November 4, 2013
U.S. efforts to block online gambling caused an international trade dispute with the nation of Antigua. The failure of the U.S. to abide by the World Trade Organization (WTO) determination in that dispute now threatens to undermine copyright protection for American materials.
Antigua relies on gambling, including online gambling, as a major source of revenue and an important component of its national economy. Under federal law, the United States now prohibits its citizens from using online gambling services.
Antigua considered the U.S. barriers to international online gambling to be unfair trade practices. It initiated a proceeding at the WTO alleging that the barriers to online gambling imposed by the United States were violations of international trade agreements.
The WTO determined that Antigua’s claims were valid. It concluded that U.S. prohibitions against international online gambling violated existing international trade agreements.
As a penalty for the trade violation, the WTO has reportedly authorized Antigua to suspend U.S. copyrights in Antigua. This apparently means that the government of Antigua now has the authority to refuse to honor U.S. copyright claims in that country, up to a total value of $21 million per year.
The Antiguan government is reportedly in the process of developing the mechanism to be used to implement the WTO judgment. It has apparently established a “WTO Remedies Implementation Committee” which will develop and oversee the process of enforcing the WTO authorization.
It is currently unclear exactly how the process will be placed into operation. Antigua is apparently now developing legislation to define how the materials in question will be managed and distributed in the country.
This dispute provides a cautionary tale for policymaking in the digital age. Legislation and regulation in one field can have significant, and often unanticipated, consequences for another.
When enforcing hard line barriers to online gambling, the U.S. government did not anticipate that its aggressive pursuit of that policy objective would adversely affect international copyright protection for American products. The American government did not recognize that its actions against online gambling could generate economic costs which businesses relying on copyright protection would be forced to bear.
It is important to understand, however, that in the current environment where information and communications networks connect the economies of the world’s nations, all policy actions have profound potential consequences. In the Internet world, no country has the luxury of pursuing its policy goals based on an assumption that it is developing and implementing national policies in isolation.