Gadzooks - it's ZookZ from Antigua

I've been following the rather entertaining case of Antigua vs. US for a few years now. Basically, the US government has taken a "do as I say, not as I do" attitude to the WTO - refusing to follow the latter's rules while seeking to enforce them against others. The net result is that plucky little Antigua seems to have won some kind of permission to ignore US copyright - up to a certain point - although nobody really knows what this means in practice.

That's not stopping an equally cheeky Antigua-based company from trying to make money from this situation:

ZookZ provides a new way to get pure movie and music enjoyment. We deliver unlimited, high-quality movies and music through a safe, legal and secure platform for one low monthly subscription fee.

ZookZ makes it simple for any to enjoy digital entertainment. Our user-friendly interface provides access to all our digital assets. We offer unlimited downloads of all movies and music for one low monthly price. Files are delivered in MP3 and MP4 formats that are compatible with most mobile devices and players so you can enjoy your entertainment when, where and how you want. ZookZ is changing the way people use and enjoy digital entertainment. Unlike other companies, once you download the file, you can view or listen to it on any medium of your choice­ –without restrictions.

ZookZ is not a peer-to-peer file sharing system and prohibits that use of its product. Customers directly download safe content from our secure database, not from an unknown third party. ZookZ guarantees that all our digital media is free from viruses, adware and spyware. We are dedicated to providing high-quality, safe and secure digital files.

ZookZ operates under the parameters of the 2007 WTO ruling between Antigua and the United States, and is the only website that can legally offer members unlimited digital entertainment.

The FAQ has more details.

I doubt whether the US media industries will sit back and let ZookZ try to implement its plan, and I suspect that this could get rather interesting to watch.

Hypocrisy, Thy Name is Gambling

John Naughton points us to a nicely-written piece by John Lanchester about the way the City - and its global mates - work using derivatives to the tune of $85,000,000,000,000 (sorry, no mistake in that number of zeroes.)

It's a long piece because it's describing something that's complicated - sometimes made intentionally more complicated by the banking industry for the purposes of obfuscation - but at its heart it amounts to a very simple thing: gambling. As Lanchester writes:

The list of individual traders who have lost more than a billion dollars at a time betting on derivatives is not short: Robert Citron of Orange County, Toshihide Iguchi at Daiwa, Yasuo Hamanaka at Sumitomo and Nick Leeson at Barings, just to take examples from the early 1990s. In Leeson’s case in 1995, it was a huge unauthorised position in futures on the Nikkei 225, the main Japanese stock exchange. Leeson had been doubling and redoubling his bets in the belief/hope that the index would rise, and hiding the resulting open position – a gigantic open-ended bet – in a secret account. (Incidentally, Leeson’s big bet was on the Nikkei holding its level above 18,000. At the time of writing, 121/2 years later, the index sits at 15,454 – proof, if it were needed, that when prices go down they can stay that way for a long time.) The loss eventually amounted to £827 million, and destroyed Barings, Britain’s oldest merchant bank.

Got that? These are bets, pure and simple, on the way that things will work out. You can dress them up as you will, you can complexify them as you will, but at bottom they are simply gambles.

Now, add that fact to the distasteful sight of the US - a country that probably uses derivatives more than any other, and also probably makes more money from derivatives than any other, trying to stop online gambling with non-US companies - for example by buying off pathetically greedy entities like the EU:

The United States has reached a deal with the European Union, Japan and Canada to keep its Internet gambling market closed to foreign companies, but is continuing talks with India, Antigua and Barbuda, Macau and Costa Rica, U.S. trade officials said on Monday.

Since I'm no expert on derivatives, I don't know the extent to which you can buy them online from anyone anywhere, but I would be utterly astonished if you couldn't (and this suggests you can.) So you have a fundamental cognitive dissonance between the extraordinary use of derivatives worldwide, and the US attempt to ban online gambling though non-US companies.

Maybe the idea is that only the ultra-rich should be allowed to gamble wherever they want.

Let's Make That a Round Trillion, Shall We?

Just to be on the safe side, you understand:

A Brussels think-tank has accused the US government of reneging on commitments made to the World Trade Organisation (WTO) over internet gaming.

Panellists at a trade forum levelled harsh criticism at the US, focusing on a burgeoning trade clash between the US and Europe over internet gaming.

The forum believes that the US could be liable for up to US$100 billion in trade concessions to European industries after placing illegal discriminatory trade restrictions on European gaming operators.

(Via Slashdot.)

Yes! Yes! Yes! Yes! YES!

I've covered the dispute between the US and Antigua over online gambling before, but it looks like there's a chance the perfect endgame is actually going to play out:

Mr. Mendel, who is claiming $3.4 billion in damages on behalf of Antigua, has asked the trade organization to grant a rare form of compensation if the American government refuses to accept the ruling: permission for Antiguans to violate intellectual property laws by allowing them to distribute copies of American music, movie and software products, among others.

That is, either the US is forced to admit to the global community its hypocritical attitude to online gambling, and allow foreign companies to operate sites accessible by Americans; or the entire edifice of intellectual property in the US is rogered; or the WTO implodes.

Sounds like win-win-win to me. (Via TechDirt.)

US vs. WTO

I've written about the spat between the US and Antigua before, but it looks like things are getting really heavy:

And so, today, what is expected to become a parade of countries demanding sanctions against the United States as a result of its refusal to comply with WTO rulings on gambling services began to form, as Japan and India piled it on with more demands for compensation. Every other signatory affected will have a right to demand sanctions, and those sanctions may, depending on the circumstances, be applied against any American industry, from automobiles to semiconductors.

Something's got to give: I wonder what it will be.

Please, Antigua, Please

Go for it:

Repeated violation of WTO commitments in the face of contrary WTO rulings allows a victimized member country ultimately to suspend its own WTO obligations to the offending nation - a form of restitution much more punitive than tariffs alone. America runs a steady and hefty trade deficit in virtually every category of international trade other than intellectual property.

Were the WTO - with possible European, Japanese, and Chinese support - to allow the Antiguans to suspend all intellectual property obligations to the United States, the American IP industry could face a tiny adversary with an unlimited right to reproduce for its own benefit American IP goods of any kind.

I, For One, Salute Our New Antiguan Overlords

Many martial arts are based on turning your assailant's power against himself. Sounds like the plucky Antiguans have taken a course or two:

If the United States remains recalcitrant [over its refusal to open up online gambling], under the WTO rules, Antigua would potentially have the right to suspend its own compliance with the treaty that obligates it to respect the United States' intellectual-property laws.

Go, Antigua, go.