Brian Dudley, a columnist at the Seattle Times, has noted that just because Amazon's mp3 downloads are DRM-free doesn't mean they aren't restricted. They're just restricted legally, by contract.
The terms of service allow for some types of fair use. (Um, yay. You're letting me do what the law already says I can. Though that's above par for the course, so far.):
2.1 License. Upon your payment of our fees for Digital Content, we grant you a non-exclusive, non-transferable license to use the Digital Content for your personal, non-commercial, entertainment use, subject to and in accordance with the terms of this Agreement. You may copy, store, transfer and burn the Digital Content only for your personal, non-commercial, entertainment use.
But then, the agreement gets cagey–you can't make any uses of the work that aren't both personal and non-commercial:
2.2 Restrictions. You represent, warrant and agree that you will use the Service only for your personal, non-commercial, entertainment use and not for any redistribution of the Digital Content or other use restricted in this Section 2.2. You agree not to infringe the rights of the Digital Content's copyright owners and to comply with all applicable laws in your use of the Digital Content. Except as set forth in Section 2.1 above, 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. You are not granted any synchronization, public performance, promotional use, commercial sale, resale, reproduction or distribution rights for the Digital Content. You acknowledge that the Digital Content embodies the intellectual property of a third party and is protected by law.
And some of those uses are clearly legal fair uses–making a parody of the song from the Amazon download, for instance, even for commercial purposes, would be fair use.
Nor, according to this contract, would I be able to broadcast the song. So if I ran a webcast, and had paid the appropriate licensing fees, I could broadcast a song off a CD, but not off of my Amazon mp3 download.
It's understandable that Amazon is going to be cautious. They don't want the labels accusing them of facilitating widespread infringement, so they included this provision. After all, something like the first sale doctrine (the first time a CD is sold, the copyright owner's rights in the distribution of that particular physical CD expire, allowing resale or other distribution) doesn't always translate so well into the digital realm. If I give a friend a used CD, I deprive myself of that particular copy. If I email a track to a friend, I still have a copy on my hard drive.
Of course, the first sale doctrine still works legally in that case–I'm not liable for distribution, just for the unauthorized reproduction. Amazon's likely just worried about the practical aspects–what are the odds that I'm going to delete a perfectly good file just because I've emailed it to someone else? (Let's not even get into the argument about whether or not I'm liable even after the file's deletion because the process still involves a limited-time reproduction.)
But specifically limiting people's rights by contract isn't the best solution here. The odds are also against Amazon really having an incentive for enforcing the contract, and meanwhile, it does restrict users from lawful uses.
So why doesn't Amazon just include a disclaimer about what buying a track from them does and doesn't mean? Why shouldn't section 2.2 look more like this?
2.2 Contract Limits. Purchasing Digital Content does not grant you any rights other than those specified in Section 2.2 or those provided for by law.You agree not to infringe the rights of the Digital Content's copyright owners and to comply with all applicable laws in your use of the Digital Content. You are not granted any synchronization, public performance, promotional use, commercial sale, resale, reproduction or distribution rights for the Digital Content. You acknowledge that the Digital Content embodies the intellectual property of a third party and is protected by law.
There. This way, you're not limited in doing anything that's legal, and Amazon can point to this if someone tries to sue them for a customer's infringement. If they're more worried about customers getting the wrong idea, they can even put it in plain English:
Don't put this track up on LimeWire, stupid.
Of course, it's likely that Amazon didn't put in the provision without some pressure from the labels. Whether you're an artist, retailer, or label, you should realize that letting go of one form of control doesn't mean you have to latch on with another.
For instance, Amazon could follow the example of Radiohead and others, and include a contract term restricting use that looks more like this: