Eight top Internet advertising networks will participate in a scheme for reducing ads that they place on pirate sites — websites that exist primarily to attract traffic by offering infringing content as well as counterfeit goods.  The Best Practice Guidelines for Ad Networks to Address Piracy and Counterfeiting document, announced on July 15th, specifies a process modeled on the US copyright law’s notice-and-takedown regime, a/k/a DMCA 512: a copyright owner can send an ad network detailed information about websites on which it placed ads and that feature pirated material; then the ad network can decide to remove its ads from the site.

Although this scheme may result in some ads being pulled from obvious pirate sites, it has several major shortcomings.  First of all, because this is a voluntary scheme, ad networks don’t risk legal liability for failing to comply with takedown notices, as they do under the DMCA.

So how will compliance be enforced?  Consider this: the companies that have signed on to these guidelines are 24/7 Media, Adtegrity, AOL, Condé Nast, Google, Microsoft, SpotXchange, and Yahoo!.  These companies have agreed to have the Interactive Advertising Bureau (IAB, the trade association for internet advertising) monitor them for compliance.  The largest six of these eight companies have seats on the IAB board.  In other words, this is rather like foxes agreeing to be monitored by the American Fox Association for compliance with henhouse guarding guidelines.

Secondly, the ad networks that are actually causing the most trouble aren’t involved.  None of the ad networks listed as the top ten worst offenders in the latest (June) edition of the USC Annenberg Innovation Lab’s Advertising Transparency Report have signed on to the guidelines.  Two of the eight that did sign on, Google and Yahoo!, were on the top 10 list when the Ad Transparency Report first came out in January but have come off since.

Another factoid: of the current worst offenders, only one (ZEDO) is a member of IAB at all.  Ad network operators on that list with names like “Sumotorrent” are surely not going to be observing these guidelines.

This extralegal agreement between the ad networks and the major content industries follows a well-trodden Washington path: government threatens to regulate industries in order to curb bad behavior; the industry to be regulated responds with a set of “voluntary best practices”; these are just barely serious enough to get government to back off and the instigators of the regulation to at least admit that it’s better than nothing.

We’ve seen this game played before many times, such as when organizations that look out for children’s interests pushed for ways to filter Internet porn and obscenities, or countless attempts to fend off substantive online privacy laws (an area in which the IAB has been heavily involved).

The Best Practices for Ad Networks were announced by Victoria Espinel, President Obama’s intellectual property enforcement czar.  That the document was actually written by the IAB is evident from its ample supply of equivocations and accountability dodges.  While it’s tempting to go through it line by line and point all of these out (I’d rather see Chris Castle do this; he’s great at picking these things apart), I’d rather focus on the missed opportunity here: instead of modeling this scheme on DMCA 512, the ad networks should have agreed to link the scheme to that law.  (The scheme does have a couple of minor links to the DMCA itself, but they are almost beside the point.)

Thanks to the Google Transparency Report and the USC Annenberg Innovation Lab, we have learned that DMCA takedown notices provide an excellent proxy metric of the most infringing websites.  The Google Transparency Report shows the number of DMCA takedown notices that Google received per month for sites in its search results.  The sites that exceed a certain threshold — say, 10,000 takedown notices per month — are all obvious pirate sites, while even the biggest mainstream consumer websites fall well below that threshold.

The Best Practices for Ad Networks could have made use of these statistics by tying ad takedowns to DMCA takedown notices received by the sites in question via the Google Transparency Report — instead of requiring copyright owners to generate an entirely new set of detailed notices under a voluntary regime with a Grand Canyon’s worth of wiggle room.  In other words, the “best practice” could have been very simple:  do not place ads on sites that generate more than X DMCA takedown notices per month.  This would accomplish the mutually reinforcing goals of reducing ad revenue for pirate sites and reducing their access to the content itself.

Even better would have been to establish a repository of DMCA takedown notices independent of the ones that Google collects for its search results.  Anyone who sends a site a takedown notice could simply send a copy to the keeper of this repository, which could be a neutral third party agreed to by the content industries and the IAB, or the U.S. Copyright Office. I have suggested adopting a standard format for takedown notices, which would facilitate this process.

(Such a repository could be supported by fees from copyright owners who submit large numbers of takedown notices, so that individuals and small copyright owners wouldn’t have to pay, and as a deterrent of abuse.  The fees would be much smaller than those charged by the piracy monitoring services that big media companies hire, which could submit the notices to the repository and bundle the fees into their own.)

The IAB generated the Best Practices for Ad Networks under pressure from Big Media lobbying groups as well as the White House.  But neither of these entities put money in ad networks’ pockets; advertisers do.  The result would undoubtedly have been stronger if actual advertisers had added their voices to the process, though none appear to have done so.

Musician David Lowery, a longtime fighter against ad-sponsored piracy, has identified a few large advertisers that have taken steps to mitigate their involvement with pirate sites, such as here (Starbucks, Costco, Walmart), here (Coca-Cola, Pepsi), and here (Levi’s), but these are few compared with the many brands that keep advertising on them.  Lowery and others do their best to shame consumer brands into awareness over this issue, but the amount of real change will depend on how much that shame translates into real involvement.  As always, it’s best to follow the money.