Analysis of Consumer Issues and Paths for Concrete Approaches Dr. Carsten Orwat

1. Analysis of Consumer Issues and Paths for Concrete Approaches Dr. Carsten Orwat Forschungszentrum Karlsruhe in the Helmholtz Association, Institute for Technology Assessment and Systems Analysis, INDICARE Project Co-ordinator EU DRM Workshop, Brussels, 6 April 2005

2. INDICARE Project • The Informed Dialogue about Consumer Acceptability of Digital Rights Management Solutions in Europe • Open dialogue of stakeholders • Stimulated by insights from science and practice http://www.indicare.org Funded by European Commission under the eContent Programme

3. Background Common Sense: • Consumer acceptability is key for business success • Consumer confidence and trust in services is pivotal • Several deficits in consumer acceptability can be observed Underlying sources for this presentation: • INDICARE State-of-the-Art Report and comments by experts • Articles of online-journal "INDICARE Monitor" • INDICARE workshops

4. Consumer Issues - Overview • Access and usages • Transparency • Interoperability • Privacy Not considered in this presentation, but also important: • Flexibility in business models • Security and hardware issues • Issues of consumers with special status: • Consumers with disabilities • Libraries, scientists, and educational institutions

5. Access and Usages - Problems • No statutory consumer rights • Risks that contract terms override consumer rights • Uncertainty about legality of uses • Uncertainty about future usability of purchased content • Concerns that DRMS may hinder use of content of public domain

6. Access and Usages - Solutions under discussion • Definition of enforceable consumer rights that can not be overridden by contract terms or technical measures • E.g. definition of "numbers" of legal private copies, of "friends" for sharing etc. (at best harmonised in EU) • Better consumer experience by commercial use of P2P networks ("superdistribution") • Sharing of legally acquired files closer to consumer expectations • Utilisation of recommendation mechanisms • Consumers become resellers

7. Transparency - Problems • Low consumer awareness of DRM applications • Consumer representatives demand for more information on how DRMS are employed • Transparency problems in end-user license agreements (readable only after purchase) • Problem of information complexity and overload at the visible layer

8. Transparency - Solutions under discussion • Clear, condensed, standardised contract information before purchase needed • Labelling of “Fair Terms”, such as: • Respecting fair contract terms • Respecting advanced data protection and privacy standards • Respecting “true” interoperability • Granting long-term usability of purchased content

9. Interoperability - Problems • Use of files on different platforms and devices expected • Lock-in strategies by vendors • Misleading "interoperability" label (only selected devices) • Danger that seemingly "open" standards can be captured by single parties; risk of licensing control points • Concepts of "authorised domain", "personal area networks", "digital home", etc.: (external) technical definition who belongs to social entities

10. Interoperability - Solutions under discussion • Fully open standards with no proprietary extensions demanded • Concepts of "authorised domain" et al. need closer consideration, especially regarding privacy and consumer sovereignty issues

11. Privacy - Problems • Potential of DRMS to monitor product usages, intellectual behaviour, and tastes/habits of consumers • Especially by unique identifiers and tracking options • Often unknown to consumers and without any implied consent • Especially online: reporting back, persistent usage control, remote revocation • Many DRM types with different implications (also DRM without privacy issues such as DVDs)

12. Privacy - Solutions under discussion • Precise definition of legal information collection and management regarding DRM-based services • Constant observation by data protection authorities and privacy advocates (before market entry) • Granting anonymous access (e.g. by Trusted Third Parties) • Privacy rights management (PRM), definition of ownership of personal data and access rights • Self-commitment/self-regulation by vendors • Pre-purchase information for consumers about company activities

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14. Business Models • More choice for consumers in ways to purchase • Product differentiation and price discrimination need considerations by competition/anti-trust authorities • For instance, regional price discrimination • Options for reselling DRM-based products demanded • Danger of closed distribution concepts (control of complementary products) • High costs of licensing DRM technology adverse for SMEs and individual creators (competitive disadvantage) • Implications for competition, price level, products and cultural diversity, as well as choice for consumers

15. Security and Hardware Issues • Potential conflicts between DRM software and other software (e.g. protection software) • New vulnerabilities: DRM relative open for external attacks, less control of security by consumers • Unresolved concerns of "trusted computing" • Exclusion of platforms (e.g. Linux)