockholder suit filed against Google in San Diego.

So perhaps the reason that most artists can’t afford to fight back is because they were overrun by massive infringement and mostly because the cavalry is not coming.

And that, dear readers, is exactly the point.


One Comment

  1. The taking down of the story due to a sfepicic request could in some cases be understandable. You’ll find that the bigger deal is that not only are they removing those articles but also any articles that talk about the wider implications or indeed contain any criticism of Digg.Look at the front page and you’d think nothing was happening. Then look at digg spy and you’ll see that around 1 in every 4 or 5 active stories concerns this story.The real reason why they are capitulating and other sites such as Slashdot and Reddit are not is because they have taken sponsorship money from HD-DVD and this has interfered with their editorial decisions.