Intellectual Property and "Free" Trade

Russia has been in talks with other world leaders for some time now as to its desire to join the World Trade Organization. The deal is close to being signed, and this week it was announced that Russia would have to meet a number of imposed conditions before being allowed to join. Specifically, these have to deal with intellectual property rights. In the two-page document, popular music website allofmp3.com was specifically named as a site that would have to be shut down.

In case you're not familiar with allofmp3 (where I buy all my music), let me bring you up to speed. This site has been operating for a few years now, on quasi-legal grounds (though they are apparently in compliance with Russian laws). They offer music sales of individual songs or albums, using the encoder settings of your choice, without any DRM-type protection like the Apple Music Store, and at much lower prices. Instead of paying a flat fee per song or album, you pay based on filesize. Therefore, music encoded at higher quality will cost more, since the rate is $0.02 US per megabyte. This typically translates into songs which you can buy in better quality encoding than iTunes at less than 10 cents a song.

I've argued from the beginning that the DRM-protected $1 songs, or $10 albums from iTunes are not reasonably priced, considering the cost of new CDs nowadays. For example, the average cost of a new CD on Amazon.com today (looking at the top sellers) is between $9-12 US. Even if a new CD costs $12, it's completely unreasonable to pay only $2 less for the same album on iTunes. Let's consider the cost of manufacturing the CDs and jewel cases themselves, the booklets, transportation, cut taken by the retailer in order to pay employees, store space, and turn in a profit. Are we to believe that this all amounts to $2? Hardly. Allofmp3's prices may be on the low side, but it's far more reasonable and in line with reality than the prices the record labels want you to pay. Bandwidth is cheap nowadays, and encoding an album takes only a few minutes (on an average computer).

This brings up the question of shutting down Allofmp3. I find it fascinating to note how the WTO is such a lobby for US multinational corporate interests instead of really being involved in "free trade". It works in one direction. On one hand, the WTO has absolute power to require Russia to legislate on issues the US deems important, and on the other hand, though the WTO ruled against the United States on the Canadian softwood lumber dispute, it seemed to have no power whatsoever in enforcing the decision (such as by imposing sanctions, etc.) These are neoliberal economic policies at work. You can get on the train, but you're playing by our rules.