MPA is Concerned About Plans to ‘Outlaw’ Password Sharing Restrictions

Brazil is considering legislation that would prohibit streaming services from charging additional fees or blocking access for users outside the registered 'household'. Representing major Hollywood studios and streaming giants like Netflix, the MPA is pushing back against these plans. Such restrictions would negatively impact revenue and undermine copyright enforcement efforts, the industry group warns

Over the past few years, Brazil has worked hard to combat the online piracy problem from various angles.

The “Operation 404” campaigns, in particular, have led to numerous takedowns and arrests, with the most recent wave completed last month.

The seventh installment of the Government-backed anti-piracy sweep, details of which were released in September, took down 675 pirate sites, 14 apps, and led to nine arrests. Meanwhile, Brazilian Internet providers now block more than 6,700 domain names.

These positive piracy developments haven’t gone unnoticed. The Motion Picture Association (MPA) acknowledged Brazil’s efforts in a recommendation to the US Trade Representative, where it discusses foreign trade barriers.

“Operation 404 is a model for effective and efficient criminal enforcement measures against piracy sites and services and should be replicated by other markets within the Western Hemisphere,” MPA writes.

Piracy Challenges Remain

Despite these successful enforcement efforts, the MPA still sees room for progress, to further clamp down on copyright infringement.

“Brazil’s legitimate online audiovisual services continue to suffer from the pervasive availability of illicit, advertising-supported services, despite the increasing availability of legitimate options,” MPA notes.

MPA says that the online piracy rate and the use of illegal streaming devices continues to rise in Brazil. This, despite a report earlier this year, suggesting that web-based piracy is declining in the Latin American country.

Among other things, MPA suggests that Brazil should enact a bill that formalizes site blocking, which is currently on the table. The movie industry group also encourages the government to approve a bill that criminalizes camcording in theaters, even when there’s no profit motive.

Account Sharing Threats

In addition to bills that the MPA would like to see approved, a proposal to outlaw password sharing restrictions is seen as a threat.

Netflix began its crackdown on password sharing in Brazil last year. This led to widespread critique, including complaints that the restrictions, such as tieing a Netflix account to a home address, went too far.

According to the government’s consumer protection agency Procon, it makes no sense to link a streaming service account to a home address, when people can use these on mobile phones as well. This critique was widely shared by other lawmakers, resulting in several bills that aim to ban these restrictions.

In the ‘trade barriers’ overview, the MPA describes the proposals as problematic. In addition to hurting revenues and limiting entrepreneurial freedom, they could weaken copyright enforcement.

“Brazil’s legislature is currently discussing bills […] that intend to limit or prohibit measures taken by online subscription service providers to prevent account sharing among their users,” the group writes.

“MPA opposes these restrictions because they would not only impact providers’ revenues and general freedom of contract but would also weaken copyright enforcement.”

Banning Account Sharing Restrictions

It’s no surprise that this pushback comes from the MPA, as the group’s members include the major Hollywood studios plus Netflix and Amazon. All have major streaming service interests and see password sharing restrictions as an effective measure to increase revenues.

Looking at the text of the most recent Bill No. 1153, we see that it aims to effectively ban any measure that restricts account sharing. When users pay for a certain number of simultaneous streams, they should be able to use these regardless of their location.

“This Law prohibits on-demand content providers from charging any additional amount or blocking access to shared accounts in a location other than the users’ domicile,” the bill reads.  

The proposal makes it clear that family members who live on opposite sides of the country, should be able to use a single streaming subscription if they please. Charging extra fees for this type of use is seen as abusive, and therefore not allowed.

“Charging additional amounts for access at an address other than the residence address is an abusive practice that limits the use of services by users, especially in cases of families with members who live in different cities or states; long-distance marriages; people who travel frequently,” the proposal notes.

It’s Streaming, Not Cable TV

The bill’s justification cites Rainer Grigolo, the director of Procon RS, who notes that streaming subscriptions shouldn’t be limited to a home address in any way. If people signed up for multiple simultaneous streams, their location shouldn’t matter.

“If a streaming service contract allows two simultaneous screens, for example, it is not up to the provider to define the degree of kinship, relatedness, and what the residential address is. After all, the contract is not linked to an address like it works with cable TV,” Grigolo explained.

The bill, and other similar proposals, are yet to be adopted, and the MPA would like to keep it that way.

MPA’s opposition, voiced in the trade barriers report, is limited to just a few sentences. However, these clearly show that the movie industry group is worried about these developments, which could potentially spread to other countries.

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A copy of the MPA’s comments regarding the 2021 National Trade Estimate Report on Foreign Trade Barriers is available here (pdf). A copy of Bill No. 1153 can be found here (pdf).

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