{"id":86466,"date":"2025-12-09T09:00:29","date_gmt":"2025-12-09T09:00:29","guid":{"rendered":"https:\/\/www.cryptocabaret.com\/?p=86466"},"modified":"2025-12-09T09:00:29","modified_gmt":"2025-12-09T09:00:29","slug":"eu-report-distills-ai-training-lessons-from-napster-piracy-era-dont-sue-license","status":"publish","type":"post","link":"https:\/\/www.cryptocabaret.com\/?p=86466","title":{"rendered":"EU Report Distills AI-Training Lessons from Napster Piracy Era: Don\u2019t Sue, License"},"content":{"rendered":"

\"napster\"When Napster found its way to millions of desktop computers 25 years ago<\/a>, the music industry was terrified by this apparent existential threat.<\/p>\n

Determined to make the problem disappear, the legal response was swift. Within a year, the RIAA sued Napster, and artists such as Metallica and Dr. Dre soon followed.<\/p>\n

This strategy seemed to work, as the RIAA lawsuit effectively shut down Napster two years after it launched. However, the genie was out of the bottle, and the \u2018magic\u2019 of unlimited access inspired many new sharing apps, such as LimeWire and Kazaa. These new applications eventually ran into trouble as well.<\/p>\n

Report: The Economics of Copyright and AI<\/h2>\n

The massive legal response against file-sharing software in the early 2000s shows parallels with today\u2019s copyright clashes between rightsholders and AI companies. Many rightsholders see AI as an existential threat, and there are dozens of high-profile lawsuits on the way. Meanwhile, lawmakers are considering if they need to intervene.<\/p>\n

According to a new report prepared for the European Parliament, lawsuits were not the right answer to piracy, and they are not going to solve the current AI challenges either. Titled \u201cThe Economics of Copyright and AI\u201d<\/a>, the report was commissioned by the European Parliament\u2019s Committee on Legal Affairs (JURI) to help shape future legislation.<\/p>\n<\/p>\n

The Economics of Copyright and AI<\/em><\/center>
\"ai<\/center><\/p>\n

The report\u2019s author, Christian Peukert<\/a>, Professor of Digitization, Innovation, and Intellectual Property, has extensively researched both AI and piracy-related copyright challenges in the past. <\/p>\n

Enforcement Doesn\u2019t Work<\/h2>\n

The general conclusion is that creating too many barriers to using content for AI training data will harm the economy and the public. Instead, the EU should look to the \u201clessons from history\u201d provided by online piracy.<\/p>\n

One of the lessons is that early anti-piracy actions and legislation, such as the lawsuits against Napster or new anti-piracy laws in France and Sweden, were largely ineffective. These measures typically led to short-lived sales increases that quickly disappeared, as pirates simply switched to new sites and services.<\/p>\n

The turning point came when licensed downloads and streaming services were made available to the public. Starting with iTunes, which pioneered music downloads, later spreading to streaming services such as Spotify and Netflix.<\/p>\n

\u201cThese innovations successfully shifted consumer behavior towards legal consumption. Aggregate data indicate that unlicensed music consumption has been continuously decreasing since 2010, while consumption of unlicensed movie and TV show content has been stagnant and slower to decrease,\u201d Professor Peukert writes. <\/p>\n

Compulsory, Statutory Licensing<\/h2>\n

Instead of slowing down AI development by restricting access to copyrighted content, the report suggests a system of compulsory, statutory licensing. This would effectively give AI developers the guaranteed right to use all published works. In exchange, an independent authority would set a royalty rate to compensate rightsholders.<\/p>\n

This would effectively authorize the use of copyrighted works for AI training, as some countries are already doing. However, in this case, rightsholders would receive compensation. <\/p>\n<\/p>\n

Key Findings<\/em><\/center>
\"statutory<\/center><\/p>\n

Statutory licensing is different from the licensing deals reached with online streaming services such as Spotify and Netflix. The report recognizes that but notes that direct licensing models are not a great solution for the scale of AI training.<\/p>\n

While Spotify deals with a manageable number of record labels and publishers, AI models require training data from the entire internet, including billions of texts, images, and videos. The report argues that identifying and negotiating with millions of individual website owners, creators, and photographers is effectively impossible.<\/p>\n

This individual license approach would be particularly problematic for smaller AI startups, which don\u2019t have the resources to negotiate thousands of deals.<\/p>\n

No Opt-Out<\/h2>\n

Perhaps most controversially, the report warns against an \u201copt-out\u201d model where rightsholders can exclude their content. It argues that opt-outs create \u201choles\u201d in training data, which will lead to biased AI models. <\/p>\n

From an economic welfare perspective, the report ranks the \u201copt-out\u201d model as the worst possible option, even worse than doing nothing.<\/p>\n

\u201cWhen a rightsholder exercises opt-out, they do not take into account that this decreases value for society,\u201d the report notes. The report concludes that rightsholders should not be allowed to opt-out from AI-training under any circumstance.<\/p>\n

Napster Lessons<\/h2>\n

In the Napster case 25 years ago, the court explicitly rejected statutory licensing because it would allow an infringer to essentially pay a fine to keep breaking the law. <\/p>\n

The report suggests that, this time around, the logic should be reversed. AI promises massive consumer benefit, estimated at $97 billion annually in the US alone, which is why the report argues that AI development should not be hindered.<\/p>\n

For AI training, companies should be allowed to \u201ccontinue operations\u201d by paying a fee, because restricting access to copyrighted works would destroy too much economic value.<\/p>\n

\u201c\u2026 AI is very different from historical cases of online piracy, as it creates large net benefits for society while using copyrighted works as input. Hence, a regime that allows to \u2018continue operations\u2019 is in the best interest of society,\u201d the report reads.<\/p>\n<\/p>\n

Napster arguments<\/em><\/center>
\"naps\"<\/center><\/p>\n

Based on these historical lessons and detailed economic welfare models, the report sees compulsory statutory licensing as the best way to tackle the AI copyright challenges in Europe. Whether rightsholders and lawmakers will agree has yet to be seen, of course. <\/p>\n

\u2014<\/em><\/p>\n

Peukert, C. (2025). The Economics of Copyright and AI. European Parliament, Policy Department for Justice, Civil Liberties and Institutional Affairs. doi:10.2861\/0246137 (pdf<\/a>)<\/p>\n

From: TF<\/a>, for the latest news on copyright battles, piracy and more.<\/p>\n

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When Napster found its way to millions of desktop computers 25 years ago, the music industry was terrified by this apparent existential threat. Determined to make the problem disappear, the legal response was swift. Within a year, the RIAA sued Napster, and artists such as Metallica and Dr. Dre soon followed. This strategy seemed to […]<\/p>\n","protected":false},"author":2,"featured_media":86467,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[308],"tags":[],"class_list":["post-86466","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-torrent"],"_links":{"self":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts\/86466","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=86466"}],"version-history":[{"count":0,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/posts\/86466\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=\/wp\/v2\/media\/86467"}],"wp:attachment":[{"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=86466"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=86466"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cryptocabaret.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=86466"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}