DMCA safe harbor is a failure driving market consolidation – owners weaponize compliance costs
Eric Goldman, 2021 – professor of law at Santa Clara Law. “The SHOP SAFE Act Is a Terrible Bill That Will Eliminate Online Marketplaces” Technology and Marketing Law Blog, 9/28, https://blog.ericgoldman.org/archives/2021/09/the-shop-safe-act-is-a-terrible-bill-that-will-eliminate-online-marketplaces.htm //DH
Too Many Defense Factors Makes the Defenses Unwinnable. More generally, to avoid the new cause of action, online marketplaces must win each and every one of the 13 preconditions (many of which have subparts). In other words, they must do everything perfectly AND prove all 13 elements to the court’s satisfaction. Safe harbors with that many prerequisites are extraordinarily costly because the plaintiffs can contest each element and engage in expensive discovery related to them. The DMCA online safe harbor has functionally failed for this reason; it’s too expensive for startups to prove they qualify, and copyright owners can weaponize those costs intentionally to drive entities out of the industry. This has turned the DMCA online safe harbor into a sport of kings; so only larger companies can afford it, which has exacerbated the concerns about “Big Tech” market consolidation. The SHOP SAFE Act replicates the structure that failed in the DMCA online safe harbor, so it’s predictable that the SHOP SAFE defenses also will fail to help out online marketplaces, leaving them highly vulnerable to the new cause of action.