Copyright is NOT a Monopoly

For all these years, most of us have been playing Monopoly wrong. As a blog post that went viral in 2013 explains, according to the actual rules of the game, if a player lands on a piece of property but doesn’t want to purchase it, it goes into auction and all players bid on the property right then and there. What’s interesting, though, is how it came to be this way. It’s simple really: “no-one ever actually reads the rules of Monopoly. Monopoly is something you learn through word-of-mouth in childhood.” That’s right, since the game was released in 1935, we’ve all been playing a massive intergenerational and international game of telephone which resulted in wide-scale confusion. And if that’s not enough, I have news for you:

…that’s not the only thing a lot of people are getting wrong about monopoly.

But this time, I mean the economic concept. It’s an argument that every copyright nerd has heard… (and we all know to expect it in any dialogue with “copyright skeptics”). Here’s the short version: “Monopolies are bad. Copyright is a monopoly. Copyright is bad.” As it turns out, this argument, which appears – at least to the unsuspecting novice – to be a basic exercise in deductive reasoning, is in fact a logical fallacy.

Setting aside whatever opinion you may have on monopolies, I want to focus on the second premise: the notion that copyright is a monopoly. Copyright law does not create monopolies. I repeat, copyright is not a monopoly. And I’m going to explain why.

So what exactly is a monopoly?

To begin, let’s unpack the definition. In the words of Richard Posner, “A firm that is the only seller of a product or service having no close substitutes is said to enjoy a monopoly.” So a monopoly is characterized by a lack of competition and a lack of substitute goods, which results in a single seller controlling the market for that particular good.

Is there any one author producing all of the books we read? Any one screenwriter behind every movie out there? Is one recording artist creating all of the music we listen to? No. In each of these industries, there is no one person or company – or even one group of people or companies – that alone provide the creative content we consume.

Remember, in order to possess monopoly power, a person or company must be the only seller of a given product in the marketplace. That simply isn’t the case, not by a longshot. Copyright skeptics like to frame copyright as a monopoly by defining the “marketplace” as narrowly as possible to insinuate that by owning the rights to a single work, you control the market. But when we really analyze that argument, what they’re actually saying is that copyright gives you ownership of that particular product within the market; it does not give you power over the market for that product as is essential to a monopoly. AND THAT RIGHT THERE IS THE KEY.

It’s a simple manipulation of wording that creates an entirely different meaning. We don’t say you have a “monopoly” over the vehicle that you own or the television set in your home, we call that ownership. The same applies in the realm of creative content. Owning the rights to the films, television shows, books, photographs, paintings, etc. that you create does not give you the power to control the entire market for films, television shows, books, photographs, or paintings. It simply means that, as the owner of that intellectual property, you have the right to decide how your property is used. Even the Federal Trade Commission – the agency whose job it is to prevent anticompetitive business practices like monopolies – has said that “although the intellectual property right confers the power to exclude with respect to the specific product, process, or work in question” intellectual property rights do not grant the owner control over the market.

What’s especially interesting about this whole issue is that those who insist on labeling copyright a monopoly ignore the critical role that property rights play in the functioning of our economy. Our ability to buy, sell, or even trade items – and to earn a living by way of buying, selling, and trading – is completely dependent on our right to own property and to transfer those rights to others. Without property rights, copyright included, the economy as we know it would fall apart.

As The Patent Prejudice: Intellectual Property As Monopoly puts it, copyright provides a foundation “to enable producers to transform intellectual capital into bundles of rights that can be bought, sold, or licensed.” Copyright essentially says: Hey… let’s allow artists and other creators to buy, sell, and trade the goods that they create so that they can earn a living just like others do with the products that they create. This way, artistic and creative individuals have an incentive to choose this as a career path, and society gets more creative content to enjoy. In his article Is Copyright Property?, Adam Mossoff rebuts the criticism that “copyright is policy, not property” by outlining the parallels between traditional property rights and intellectual property rights: “To put it bluntly, if not in an oversimplified way, digital copyright is to the author and computer programmer today what fishing rights were to the whalers and fishermen of yesteryear.”

And unlike a monopoly, copyright encourages competition and fuels economic growth. In 2015, copyright-dependent industries added $1.2 trillion to the gross domestic product and provided jobs to more than 5.5 million workers across the country. Copyright is responsible for the development of new industries and new markets. Not so long ago, we couldn’t stream television shows onto our phones, there was no such thing as an e-book, and if you wanted music, you needed to purchase each album individually. But these industries are growing and changing rapidly – at a rate 127% higher than other industries across the country – with the support of copyright. Still think copyright is monopoly? Think again.

So what’s the lesson in all this? It’s two-fold. The first is that copyright is not and never has been a monopoly. And the second is, whether we’re talking economics or “do not pass go,” there’s a lot of confusion out there about monopoly.

photo credit: lcruise/iStock/thinkstock