Legal Issues

by Mike Masnick




Could Antigua Use Free Music To Retaliate Against The US?

from the the-new-weapon-of-choice dept

The US and the tiny island nation of Antigua have been fighting it out in the WTO over online gambling laws for quite some time. It started years ago, with the US trying to go after someone for setting up an online gambling operation in Antigua. The US government, of course, is no fan of online gambling -- even though it's legal in large parts of the world. Things got ugly three years ago, when Antigua went to the WTO to protest the US's actions, noting that it appeared to violate a fair-trade agreement both countries had signed -- especially since the US does allow some forms of domestic online gambling. The WTO agreed with Antigua that the US was violating the agreement -- a decision we noted the US was likely to ignore completely. Indeed, that's exactly what they did, so Antigua went back to the WTO, who once again ruled in favor of Antigua... though, amusingly, the US still claimed victory and then proceeded to ignore the ruling anyway. According to the ruling, the US had until today to change its laws to reflect a more fair outcome -- something the US said it would do, but which it has shown no signs of actually following through on. So, what's a small country like Antigua to do? Normally, they could place trade sanctions on the US -- but that's likely to hurt Antigua a lot more than the US. Another option that's being discussed, apparently, is that Antigua would stop enforcing US trademarks and patents, allowing manufacturers in that country to start making knockoff goods.

It's definitely an interesting retaliation strategy, but Jerry Brito takes the argument one step further, suggesting that an even more compelling move might be to allow the creation of online music services that have been banned in the US, such as the original Napster or my.MP3.com. Or, at the very least, an online music store like AllofMP3.com that currently exists in a legal gray area over in Russia. That, clearly, could get the attention of politicians in the US, since they seem so tuned into the "concerns" of the entertainment industry these days. No matter what, though, it seems like this could be an interesting strategy for any country involved in a trade dispute with the US. In the past, we've seen Brazil use intellectual property enforcement as a weapon in trade disputes. However, using it as an offensive weapon to allow such products (especially digital ones) back into the US could be seen as a very powerful tool in such disputes and could lead to some challenges for the entertainment industry. Imagine every country that has a trade dispute with the US simply setting up servers upon servers of downloadable music and movies. Of course, if the industry learned how to embrace file sharing with alternative business models, this entire "threat" could disappear overnight. Somehow, that seems unlikely -- and, instead, we'd be subjected to commercials warning everyone that downloading from such sites helped our enemies.

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  1. identicon
    Bob, 5 Apr 2006 @ 8:40am

    Antigua

    As much as I'm all in favor of this WTO ruling, it's worth pointing out that Antigua hosed themself by unilaterally trying to tax the gaming industry on net revenue, a rediculous number that would have amounted to a huge percentage of the profits of the online casinos/sportsbooks. This was an abrupt change one year from a relatively small flat-fee to a huge percentage, and they did it with no discussion with the industry.

    Most operations moved to Belize/Costa Rica/Panama/Gibraltar and other places, at which point Antigua said "Oh! Wait! we changed our mind, we don't do it! Come back!" Would YOU go back?

    Add to this that the local government did basically nothing at all to help these businesses get started in antigua other than grant them a license.. (any imported computer equipment is very heavily taxed, no data centers existed,etc). Most online gaming companies wouldn't mind paying a percnetage of profits in taxes to their host countries IF those countries showed them some support.

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