With the blessing of the World Trade Organization, the government of Antigua and Barbuda is preparing to unveil a state-run website that will offer software, music, and movies copyrighted in the United States for sale, without compensating the American holders of those copyrights. The site is designed to remedy a now decade-long trade dispute between the tiny Caribbean island nation and the United States.
Beginning in 2003, the United States government adopted a policy of banning banks and credit cards from facilitating payments between American citizens and gambling websites hosted in non-American territory. This came from the decision of the United States Court of Appeals for the Fifth Circuit in In re: MasterCard holding that the Federal Wire Act prohibited electronic transmission of information for sports betting across telecommunications lines. The Department of Justice went on to operate on the policy that the Wire Act covered all forms of gambling, despite the Fifth Circuit in MasterCard affirming the ruling of the Eastern District Court of Louisiana that the Act did not prohibit Internet gambling on games of chance.
This policy, culminating in the Unlawful Internet Gambling Enforcement Act of 2006, hit Antiguans hard as approximately five percent of the country’s population was employed in the online gambling industry at one time, and sealing off the sizable American market sent the local industry tumbling.
In retaliation, Antigua initiated a dispute resolution process with the WTO in March of 2003, challenging the American policy as a violation of free trade under the General Agreement on Trade in Services (“GATS”) as domestic gambling providers could still access the American market while foreign providers could not. Antigua and the US are each signatory of GATS and are beholden to the terms of the treaty. In March 2004, a WTO Dispute Panel ruled in favor of Antigua, and after several more hearings, granted Antigua in 2007 the right to inflict up to $21 million of annual trade sanctions on America to compensate for the damages the ongoing American ban does to the Antiguan economy. The method for inflicting the sanctions was only settled recently, after the WTO authorized Antigua’s plan to offer American-copyrighted media for sale without compensating American copyright holders.
Precisely how the website will operate to achieve the Antiguans ends remains unclear, but suggested models include a system where users pay a small monthly fee for access to the site’s database and then download as many games, music, or movies that they desire. American representatives have repeatedly warned that going ahead with “government-authorized piracy” will jeopardize chances for a settlement, as well as American investment in Antigua. The Antiguan government, however, continues to reject the term “piracy”, as they point out they are suspending the copyrights with WTO permission.