Florida Statute § 501.155: Florida’s New Accountability Law for Third-Party E-Commerce Vendors

Robert H. Thornburg, October 9, 2015

The True Origin of Digital Goods Act  (“Act”), recently codified on July 1, 2015 as Florida Statute § 501.155 et seq, makes it illegal for any retailers whose primary business is distributing commercial music to withhold their contact information on their websites.   The underlying bill that became the Act was overwhelmingly passed in Tallahassee with significant support coming from the Recording Industry Association of America (RIAA).  Upon passing the bill, RIAA Chairman and CEO Cary Sherman noted:  “This bill is a major step forward in preserving the integrity and transparency of today’s internet environment.”  Likewise, Florida Attorney General Palm Bondi noted the law allowed Floridians:  “to protect themselves against websites that distribute music content illegally.”

The underlying purpose for the Act is to allow customers to know who is ultimately providing the music in order to contact the underlying website owners.  Often, websites directed at e-commerce hide their ownership identity through domain name proxy services – leaving the consumer unable to know their true owners.

There are a lot of illegal trade practices and piracy governed businesses in todays Internet environment. According to the Recording Industry Association of America (RIAA), “Frontier Economics recently estimated that U.S. Internet users annually consume between $7 and $20 billion worth of digitally pirated recorded music.”  An analysis by the Institute for Policy Innovation concluded that “global music piracy causes $12.5 billion of economic losses every year.”  This Act not only allows content creators to know who is distributing their works illegally, but also aids consumers in their background research while shopping for music online and help prevents consumers from scams.

Although the advancement of technology has improved consumers’ access to music, the end affect has often been detrimental to the underlying artist’s overall income – most notably in the music industry.   One glaring example of this is the rise of digital streaming and digital downloading of music.   While this has increased the ability for artistic content to be distributed to consumers, it has almost obliterated traditional methods of distribution of musical works.   Case in point – CD sales, which was a large income source for musicians.  According to a recent Nielsen Music Report, the music industry’s leading data information provider, total album sales went down 11.2% in 2014 from 2013, while on-demand streaming went up by 54%.

Because of this, knowing the true identity and owners of digital download sites, streaming sites, and related content sources has become paramount in ensuring that musical works are appropriately licensed to allow artists the ability to monetized their musical works.  Florida’s True Origin of Digital Goods Act does just that.

The Act is detailed and specific that any website offering on-line music must include on its home page (or alternatively in the “about,” the “about us” or the “contact” sections) detailed ownership information.  Failure to do so may result in a declaratory action under the Act seeking not only injunctive relief against the website owners regarding such violation, but the ability to collect and obtain not only reasonable attorneys fees but also any and all “necessary expenses” which could potentially include pre-suit investigations regarding the violation.

Moreover, the Act provide standing to sue for such declaratory relief for a variety of music industry groups to bring a private cause of action – including the underlying music artist, the recording studio, the distribution groups, the record labels, as well as any owner, assignee, authorized agent or licensee of any commercial recording or audio visual work that is electronically disseminated.

If you believe that someone has a website that is allowing for download or streaming your music or audio visual work, where that website does not allow identification of its ownership or source, please contact the firm to discuss your legal rights.

By Chelsea Lockhart & Robert H. Thornburg