In 2005, an organization had been covertly installing a program similar to a rootkit onto consumer devices without warning. For those who haven’t heard it before, a rootkit is simply a program that is designed to remain unfindable on a device. They aren’t all bad, but their difficult-to-detect nature and ability to evade even aggressive anti-virus makes them a top-of-the-line tool for hackers. Back to the story.
The rootkit was on the lookout for ‘suspicious activity’, and if it detected any, it would quietly alert the parent company. However, even if you had nothing to hide, you still had something to fear: the rootkit left a gaping security hole, and a smart enough hacker could piggyback off of it to get Trojan Horses, Worms, and other nasty bugs in without alerting the computer that “hey, there’s an .exe file doing weird stuff!”
The rootkit was designed to hide itself, and it would hide the bugs behind it. There was no mention of this anywhere in the EULA agreement for the program that had the rootkit. The parent company hadn’t meant to leave a backdoor, but they did, and attempts to fix it without removing their own program just made the problem worse. Attempting to fake fixing it with an uninstaller only hid the program deeper in the system, and trying to uninstall it could brick the computer, depending on which program you got. They’d really screwed themselves, and they hadn’t expected to get caught.
This wasn’t some Russian hacking scheme, or some government overreach – it was Sony, attempting to keep copyrighted material off of pirating websites. Talk about an overreaction.
The History
At some point, a company has to admit it would rather ruin the legitimate user’s experience than let a pirate go unpunished. That’s very understandable: stealing is wrong, and smug pirates behaving like they’ve gotten one over on ‘the system’ are frustrating. Ordinary responses to this can be anything from asking for the license # on the inside of the clear case to more subtly ruining the audio quality of pirated copies. This is a normal level of copyright protection. Very determined pirates could still get around these measures, but hey, you can’t spend all your resources on the fringe cases.
Companies are aware of this, and some begin to factor ‘unstoppable piracy’ into their calculations – you know, like grocery stores will factor in ‘lifting loss’ and spoiling produce. Companies usually determine they’d be spending more on preventative measures than they’d be keeping on the shelves. Theft is wrong, but so is littering and driving without a license. Somehow, all three still happen anyway. Sony is very mad that pirates are getting away with fresh content, and they want to do the equivalent of TSA pat-downs on everybody at the exit of the grocery store to stop a small percentage of thieves. They don’t care anymore; nobody is going to get away with it.
Was it Reasonable?
Napster and LimeWire are making inroads into the music industry’s profit, and 2005 was the peak. The pirating of copyrighted content is only made easier with the rise of the internet, and Sony realizes it’s nigh impossible to find the illegitimate downloaders, and uploaders were only marginally easier. They decide to go for the source, but they decide to hit hard.
“The industry will take whatever steps it needs to protect itself and protect its revenue streams… It will not lose that revenue stream, no matter what… Sony is going to take aggressive steps to stop this. We will develop technology that transcends the individual user. We will firewall Napster at source – we will block it at your cable company. We will block it at your phone company. We will block it at your ISP. We will firewall it at your PC… These strategies are being aggressively pursued because there is simply too much at stake.” – Sony Senior VP Steve Heckler
This quote was said in 2005, after Sony had merged with another company, BMG. BMG had an incident in Europe in the 2000’s, when they’d released a CD without warning users of the copyright protection on the inside. Apparently, burning money to replace those CDs (and burning goodwill) was not enough of a lesson, and Sony and BMG together prepared to take a stand against pirates.
The Problem
They’re going after the big boys, the folks downloading music to upload everywhere else…for free.
These are the people depressing profits, in theory. Some companies theorize that once these people are gone, the people passively pirating by downloading stuff from them will also disappear and go back to buying the content. They’re somewhat right, and this audience shrinks over time. More on that later.
This is illegal and very annoying! The estimated lost sales from piracy were in the billions, and many companies were beginning to look at more intense DRM: Digital Restriction Management.
To some people, DRM is the root of all evil, the seed of the eventual downfall of consumer’s rights. After Sony’s screw-up, they were right to call it as such. John Deere, Apple, Sony, Photoshop, etc. are all slowly eating away at their own best features for the sake of pushing users into proprietary software. Software they’re not allowed to repair because of DRM. Take Deere: if a new Deere tractor detects a common tractor repairman’s diagnostic software, a Deere tractor will stop working until you call out a Deere technician. This obviously drives up demand for Deere technicians, and it’s horribly restrictive to the user. Lawsuits are in progress right now over this because the obvious result is that Deere can cost you your farm by doing this.
To others, DRM is an essential part of the free market. Companies should be allowed to protect what they made, and if users find their methods extreme, they shouldn’t have bought it. And in less extreme circumstances, they’re right! That’s what the EULA, the End User License Agreement, is for. The user can decide if they’re willing to put up with the DRM specified in the Agreement, and if they’re not, they don’t have to buy it. ‘If you pirate this, it will only play static’ is reasonable.
Sure, some super-cheapskate who found a sketchy download off some sketchy site is going to listen to static with Hint of Music, but the average user would rather buy the disc and be done with it. If the company can make the ripped upload sound like garbage when it’s off its home CD, they won. The company has successfully used DRM here to keep their honest customer honest, and any would-be pirates away. And they did it without destroying either computer! As Stewart Baker of the Department of Homeland Security said, “it’s your intellectual property – it’s not your computer”.
Doing it this way means normal consumers still get a high-quality product, and if the DRM is limited entirely to the content itself, there’s no risk of it coming back to bite the company in the butt.
Still, if you really disagree with DRM, there were companies that successfully reduced their piracy problems in other ways. Some found that guilt was enough, others found that once certain websites were gone, their piracy problems disappeared too. Warning folks that piracy was still a crime got the people who didn’t know any better to stop. Fines did a number on the folks who were too bold or too dumb to not get tracked with non-DRM means, and for the people who were doing it because it was more convenient? They reduced their pirating when better paid methods became available. Sony’s problem could have been solved in a lot of ways!
Besides, Sony wasn’t struggling. Lost sales are not the same as losses! Companies are still making profit, just not as much as they’d like. Property is not being damaged, and nobody is experiencing physical harm as a result of pirating.
The Response
Sony’s DRM was a severe overreaction to the problem at hand, and it did lead to several lawsuits. As said at the beginning, Sony had not only installed software without the user’s knowledge, but they’d then left a big entry point for security threats to get in undetected. Hundreds of thousands of networks were affected, and some of them were government. Once someone blew the lid on the DRMs, they released a cover-up “uninstaller” that just hid the rootkit better and installed more DRM content on the user device.
This does not help!
The blown cover for the rootkit meant that black-hat hacking organizations could tool around and create something that could get into anything with that rootkit on it, undetected. Eventually Sony was forced to admit this was wrong, but not before screwing over a couple million people who just wanted to listen to Santana or Celine Dion from a CD they paid for. Over pirates.
Yeah, there’s some lost profit – but it doesn’t outweigh the regular customers.
The Aftermath
Sony’s first instinct is to hide it. As mentioned in the article above, the uninstaller available didn’t actually uninstall it, and some users reported issues of system crashes and their machine bricking up when the uninstaller’s poor programming tried to interact with the rest of the device’s programming.
Their second decision is to lie – ‘the DRM has no backdoors and doesn’t pose a risk to your computer’s security’. This is demonstrably untrue, and given that they were already in the beginning stages of recall, could be considered a deliberate lie.
Sony’s third action is to recall the discs with the DRM on it, but they don’t get all of the discs. Some users aren’t sure if their disc is affected or not, and even non-profit organizations dedicated to maintaining free internet can’t figure out what discs have it and what discs don’t. The best they can do is a partial list. Stores in New York and Boston are still selling the discs three weeks after the recall. However, users do get to swap their disc with an unprotected one through the mail. Sony seems to have acknowledged their screw-up at this point.
Sony’s fourth action is more a consequence – they stick a class-action lawsuit sign-up notice on their home website, and users affected can claim damages up until 2006. Class-action lawsuits filed by individual states start to drag down Sony’s profits more than the piracy ever did, and the end result is a mandate to put warnings on the cover of discs and to stop using DRM that could damage a user’s computer. DRM is still allowed, it just can’t be possible to destroy a computer to protect a song license. The feds actually considered this a breach of federal law and stated that it was engaging in deceptive and unfair business practices. Sounds about right – consumers wouldn’t have bought a disc that downloaded DRM without their knowledge. From conception to execution, this was a moral, ethical, and legal mistake. While pirating is wrong, it’s possible to be more wrong trying to stop it.
