FTC: Digital Rights Management Software Use Requires Disclosure

Companies that bundle music, movies and games with digital rights management software must prominently disclose information about such software to consumers, a Federal Trade Commission official warned last week. "Hard to notice, mouse-print-type disclosures using cryptic terminology is not sufficient," said Mary Engle, acting deputy director at the FTC. "As a market for digital media evolves, it becomes even more important for consumers to know and understand the nature of what they are paying for." The FTC convened the town hall meeting, held in Seattle last week, to explore how digital rights management technology affects consumers. Engle said the FTC wasn't trying to weigh in on the merits of the software, which limits consumers' ability to make copies and, in some cases, play media on their choice of devices. But many of the speakers were anything but neutral about such technology. Corynne McSherry, an attorney with the Electronic Frontier Foundation, told the FTC that digital rights management software threatens consumers' ability to use media. "Fair use means that you can do things like buy a CD and take it home and play it on various different devices and play it in the background in your kitchen and your toddler can dance to it and then you can put a video of the toddler dancing up on YouTube," McSherry said. "Unfortunately, DRM (digital rights management) can interfere with those expectations."