One of the realisms consumers have to deal with today in our growing e-commerce market is the fact that you no longer “own” certain products when there are a bunch of legal boondoggles going on in the “licensing” arena. This, enforced with DRM and “remote access” from companies like Amazon, takes away the ownership label you like to slap on your e-books and mp3’s and instead changes it to “rented”, though the purchaser may not even be aware of this.

How can this happen, one may ask. How do they get away with it?

Simple. Nobody reads their contracts.

In 2005 I began to build my mp3 collection. I had previously burned roughly 800 CD’s that I owned onto my computer so I could write to a bunch of different music and never have to change CD’s. It was nice, but eventually I purchased a new computer and had to swap everything over. As you can imagine, it was a hassle. Over 12gb of memory was dedicated to music alone. That was, at the time, an obscene amount of music. Nowadays it’s the typical college students playlist for studying (or a SF author’s playlist, whatever).

But my cell service was through Verizon and they had this deal with Rhapsody: unlimited downloads of music for $19.99 a month to your cell bill. Well, my cell phone bill wasn’t too bad, so I agreed to go do it. I downloaded as much as I could manage and listened. But then I got the reality bit I ignored in my contract: the $19.99 a month allows you access to the music. Each download costs an additional amount more.

Needless to say I was peeved. I paid the bill and soon after cancelled the Rhapsody account. Now, because I paid the amount owed, including three months of $19.99 membership, you would think I own the music I downloaded and paid twice for. Well, no.

Under Rhapsody’s “license” agreement, I only “rented” their music. Once I cancelled my account, the DRM-protected files would no longer play. A message would come up in my player stating “If you would like to purchase the music, please download Rhapsody”. Since I had already purchased the music (TWICE!!!), I was a bit miffed. I called their customer service department, who shuttled me to Verizon, who shuttled me back to Rhapsody, who put me in touch with their billing dept., who then shunted me back to customer service, who then hung up on me. I tried again a second and third time but at each point my call would be “mistakenly” dropped. I threw in the towel and surrendered, knowing I would never see that money again.

Media Shift explains why places like Amazon and Rhapsody get away with this in an article here. Here is a small excerpt (Thanks to Anji for pointing this out to me):

The copyright first sale doctrine has its origins in a dispute that arose when the publisher of a copyrighted novel sought to preclude dealers who purchased copies of the book for resale from reselling it at a price lower than that stipulated by the publisher. The publisher relied on language that was printed on the inside cover of the book that established a specific retail price and stated that dealers were not licensed to sell it at a lower price, and that a sale at a lower price would be treated as an infringement of the publisher’s copyright. In Bobbs-Merrill Co. v. Straus, the U.S. Supreme Court concluded that this notice did not give the publisher the right, under copyright law, to limit subsequent sales of the books by the initial purchaser. The ruling in Bobbs-Merrill Co. v. Straus was subsequently codified in what is now Section 109(a) of the Copyright Act, which states that “the owner of a particular copy or phono record lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phono record.”

This is why when people complain about Amazon removing copies of books from their Kindle, I remind them (gently, for a scorned reader is a persnickety person) that the user agreement within Kindle and Amazon allows for this to happen. Amazon had tried to pare it back some and not remove many books, but occasionally they are hit with a “cease and desist” letter from a publisher who is trying to claim their copyright back on a certain book. Amazon, wishing to avoid a lawsuit (which they would probably win but lose because lawyers are expensive), gives in and removes the book without notice. This usually causes and uproar with thousands of people screaming at Amazon.

Now think of the way how iTunes works. Does your iTunes player play music after you’ve cancelled your subscription?

People need to read the contracts in order to protect themselves. Too often consumers are the ones who lose when they are unaware of legalese which states that the product they just purchased isn’t really theirs.