Letter to EP Legal Affairs Committee

December 19, 2011
By Ante

Tomorrow, 20 December 2011, the European Parliament Legal Affairs Committee will discuss ACTA.

Today, the FFII sent a letter to the committee. Below and pfd.

Dear Members of the Legal Affairs Committee,

The world faces major challenges: access to medicine, diffusion of green technology needed to fight climate change, and a balanced Internet governance. While flexibility is essential to solve these major issues, the Anti-Counterfeiting Trade Agreement (ACTA) codifies draconian measures. ACTA’s predecessor, the 1994 WTO TRIPS agreement, still hampers fair trade, even in life saving generic medicines. The EU should have chosen to further balance, in the World Trade Organization, the TRIPS agreement.

It is not too late. ACTA goes beyond US law, the US will not ratify ACTA. The Mexican Senate urged the government not to sign ACTA. India, Brazil and China have turned against ACTA. The EU can and should reject ACTA, and seek a balanced solution in WTO and WIPO.

Otherwise, it is the EU itself that will suffer under ACTA, while its competitors will not. ACTA’s measures are meant to paralyze people. ACTA’s intrusive character harms health and freedom of expression. ACTA will have a chilling effect on innovation, Internet service providers, mass digitization projects, startup companies and diffusion of green technology.

We will give two examples of a global pricing problem that ACTA will not solve but aggravate. We will show ACTA’s measures are draconian and go beyond current EU law. ACTA will hamper essential freedom to act and innovate in the knowledge society.

From TRIPS to ACTA

A few years after the European Community ratified the 1994 WTO TRIPS agreement, the AIDS epidemic took many lives in Africa. In sub-Saharan Africa alone more than 17 million people have died. After treatment became available, pharmaceutical companies sold AIDS medicine in Africa for prices higher than in the US. They only served a small number of patients, the others died. Mandela’s intervention, and international outcry, ultimately led to the Doha Declaration on TRIPS and Public Health.

Despite the Doha Declaration, the access to medicine problem still exists. Pulitzer Prize winner Tina Rosenberg wrote on the NY Times Opinionator blog: “The new strategy is to treat people in Egypt, Paraguay, Turkmenistan or China — middle-income countries, all — as if they or their governments could pay hundreds or even thousands of dollars a year each for AIDS drugs. This low-volume high-profit strategy might make business sense. But in terms of the war against AIDS, it means surrender.”

It is impossible to maximize both profits and access to medicine. To not commit a crime against humanity, access to medicines has to come first. Health groups and academics have pointed out ACTA will undermine access to generic medicines, see below.

Draconian measures do not help against media piracy

High prices for media goods, low incomes, and cheap digital technologies are the main ingredients of global media piracy. Relative to local incomes in Brazil, Russia, or South Africa, the price of a CD, DVD, or copy of Microsoft Office is five to ten times higher than in the United States or Europe, the Media Piracy in Emerging Economies report shows. There is no distribution of legal CDs and DVDs outside the capitals. Some 90% of the people in emerging economies can only turn to illegal media copies. Stronger enforcement can not solve the piracy problem, which is basically a global pricing problem, a sign of market failure.

We all know pictures of big piles of illegal CDs to be destroyed by a bulldozer. We may think: finally country X takes action against piracy. The real story behind these pictures is that these illegal copies are the only way 90% of the people in emerging economies can enjoy software, music and movies. The costs in social welfare of harsh measures are enormous.

ACTA adds draconian measures

ACTA introduces damages based on retail price. This leads to damages based on an imaginary gross revenue. For instance, someone in an emerging economy selling 100 illegal copies of a CD for 2 euro, has a gross revenue of 200 euro. With damages based on retail price, he may have to pay 2000 euro damages (100 x 20), ten times his gross revenue. The actual loss suffered may be zero, as there is no distribution of legal CDs outside the capitals, and almost none of his clients would have been able to pay the retail price.

Copying a hard disk for personal use may lead to a 540.000 euro lawsuit. Mass digitization projects and start up companies may face lawsuits of millions or billions euro.

These damages go beyond current EU law, which is based on actual loss suffered, including lost profits. The Commission denies ACTA’s damages are higher than EU law. Apparently, the Commission does not want to see the difference between imaginary gross revenue and actual lost profits.

ACTA’s criminal measures turn against citizens as well. ACTA includes criminal measures, without excluding small scale infringements and public interest infringements. ACTA can be used to criminalise newspapers revealing a document, office workers forwarding a file, people making a private copy and whistle-blowers revealing documents in the public interest.

Conclusion

ACTA will not solve the global pricing problem, but aggravate it. ACTA will increase social welfare costs, inflict unjustified and disproportional punishment and endanger lives. ACTA will hamper essential freedom to act and innovate in the knowledge society.

For references and further analyses, please see below.

Yours sincerely,

Ante Wessels

Foundation for a Free Information Infrastructure

References and further analyses

Media Piracy in Emerging Economies, edited by Joe Karaganis. Media Piracy in Emerging Economies is the first independent, large-scale study of music, film and software piracy in emerging economies, with a focus on Brazil, India, Russia, South Africa, Mexico and Bolivia.
http://piracy.ssrc.org

Opinion of European Academics on ACTA: “Contrary to the European Commission’s repeated statements and the European Parliament’s resolution of 24 November 2010, certain ACTA provisions are not entirely compatible with EU law and will directly or indirectly require additional action on the EU level.” They invite “the European institutions, in particular the European Parliament, and the national legislators and governments, to carefully consider the above mentioned points and, as long as significant deviations from the EU acquis or serious concerns on fundamental rights, data protection, and a fair balance of interests are not properly addressed, to withhold consent.”
http://www.iri.uni-hannover.de/acta-1668.html

European Commission’s services comments to the European Academics’ Opinion on ACTA:
http://trade.ec.europa.eu/doclib/docs/2011/april/tradoc_147853.pdf

The European Commission’s services comments to the European Academics’ Opinion on ACTA are very weak. In one case, the Commission actually even states it insisted ACTA would go further than current EU legislation. See: FFII: The EU Commission lacks basic reading skills:
http://acta.ffii.org/wordpress/?p=598

A study commissioned by the European Parliament INTA committee evaluated the prior discussion, and concluded that ACTA indeed goes beyond the current EU legislation: “for those European Parliamentarians for whom conformity with the EU Acquis is sine qua non for granting consent, this study cannot recommend that they provide such consent to ACTA as it now stands.”
http://www.erikjosefsson.eu/sites/default/files/DG_EXPO_Policy_Department_Study_ACTA_assessment.pdf
See also FFII comments on the INTA study:
http://acta.ffii.org/?p=681

Korff and Brown, fundamental rights experts, regarding damages: “In our opinion, here too ACTA is deficient: without express clarification to the effect that damages awarded to right holders must be a reasonable reflection of actual loss, equitably assessed by a court (rather than an exaggerated assessment based on an unchallengeable but rigged formula), the Agreement violates both the right to property and the right to a fair (civil) trial of the defendants.”

Korff and Brown regarding criminal measures: “In our opinion, ACTA, by not including a de minimis exception to its compulsory and draconian enforcement regime, fails to ensure adequate protection of the right to freedom to obtain and disseminate information, the right to freedom from unreasonable search and arrest, the right to inviolability of the home, and the right to the peaceful enjoyment of one’s possessions, and thus violates those rights.”

Douwe Korff & Ian Brown, Opinion on the compatibility of the Anti-Counterfeiting Trade Agreement (ACTA) with the European Convention on Human Rights & the EU Charter of Fundamental Rights, 2011:
http://rfc.act-on-acta.eu/fundamental-rights

FFII: Copyright Criminal measures in ACTA
http://acta.ffii.org/?p=34

Internet Society:
http://www.isoc.org/internet/issues/acta.shtml

Oxfam Statement regarding ACTA and Public Health: “ACTA will undoubtedly impact access to affordable medicines in the EU and other signatories by curbing generic competition. There are great concerns that ACTA’s impact will extend beyond those countries that initially sign the Agreement, potentially undermining access for millions of patients in developing countries who depend on affordable, quality generics.”
http://www.oxfamsol.be/fr/IMG/pdf/Oxfam_ACTA_analysis_FINAL.pdf

Public Citizen regarding access to medicine. Public Citizen raised concerns that the purported benefits of ACTA for public safety would be slim at best. Meanwhile, ACTA’s opportunity cost for more effective measures against unsafe products could be significant. Further, ACTA may impose direct costs on public health, by creating uncertainty and financial disincentives for the shipping of generic medicines. Public Citizen strongly advises a deeper and more considered legal review of ACTA.
http://www.citizen.org/documents/Letter-to-Members-of-the-Committee-on-Legal-Affairs-on-the-ACTA.pdf

The Greens / EFA group commissioned study on ACTA and Access to Medicines. This study by Sean Flynn with Bijan Madhani concludes that ACTA increases the risks and consequences of wrongful searches, seizures, lawsuits and other enforcement actions for those relying on intellectual property limitations and exceptions to access markets, including the suppliers of legitimate generic medicines. This, in turn, is likely to make affordable medicines more scarce and dear in many countries.
http://rfc.act-on-acta.eu/access-to-medicines

A Trade Barrier to Defeating AIDS, by Tina Rosenberg:
http://opinionator.blogs.nytimes.com/2011/07/26/a-trade-barrier-to-defeating-aids/

FFII regarding green technology: ACTA’s heightened measures may hinder development and availability of medical equipment, diagnostic methods and instruments; will restrict government flexibility, impede innovation and slow the development and diffusion of green technology.
http://acta.ffii.org/?p=675

DRAHOS, P., with BRAITHWAITE, J., Information Feudalism, Who Owns the Knowledge Economy?, Earthscan Publications Ltd, 2002
http://cgkd.anu.edu.au/menus/PDFs/Information%20Feudalism.pdf

FFII general ACTA analysis:
http://action.ffii.org/acta/Analysis

FFII ACTA blog:
http://acta.ffii.org

European Digital Rights initiative booklet on ACTA:
http://www.edri.org/files/acta-bklt-p2s.pdf

5 Responses to Letter to EP Legal Affairs Committee

  1. Caroline on December 19, 2011 at 10:35 am

    Enlightning article.
    Maybe send this article directly to the representative of the Netherlands, mr. M. Verhagen, because he still does not, or refuses to, understand which harm he will be doing to the dutch themselves and to all third world countries from which the dutch always say that they are so good in helping them.

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  5. [...] Letter to EP Legal Affairs Committee The world faces major challenges: access to medicine, diffusion of green technology needed to fight climate change, and a balanced Internet governance. While flexibility is essential to solve these major issues, the Anti-Counterfeiting Trade Agreement (ACTA) codifies draconian measures. ACTA’s predecessor, the 1994 WTO TRIPS agreement, still hampers fair trade, even in life saving generic medicines. The EU should have chosen to further balance, in the World Trade Organization, the TRIPS agreement. [...]