Brier Dudley | Amazon's unlocked music still might get you sued

When launched its MP3 store last week, I thought the Seattle company had found the perfect formula for selling digital music.

Prices are lower than Apple's iTunes, audio quality is generally higher and none of the songs is embedded with obnoxious copy-protection software. I wouldn't be surprised if Amazon leapfrogs into first place in the downloadable-music business that Microsoft, Sony and others have struggled with for years.

Does that mean it's time to say goodbye to the neighborhood record store?

I'd say no, after reading the fine print in Amazon's user agreement. That's when I decided to keep buying CDs, maybe forever.

People should pay attention to the legalese, because it looks like the recording industry has found a new way to go after anyone who doesn't follow its rules.

Amazon's MP3 songs lack digital locks, the software that provides digital-rights management, or DRM. But you're still limited in how you can use the music. The difference is that instead of using software for protection, the restrictions are in the user agreement, a contract you automatically agree to when you buy the songs.

More troubling, the terms of the contract could also erode the principle known as "fair use," which gives consumers the right to make personal copies of media they purchase, sell used copies and even loan the media to friends and family. You can do all that legally, unless you enter a contract forbidding such malicious behavior.

Amazon's contract says you "may copy, store, transfer and burn the Digital Content" for personal use. But then it goes further and specifies restrictions, saying you "agree that you will not redistribute, transmit, assign, sell, broadcast, rent, share, lend, modify, adapt, edit, sub-license or otherwise transfer or use the Digital Content."

Concerned that I was being paranoid, I floated this past Fred von Lohmann, senior staff attorney with the Electronic Frontier Foundation in San Francisco, a public-interest advocacy group.

He was surprised by the language and said it appears to enable record companies to pursue a breach of contract if, for instance, you loaned your mother an iPod containing MP3s bought from Amazon.

"It's sort of like they're adding another layer of restrictions potentially above and beyond what copyright law would restrict," von Lohmann said.

Software companies have protected content with contract language forever, but with Amazon's MP3 store "it's new in the sense that it's now coming home to roost for everyday Americans," he said.

Record companies may never bother to enforce the Amazon contract, but it's important to know the territory the industry is staking out as it moves toward DRM-free music (especially after seeing what happened to Jammie Thomas, the Minnesota woman fined $222,000 last Thursday for distributing 24 songs online).

Apple, which began selling some DRM-free music in April, is less specific. Its "terms of service" agreement says buyers are agreeing to abide by copyright protections but "you may copy, store and burn" DRM-free songs "as reasonably necessary for personal, noncommercial use."

These contracts are carefully negotiated with record companies. As the big gorilla in digital music, Apple probably has more sway, and its chief executive has crusaded against DRM.

Amazon is just breaking into the business. It's still building relationships with record labels while trying to persuade them to release high-quality MP3s without DRM.

When I asked Pete Baltaxe, Amazon's director of digital music, about the fair-use implications of the contract, he said Amazon's responding to labels' concerns about piracy.

"We understand that concern," he said. "We believe that the best defense against piracy is a good offense. By a good offense, I mean sell people a great product, a product that is interoperable, that is high quality, that has great album art at a great value. That's the best way to compete."

He's right, and I wish Amazon luck as it pulls the music industry toward a more reasonable future.

Most consumers won't give a second thought to the user terms as long as the music is good, cheap and easy to get.

Enjoy. Just remember that DRM-free doesn't mean unrestricted.

Brier Dudley's column appears Mondays. Reach him at 206-515-5687 or