In today's CMU Daily: TikTok has begun the process of trying to scupper the big sell-or-be-banned law recently passed by American law-makers. The law is both unrealistic and unconstitutional, TikTok says in a new legal filing made with the US courts yesterday

One Liners: BRIT School, Rough Trade, Marshall deals; Restore The Music ambassador; Astroworld trial; Pomitni joins IMPALA; Generator x MMF; Gabb Music+; ARIAS winners; HOME co-working; Amy Winehouse BRIT Billion; Travis Scott UK shows; Blur documentary; new music from Hinds, Koreless, Kokoko!, Keeley Forsyth

Also today: Which? has called on OfCom to use powers granted by the UK Online Safety Act to force Facebook to crack down on ticketing scams; European anti-ticket touting campaigners welcome a ruling against Viagogo in New Zealand, but say the eight year investigation by that country’s Commerce Commission demonstrates the need for better regulation of ticket resale

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TikTok sues the US government over sell-or-be-banned law

The TikTok targeting sell-or-be-banned law recently passed by US Congress is both unrealistic and unconstitutional, says TikTok, which yesterday formally launched legal proceedings against the US government in a bid to overturn the act that introduced the law. It's the “sell” bit that is unrealistic, while the “be banned” outcome is unconstitutional.

“For the first time in history, Congress has enacted a law that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than one billion people worldwide”, says the legal filing.

“Banning TikTok”, it continues, “is so obviously unconstitutional, in fact, that even the act’s sponsors recognised that reality, and therefore have tried mightily to depict the law not as a ban at all, but merely a regulation of TikTok’s ownership”.

It is true that supporters of the new law, when debating the measures in Congress, were keen to stress that the most likely outcome of the legislation was a change in ownership at TikTok. That would mean China-based ByteDance selling TikTok or at least its US business.

Although other concerns have been raised about the video-sharing app in political circles, including how it deals with harmful content, the sell-or-be-banned law was primarily motivated by the allegation that the Chinese government has access to TikTok user-data via ByteDance.

The insistence that ByteDance would ultimately sell the app to comply with the law was partly to allay the concerns of TikTok's American creators and users, but also partly to counter arguments the anti-TikTok measures violate the First Amendment of the US constitution.

Throughout their lobbying campaign, TikTok’s bosses and lobbyists insisted that ByteDance would not - and even could not - sell TikTok. Some reckoned that was a simple bluff to try to rally the support of TikTok users in the US against the legislation. However, sources at ByteDance told journalists that the company really would rather shut down in the US than sell the app.

The new legal filing sets out various reasons why selling TikTok, even just in the US, isn't practical: commercial reasons, technical reasons and legal reasons.

Commercially speaking, it argues, the TikTok experience is all about content being shared around the world. But “a divestment of the US TikTok platform, without any operational relationship with the remainder of the global platform, would preclude the interoperability necessary to make international content seamlessly available in the US market and vice versa”. Therefore splitting off TikTok US would make the platform unviable.

Technically speaking, it claims, if some or all of TikTok’s code and algorithm were sold to a different company that, by law, could not interact with ByteDance, “it would take years for an entirely new set of engineers to gain sufficient familiarity with the source code to perform the ongoing, necessary maintenance and development activities for the platform”.

Legally speaking, any sale would likely be blocked in China. “The Chinese government has made clear that it would not permit a divestment of the recommendation engine that is a key to the success of TikTok in the United States”, it explains. “Like the United States, China regulates the export of certain technologies originating there. China’s export control rules cover ‘information processing technologies’ such as ‘personal interactive data algorithms’”.

Elsewhere in its legal filing, TikTok is keen to present itself and ByteDance as global enterprises founded by Chinese entrepreneurs, rather than as a Chinese app controlled by a Chinese business. TikTok US, it says, is run by “TikTok Inc, a California-incorporated company that has its principal place of business in Culver City, California and offices in New York, San Jose, Chicago, and Miami, among other locations”.

As for its parent company, “approximately 58% of ByteDance Ltd is owned by global institutional investors (such as BlackRock, General Atlantic and Susquehanna International Group), 21% is owned by the company’s founder (a Chinese national who lives in Singapore), and 21% is owned by employees - including approximately 7000 Americans”.

TikTok has constantly denied the data security concerns raised by politicians across the world. In the US, it has also repeatedly highlighted its work with American company Oracle to put in place new systems and safeguards to reassure politicians and government officials about how user-data is managed, work that has been developed in consultation with the US government.

The legal filing - keen to present the new law as a badly thought out knee jerk reaction by a Congress that failed to identify and consider specific problems and solutions - talks up that existing work, which is often referred to as Project Texas.

TikTok, the filing states, has “voluntarily invested more than $2 billion to build a system of technological and governance protections to help safeguard US user data and the integrity of the US TikTok platform against foreign government influence”. It has also “made extraordinary, additional commitments in a 90 page draft National Security Agreement developed through negotiations” with the US government’s Committee On Foreign Investment In The US.

“Congress tossed this tailored agreement aside, in favour of the politically expedient and punitive approach of targeting for disfavour one publisher and speaker (TikTok Inc), one speech forum (TikTok), and that forum’s ultimate owner (ByteDance Ltd)”, the legal filing continues, adding “Congress provided every other company - however serious a threat to national security it might pose - paths to avoiding a ban, excluding only TikTok Inc and ByteDance Ltd”.

It then concludes, “Congress must abide by the dictates of the Constitution even when it claims to be protecting against national security risks. Congress failed to do so here, and the act should be enjoined”.

There are no real surprises in TikTok’s filing and supporters of the sell-or-be-banned law have previously insisted that it is written in a way that should ensure it is deemed constitutional by the courts. However, TikTok has successfully blocked previous attempts to ban the app in the US - by former President Donald Trump and more recently the state of Montana - on constitutional grounds. Not all the arguments used in the previous cases are relevant here, but some are.

We will now see to what extent those arguments work this time round.

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ONE LINERS

Travis Scott, BRIT School, Blur + more

DEALS

The BRIT School has announced that collecting society PRS For Music has agreed to enter a new partnership with its music department. “The partnership will enable The BRIT School to remain free to all performing and creative arts students, as the two organisations work together to develop and nurture the talented individuals who enrol at the school”, says a statement.

The Rough Trade independent record store chain has announced a new partnership with Cambridge Audio, updating the sound systems in its East London, West London, Bristol, Liverpool and Berlin locations. “Cambridge Audio are the perfect partner, offering unparalleled audio quality for music fans across all genres”, says Sam Allison, Head Of Events And Partnerships at Rough Trade. “With the brand’s premiere sound engineering, Rough Trade can now provide the best immersive sonic experience for customers in-store. Together, we aim to set the standard for excellence in retail audio”.

Guitar amp maker Marshall’s in-house record label Marshall Records and Peermusic have launched new joint venture Marshall Records Publishing. “The Marshall brand is synonymous with ground-breaking music”, says Peermusic’s European President Nigel Elderton. “For over 60 years, Marshall has amplified the sound of the world’s most talented artists and, for nearly 100 years, Peermusic has championed songwriters and music creators. The opportunity to align with the Marshall team is a perfect fit for our creative culture at Peermusic. We look forward to working on some exciting projects together”.

APPOINTMENTS

Pianist Alexis Ffrench has been announced as a new ambassador for music education charity Restore The Music. “It is an honour to be invited to join Restore The Music as an Ambassador”, he says. “I am passionate about universal access to music education, regardless of background, and I firmly believe in the transformative power of music”.

LEGAL

An appeals court in Texas has declined to block the court order obliging Live Nation CEO Michael Rapino to sit for a deposition in relation to the Astroworld lawsuits. The judge overseeing the hundreds of lawsuits filed following the 2021 Astroworld tragedy last month ordered the deposition, meaning Rapino must answer under oath questions posed by lawyers working for the Astroworld victims. Live Nation has worked very hard to try to stop the deposition from happening, arguing that Rapino was not sufficiently close to the organisation of Astroworld 2021 to justify such a thing. To that end, it asked the Texas First District Court of Appeals to intervene, but the appeals court has now declined to do so.

LABELS

Pan-European indie label trade body IMPALA has announced Pomitni as its first Ukrainian member. "Our country should be adequately represented in various international associations, specifically music ones”, says label founder Iryna Gorova. “Over the past two years, the Ukrainian music industry has developed significantly: the number of artists has almost tripled. And the prospects are ambitious. In order to accelerate this development and promote Ukrainian music, it is important for us to engage the experience of our European colleagues. Therefore, joining IMPALA is an important step both for the country's music industry and for us as a leading Ukrainian label”.

ARTIST MANAGEMENT

Generator has partnered with the Music Managers Forum on a new training and development programme for artist managers in the North of England. “Generator has long focused on creating sustainable and inclusive opportunities for those in our region and is aware of the changes needed to make the industry more viable and fairer for all”, says Generator CEO Mick Ross. “Partnering with MMF on this programme is an exciting development of our commitment to fostering new talent and strengthening networks in both our local and regional community”.

DIGITAL

Child-focussed technology company Gabb has launched a new premium version of its kid-friendly streaming service Gabb Music. The expanded service offers the ability to create custom playlists, search the app’s music library and listen offline. “This is the first time a music streaming service that includes all genres has been built from the ground up with kids in mind first and foremost”, says Kerri Fox-Metoyer, Gabb’s Head Of Entertainment. “It’s a streaming service that parents can trust out of the box”.

INDUSTRY PEOPLE

BSI Merch founder Andy Allen has launched a new music industry co-working space in East London - House Of Music And Entertainment, or HOME. The building on Commercial Street - intended to be the first in a network around the UK and Europe - offers desks and private offices, meeting rooms, a podcast studio, street-front retail units and an event space. “There are plenty of co-working spaces in major cities but we wanted to create something that brings the independent community together and gives them an opportunity to interact with their peers”, says Allen.

AWARDS

The winners of this year’s ARIAS radio industry awards were announced at the Theatre Royal Drury Lane in London last night. Among them, Annie Nightingale was posthumously given the Pioneer Award. See the full list of winners here.

ARTIST NEWS

Amy Winehouse has posthumously received a BRIT Billion Award to mark her music passing a billion streams in the UK. The trophy was accepted by her parents Mitch and Janis, who said in a joint statement, “We of course wish that Amy was here today accepting this award in person, but it’s amazing that she is still winning awards for her incredible talent and achievements. It’s wonderful that her music is being discovered by new audiences of young people who love it just as much as her contemporaries. We are so proud of Amy. Thank you”.

GIGS & FESTIVALS

Travis Scott has announced UK shows at Tottenham Hotspur Stadium in London on 13 Jul and (in theory) Co-op Live in Manchester on 16 Jul. Tickets go on general sale on Friday.

RELEASES

Blur will screen new documentary ‘To The End’, about their latest reunion, in cinemas around the UK and Ireland on 19 Jul. Find cinemas and book tickets here.

Hinds have released new single ‘Boom Boom Back’ featuring Beck. Their fourth album ‘Viva Hinds’ is out on 6 Sep, and they will play Lafayette in London on 13 Sep.

Koreless is back with new single ‘Seven’.

Kokoko! have released new single ‘Bazo Banga’. Their new album ‘BUTU’ is out on 5 Jul.

Keeley Forsyth has released ‘The Hollow’, the title track from her new album, which is out this Friday.

OfCom should use Online Safety Act powers to force Facebook to act on ticket scams, says Which?

Consumer rights organisation Which? has urged regulator OfCom to investigate allegations that Facebook has failed to deal with scammers hacking people's accounts and using them to sell fake tickets to in-demand concerts, including Taylor Swift's upcoming UK shows.

Which? was responding to a new BBC report about the ticket fraud scam, in which a number of people whose Facebook accounts have been hacked recounted the challenges they faced when reporting hacks to the social media company. Those challenges meant that fraudulent messages - that appeared to have been posted by the hacked Facebook users, offering Taylor Swift tickets for sale - stayed online for longer, resulting in more people falling for the scam.

“If Facebook does not respond to reports of accounts being hijacked by scammers, this is completely unacceptable”, a Which? spokesperson said. “This is exactly the type of failing that OfCom should be prepared to take strong action against using the Online Safety Act, including potentially issuing fines. The regulator must also hold platforms to a high standard to prevent these scams from happening in the first place”.

The UK Online Safety Act was passed last year and introduces new obligations for online platforms regarding harmful content. The new rules are being phased in over 2024, with the current focus being measures to protect children online. As part of that, earlier today OfCom published a draft Children’s Safety Codes Of Practice.

However, there are plenty of other new obligations in the act, especially for the biggest online platforms. That includes dealing with fraudulent advertising. The act says that platforms must have measures in place to prevent individuals from encountering fraudulent advertisements, to minimise the length of time for which content of that kind is present, and to take down such ads when made aware of them. OfCom will work on implementing that part of the act later this year.

In the BBC report, one Facebook user, Kerry Plant, tells how two of her friends lost more than £300 each after being duped by a fake Taylor Swift ticket ad posted in her name.

She says that she followed Facebook's guidance on how to report the hack, sent fifteen emails, tried contacting Facebook and its owner Meta via other social platforms, and even sent an email to Meta boss Mark Zuckerberg. She got no response. The social media firm finally acted when contacted by the BBC.

Plant says, “It’s upset me quite a bit that I've not been able to stop this happening, and that Facebook hadn't responded to me, despite quite a lot of effort”. Had Facebook responded quicker, she adds, they could have prevented more people being scammed out of money.

Responding to the BBC report, Facebook says, “We are continually investing in protections against fraud on our platforms and work closely with law enforcement to tackle this issue. We take the safety and security of our community seriously. We encourage everyone to create a strong password, enable two factor authentication and to be suspicious of emails or messages asking for personal details. We also have a feature called Security Checkup to help people keep their Instagram and Facebook accounts secure”.

Setlist Podcast: Calls for urgent new AI laws in UK and US

In this week's Setlist Podcast, Chris Cooke and Andy Malt discuss the calls on both sides of the Atlantic for new AI laws to protect creators, the big love-in between Universal and TikTok as they finally resolve their differences, and more.

Click here to listen - or search for 'Setlist Podcast'

Viagogo ruling in New Zealand demonstrates the need for tighter touting regulation, say campaigners

Anti-ticket touting campaigners in Europe have welcomed a recent court ruling in New Zealand against often controversial secondary ticketing platform Viagogo, but say that the long-drawn out legal battle shows why stronger regulation of ticket resale is required.

With the New Zealand Commerce Commission’s legal challenge against Viagogo taking eight years to go through the motions, and still subject to appeal, pan-European anti-touting campaign FEAT urges the European Union to ensure that its new Digital Services Act is used to force secondary ticketing platforms to be much more transparent about their operations. While the UK FanFair campaign says an outright ban of for-profit touting is required.

Having begun its investigation in 2016, the Commerce Commission first filed legal proceedings against Viagogo all the way back in 2018, accusing it of breaching New Zealand’s consumer protection laws.

The various issues raised by the regulator echoed complaints made about the secondary ticketing platform - by artists, politicians and consumer rights groups - in multiple other countries. In particular, Viagogo's misleading communications about the status of its ticket sellers, the total price of tickets, and its refunds policy.

Viagogo did agree to make some changes to its platform in New Zealand in order to stop the Commission seeking a preliminary injunction against it, but the core legal action continued, reaching the county's high court last year.

In its recent ruling, the court concluded that Viagogo did indeed have misleading information on its website. It also needs to update its terms and conditions to allow New Zealand customers to pursue legal complaints through the New Zealand courts. Viagogo's terms previously said legal disputes must be pursued through the Swiss courts, its corporate HQ being in Switzerland. That, the high court ruled, is an “unfair contract term” under the country’s Fair Trading Act.

Welcoming the ruling, the Commission's General Manager for Fair Trading, Vanessa Horne, told reporters, “The Commission is aware of a large number of reports from consumers who had purchased event tickets from Viagogo, booked flights and travel to attend the event, only to be turned away at the entrance when they found out for the first time that their tickets weren't authentic. This resulted in significant distress and financial impacts for consumers”.

“We took this case on behalf of every one of those Kiwi consumers and pursued this large global entity over more than eight years”, she added, “and we now have a ruling that will require Viagogo to be upfront with Kiwi consumers about what they're buying and ensure a fairer resolution system for settling disputes against Viagogo in the future”.

The regulation of ticket resale varies greatly around the world. In some places for-profit ticket touting is completely prohibited, in other countries touts and platforms like Viagogo are obliged to follow certain rules, especially relating to communications and transparency. Where such rules have been introduced, and then enforced by a regulator, Viagogo has usually ultimately complied. But, critics would say, belatedly and begrudgingly.

In the EU, anti-touting campaigners hope that the new Digital Services Act will force Viagogo to be more transparent in all member states. Asked about the ruling in New Zealand, FEAT Director Sam Shemtob tells CMU, “Whilst this is positive news for consumers in New Zealand, a large amount of time and money has been spent, with Viagogo still planning to appeal the high court’s decision”.

“Only recently, the Swiss consumer protection authority FRC settled a similar eight-year legal battle to force Viagogo to compensate consumers”, he adds. “These cases demonstrate the company’s disregard for its legal obligations to consumers, only listening when challenged at the highest levels. With the Digital Services Act promising better regulation for online marketplaces, the European Commission and member state Digital Services Coordinators must make it clear that Viagogo cannot continue to ignore the rules”.

In the UK, the FanFair campaign has long lobbied for better regulation - and the better enforcement of regulation - against platforms like Viagogo. Although more recently it has started campaigning for an outright ban of for-profit touting, something the UK Labour Party now supports.

FanFair Campaign Manager Adam Webb tells CMU, “The situation in New Zealand feels unerringly familiar from our experiences in the UK. Wherever they operate, Viagogo’s owners appear to be hardwired in their approach to legal compliance - always going that extra yard to string out proceedings, lodge pointless appeals, avoid their obligations and harbour the identity of the touts who dominate their platform”.

“This is why FanFair is now campaigning to outlaw the resale of tickets for profit”, he adds, “and why we so positively welcomed the Labour Party’s commitment made in March of this year”.