Last year, Maryland lawmakers unanimously passed a bill that aimed to help public libraries offer e-books and audiobooks to patrons. Publishers were charging libraries three to five times as much as consumers pay for an e-book, and for only a two-year license, state legislators showed. The law, signed in May, would require publishers to license electronic literary products to Maryland public libraries “on reasonable terms.”
A similar measure in New York was also passed, virtually unanimously, over the summer, with 210 state legislators in favor and one voting nay—only to be vetoed in the last days of the year by Democratic Gov. Kathy Hochul.
Gov. Hochul’s veto came after the industry group Association of American Publishers (AAP) initiated a lawsuit in December against the Maryland law, arguing that it violated federal copyright law. Hochul echoed the AAP’s position in her statement explaining why she vetoed the bill, which had strong grassroots support from library advocates.
Lawmakers in six other states have introduced bills that seek to support schools and libraries in accessing e-books, as institutions are being hit with high prices and restrictive licensing terms for digital works—and with publishers refusing to make some e-book titles available to libraries. According to a recent survey by the library group ReadersFirst, e-book prices for libraries have tripled over the past nine years, with publishers charging between $20 and $65 for an e-book copy that libraries cannot own permanently. For popular e-books, libraries pay $55 for a copy that expires after two years, or $550 for a copy for 20 years, compared with the about $15 that a consumer would pay, according to the American Library Association (ALA).
The Maryland law passed 130 to 0 in the General Assembly and 47-0 in the Maryland Senate, and took effect on the first day of this year. Last month, however, a federal judge issued a preliminary injunction, siding with AAP’s argument in their lawsuit that the law interferes with federal copyright law. The Maryland attorney general will defend the state’s law, a stance applauded by the ALA.
Soaring E-Book Use
Libraries and schools worldwide have been increasingly lending out e-books and audiobooks, even before the coronavirus pandemic took hold. Over 500 million copies of digital books were circulated last year, according to digital reading platform OverDrive, an increase from 430 million the year before and 326 million in 2019. Back in 2016, the total had reached 200 million, which was up from just 15 million in 2010.
Library patrons and students went digital to crack the covers of everything from Barack Obama’s memoir to young adult fiction to the latest issues of The Economist magazine—or its rival US Weekly, based on OverDrive’s lists of the most popular e-books. The Toronto Public Library alone circulated nearly 10 million titles last year, a new record, and the Los Angeles Public Library surpassed 8 million lends.
Librarians have been warning that large publishers are squeezing licensing terms on digital works, pushing for libraries to merely rent digital works, rather than allowing them to own copies as they do physical books.
“Libraries simply can no longer be forced to rent their e-book collections with restrictions and pricing that are designed to minimize the libraries’ ability to provide access to the public, while maximizing publisher profits over that library mission,” said Jennie Rose Halperin, executive director of Library Futures, a nonprofit group that launched in January 2021 to champion the right to equitable access to knowledge.
In 2019, when the House Judiciary Subcommittee of Antitrust, Commercial and Administrative Law held an investigation into digital marketplaces, the nonprofit ALA slammed the publishing industry’s practices—including those of Amazon, which sells 90% of e-books, according to industry figures.
Other high-profile challenges around e-book licensing heated up as the coronavirus pandemic took effect. In 2020, several of the largest publishers filed a lawsuit against the Open Library project of the Internet Archive, a nonprofit digital library, in part for standing up a National Emergency Library with the goal of maintaining access to works by temporarily suspending waitlists for its offerings that weren’t already in the public domain. The initiative, which was announced in March, was closed a few months later, two weeks earlier than planned, because of the publishers’ legal action. Four of the “Big Five” corporate publishers joined the suit against the Internet Archive. The brand-name publishing houses are the result of years of industry consolidation and mergers, like one between Penguin Random House and Simon & Schuster that is being challenged after a February lawsuit by the Department of Justice.
In the second pandemic year last year, e-book prices for libraries and schools stayed high as digital distribution allowed publishers to set terms that academic librarians in the U.K. called “price-gouging.” Though digital apps offer schools worldwide more flexible programs to lend out material at what the vendor OverDrive says is a lower cost-per-read, rising costs put pressure on school budgets and exacerbated a “digital divide” that affected about a quarter of all U.S. students, in the view of the National Education Association.
Closely in line with the publishing industry’s positions, ranking member of the Senate Judiciary Committee Subcommittee on Intellectual Property Sen. Thom Tillis (R-N.C.) sent a letter in May 2021 to the U.S. Copyright Office, asking for a review of the constitutionality of the Maryland law that was set to go into effect in January 2022. Policy adviser for librarians Jonathan Band countered in a comment to Publishers Weekly that the measure is constitutional and narrowly written to “prevent unreasonable discrimination” against public libraries.
In September, Sen. Ron Wyden (D-Ore.) and Rep. Anna Eshoo (D-Calif.) took a step to look into the pricing practices of the largest publishers, requesting information about the business in a letter. “The exorbitant costs and burdensome restrictions of these e-book contracts are draining resources from many local libraries,” the members of Congress wrote.
Battles Over State Laws
Bills seeking to establish fair licensing terms for e-books are under consideration in six states, with the language of bills in Massachusetts, Missouri, and Rhode Island designed much like the Maryland bill that is now being challenged in court.
As it fights against these bills, the AAP and its affiliated groups, backed by massive corporations, have far more money and resources to apply to their legal work, and have spent far more on lobbying efforts and political contributions.
Last year, the AAP’s federal lobbyists who worked on the issues of “public access to peer-reviewed journals” and “U.S. Competition and Innovation Act (provisions related to publications)” included Shelley Husband, who was general counsel for the House Committee on the Judiciary from 2013 to 2019. Previously, she was chief of staff to former Republican House member Bob Goodlatte of Virginia, who after retiring in 2019 registered in 2020 as a lobbyist and who also lobbies for AAP on “Intellectual property issues related to copyright of published materials and government regulation of those publications.”
Husband, who is AAP’s senior vice-president, government affairs and special projects, helped in 2003 to launch the bipartisan Congressional International Anti-Piracy Caucus, which was chaired by Goodlatte and then-Senator Joe Biden. In 2014, the two members of Congress told tech and entertainment industry attendees at a Motion Picture Association of America event that they would push for stronger IP rules abroad. As the former chair of the House Judiciary Committee, Goodlatte often worked on copyright reform policy and championed the Stop Online Piracy Act (SOPA). The TV, music, and movies industry donated almost $600,000 to Goodlatte’s campaigns over his career.
Another AAP lobbyist is Marla Grossman, a partner at bipartisan government affairs firm ACG Advocacy, touted on their website as “an “industry insider” and dubbed “The Influencer.” Grossman reported lobbying in 2021 with the firm for a number of members of publishing industry group the Copyright Alliance, including News Corp and publishing company RELX. Grossman recently lobbied for the AAP on issues including “Copyright Reform, Copyright Office Modernization, and International IP Enforcement,” according to Senate records.
The AAP had a budget of over $8.5 million in 2020 and nearly $5.8 million in 2019, according to IRS information available on ProPublica. The AAP spent $2 million on lobbying in 2021, according to OpenSecrets, and nearly $3.3 million the year before, most frequently mentioning working on issues of copyright, patent & trademark in its filings. Since Biden joined the Democratic presidential ticket in 2008, AAP’s lobbying spending has totaled almost $18.5 million, according to a tally of OpenSecrets data.
“It’s unconscionable that trade organizations that purport to support artists and creators are spending so many resources fighting librarians who are simply trying to get better access to resources for their communities,” said Halperin.
In seeking to spike state e-book laws, the AAP has gotten assistance from its big-tent lobbying group the Copyright Alliance, which represents media companies and publishing industry groups ranging from the National Association of Broadcasters to NBCUniversal and Disney. The Copyright Alliance wrote in January, opposing the state bills introduced on access to e-books, “Due to the federal subject matter of copyright law, only the federal government has the ability to enact copyright legislation.” The group is urging states to follow New York in rejecting the bills.
Some Copyright Alliance members are prominent brand names: the National Basketball Association, the National Football League, Netflix, and Sony Pictures. Some are tech giants, like Adobe and Oracle. The group counts as a member the behemoth National Association of Realtors (NAR), which was the second-highest spender on federal lobbying last year, according to OpenSecrets, and the top spender in all of D.C. the year before.
The realtor group’s interest in copyright lobbying stems from its Multiple Listing Service, or MLS, a technology that enables real estate brokers to share information about properties being sold, and recently has been hit with lawsuits calling it anticompetitive and price-inflating. In the fourth quarter of 2021, the NAR lobbied on the issue of copyright reform, specifically a “discussion draft” of the Digital Copyright Act of 2021, an overhaul measure developed by Sen. Tillis, an industry ally on copyright.
Copyright Alliance members the MPAA, the Recording Industry Association of America (RIAA), and News Corp have been among the groups lobbying most frequently on copyright issues over the past two years.
For the past few years, the Copyright Alliance has donated $50,000 annually to the George Mason University Foundation, where it is listed as a financial supporter of the Center for Intellectual Property x Innovation Policy (C-IP2) at GMU’s Antonin Scalia Law School along with pharmaceutical industry interests that track IP issues. The center’s former deputy director, Kevin Madigan, is now VP, legal policy and copyright counsel at the Copyright Alliance, and is a federal lobbyist for the alliance, recently on the issue of “Scope of copyright protection.”
The Copyright Alliance and the Association of American Publishers did not respond to inquiries about their federal lobbying goals or AAP’s lawsuit against the Maryland law.
Publishing Industry Donations
The typical influence playbook in D.C. is for special interests to make campaign contributions, both from lobbying groups and their members, to help gain access to politicians and secure special hearings for their lobbyists. Further contributions made to PACs, leadership committees, and party groups help ensure favorable treatment throughout the legislative and policy making process.
In the 2020 cycle, the PACs of Copyright Alliance members made over $31 million in federal contributions, according to a Sludge review of Federal Election Commission data from the nonprofit Code for Democracy platform. This sum includes over $6.5 million given to the Senate Leadership Fund, a super PAC affiliated with Republicans, by the National Association of Realtors Congressional Fund in October 2020. Numerous party groups like the Democratic National Committee (DNC) and the Republican National Committee (RNC) each received into the six figures in donations from Copyright Alliance member PACs last cycle.
Employees of Copyright Alliance members made over $3 million in contributions in the 2020 cycle, in Sludge’s review. They skewed Democratic in their individual donations, with top recipients being the Biden presidential campaign and House Democrats’ joint fundraising committee, Hold the House. Employees donated hundreds of thousands of dollars as well last cycle to their company PACs, like those of Universal Music Group and Sony Pictures.
Sen. Tillis has received over $257,000 from the PACs of Copyright Alliance members, including $85,000 from Comcast, $50,000 from the National Association of Realtors, and $39,000 from the National Association of Broadcasters, according to Sludge’s review of FEC data. The alliance mentioned Tillis for “very special thanks” for helping to pass the industry-supported Copyright Alternative in Small-Claims Enforcement Act (CASE Act) as part of the end-of-2020 omnibus funding bill.
Halperin says that the industry’s spending on lobbying combined with the new Maryland lawsuit has created a chilling effect on measures that are widely supported.
“We’ve seen a coordinated effort by industry to silence or scare librarians over time, particularly from big vendors threatening their jobs or patron resources.” Halperin said.
“It often feels like we’re playing a different game, and that the rhetoric around the copyright and licensing battles have been fully co-opted by the rights holders,” Halperin said. “But we continue to see evidence that these ‘partners’ are huge corporations that aren’t working for the public good. The internet, digitization, digital delivery has been a part of our lives for the last 20 years, and big publishing has pushed libraries, our staff, our collections, and our mission to the sideline. They have separated us, through law, policy, and licensing, from our mission to serve our patrons. That’s not the future any of us want.”