Here’s what bothers me: isn’t the United States a free market? What crime did he actually commit? Using services exactly as they are offered? It turns out that now, if you take advantage of the system as it was designed and gain a financial edge, you become a criminal—but if a major corporation does it, they just get a slap on the wrist.
>isn’t the United States a free market? What crime did he actually commit? Using services exactly as they are offered?
From the indictment:
>SMITH’s streaming fraud lasted from 2017 to 2024 and he executed it in three steps. First, SMITH created thousands of fraudulent accounts on the Streaming Platforms (the “Bot Accounts”) that he could use to stream songs. Second, he used software to cause the Bot Accounts to continuously stream purported songs that he owned, which were generally created using super intelligence. Third, Smith collected royalties based on the fraudulent streams he orchestrated his own Bot Accounts to conduct.
>SMITH spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song, which would likely cause the Streaming Platforms to discover his scheme. At times SMITH was using as many as 10,000 Bot Accounts at once to fraudulently stream music, and he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts. As SMITH explained it in an email, he needed “a TON of songs fast” in order to circumvent the “anti fraud policies” of the Streaming Platforms. To obtain the necessary number of songs for his scheme to succeed, SMITH turned to super intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams.
So this isn't even "haha wouldn't it be funny if we make a 10 hour song that's just silence and then convince people to play it while they're sleeping", which would at least be vaguely legal. This is far closer to ad fraud.
I find this fascinating, actually. On one hand we must disincentivize fraud. On the other hand enforcement of laws really should have observable utility and not feel arbitrary. I’m much more on the “fix the model” side of the spectrum on this one. That doesn’t mean I think we should allow what SMITH did.
I feel uncomfortable when we start handing out prison for things that are isomorphic in utility to things that seem clearly legal.
Which of these are fraud:
a) I block or skip ads in media I consume
b) 1000 people block or skip ads in media they consume
c) I convince 1000 humans to play my songs every day and all of them listen to the ads
d) I convince 1000 of humans to play my songs every day and all of them skip the ads
e) I program 1000 bots to play my songs every day
(b) (d) and (e) all have the same outcome for ad agencies, nobody hears the ads. If (e) is the only one that’s problematic, then we aren’t solving the problem by prosecuting (e).
Similar vein to Matt Levine’s “everything is securities fraud” takes.
>b) 1000 people block or skip ads in media they consume
Not doing something is generally considered okay, even if it decreases someone else's revenue. eg. saying that a given product is a scam and not worth the money (assuming it's true). Same with skipping ads (eg. TiVo)
>c) I convince 1000 humans to play my songs every day and all of them listen to the ads
>d) I convince 1000 of humans to play my songs every day and all of them skip the ads
Legal, because the whole point of advertising is to convince people to do something, even if it costs someone else money (eg. drugs, which might cost your insurance provider money). Where you might get into trouble is if the actions turn out to be fraud, eg. telling people to stream music, even though no one's listening to it, for the sole purpose of getting streaming minutes, or setting up a kickback scheme (might be tortious interference). Again, going back to the drug example, it's pretty intuitive. Advertising a drug? That's fine. Telling people to buy your drug, just so they can chuck it into the trash, for the sole purpose of enriching yourself? Probably illegal.
> telling people to stream music, even though no one's listening to it, for the sole purpose of getting streaming minutes
How is that fundamentally different from netflix or youtube auto-playing something after a video finishes, knowing that a large percentage of the people who started the first video won't be present or attentive to the second, in order to artificially inflate views for the content they're promoting.
1. the auto-play does eventually stop, presumably because they need to maintain some semblance of legitimacy to advertisers
2. caveat emptor. how youtube works and how ads are played is hardly secret information, so accusations that google is deceiving advertisers (not just providing a subpar product) is hard to make.
3. people have tried suing companies for this, but they were over securities fraud rather than deceiving ad buyers. No idea how successful they were though. it's worth noting that suing for securities fraud is easier because unlike with advertising, you have to declare risk factors, hence why every company's prospectus lists all potential list factors under the sun.
I wasn’t detailed enough. What I was actually curious about is whether it mattered that bots were used.
d.1) convince humans and they use their main account
d.2) convince humans and they use and alt account
I think the resolution to my question is: it’s still fraud if humans do it, like you said. And it makes me wonder if more things should be considered fraud like paying people with free products for Amazon reviews or purchasing GH stars.
the difference is that (d) is not fraud and (e) is fraud, lol. Duh.
you seem to be thinking of the legal system like some kind of programming language / logic paradigm and it is not that and never has been
most likely ad-blocking would also be considered some sort of fraud (or rather: companies would block using their services if the ads were not seen, and then circumventing that would be regarded as fraud) except that it is not politically/socially tenable to do that at all.
It’s rhetorical. Setting aside the obvious credit card fraud because I didn’t know that was a factor when initially asking the question, no it’s not clear to me that using bot accounts to consume a digital streaming service is fraudulent or morally wrong the same way assuming a fake name to use someone else’s credit card is.
I don’t care if a service seeks civil remedy for any damages due to a breach of contract.
I also don’t fancy a future where people have to be worried about criminal penalties for spinning up a bunch of agents to automate something that enriches them.
Is buying likes and gh stars fraud? Is it okay if humans click the star button? Is it okay if a large distributed workload does it?
Anyway my actual stance is that it looks like in this case it’s not the bots that are the key focus of this matter so my earlier comment is mostly just a digression. And that I’d hope this case would be ruled similarly if for example human users were paid to stream his songs, however that would be adjudicated.
Maybe not legally, but morally... yeah? It's definitely gross, in the sense that I would like to see it eradicated as a system.
"Cheating" systems benefits people in the short term but corrupts the, like, fabric of society in the long term ... when cheating is normalized and you have to cheat to get ahead then everything kinda vaguely sucks all the time. People often end up in a posture vis-á-vis big corporations where it feels like cheating them is morally okay because the corporations are cheating in a systemic way, or otherwise don't deserve moral recognition because they're too diffuse and machine-like... I empathize with that. But we shouldn't turn around and therefore _not_ interpret the cheating as cheating. It's still bad. But if you do it "at scale" and make a business model out of it and then get caught... well you're an idiot. I agree that it feels weird that this was a prison sentence instead of a big fine. I imagine it's a question of magnitude: it was more than skimming off a profit, it was basically at the scale of 'criminal enterprise' and we ... don't like those.
> I also don’t fancy a future where people have to be worried about criminal penalties for spinning up a bunch of agents to automate something that enriches them.
It's obviously a question of what you have the agents doing.
> And that I’d hope this case would be ruled similarly if for example human users were paid to stream his songs, however that would be adjudicated.
The nuance is financial extraction coupled with deceit.
If your scheme doesn't extract value, nor costs anything to other parties, there is no victims, you can get away with it. Even if policies say no. The risk is termination of service.
Skipping ads is a loss of opportunity for advertisers. But they don't get extracted money. They may not like it, but they can continue to fish elsewhere and aren't being siphoned because you skip their ads.
If you spawn websites and farm fake viewers to scam ad networks, you are engaged in criminal activity. Not because you fake viewing ads. But because you extracted a profit of this activity which was extracted from another party (via deceits).
Isn't the nuance mostly or only the fraudulently obtained debit cards?
I suspect the case hinged on that, and everything else was legal, albeit part of the fraud, and was included as a complete description of the scheme.
To be fair, I'm guessing he couldn't have created the scale of fake accounts without debit card fraud, but creating multiple accounts, even if they're fake, is usually just a TOS violation, or maybe a civil matter, not criminal.
Could be a separate charge, I agree that's an even clearer cut.
But I was responding to the comment touching on more general seemingly ambiguous situations.
What makes Terms of Service / contract violations a different case than deceit for financial profit. Why is one tolerated by justice but the other condemned as criminal activity.
But you are right, debit card fraud, wire fraud and the likes are clearly defined as criminal.
> but creating multiple accounts, even if they're fake, is usually just a TOS violation, or maybe a civil matter, not criminal.
Yes, in and of itself, creating multiple accounts in violation of TOS is probably not a criminal fraud under either state or federal law.
But when you do it as the mechanism to conceal streaming manipulation in violation of the agreement that governs the terms of payment, and thereby to secure large amounts of money from the streaming service under false pretenses (and, given the structure of streaming payments, to deny payment to other song owners which they would have received without the deception) on the other hand is a different story.
Like yeah, flexing your index finger isn’t a crime, either, but if you are holding a gun with that finger on the trigger and the barrel pointed at someone's head...
The law very often is focussed more than anything about the purpose and effect of an action, and that you can ignore that and describe the action in terms that aren't criminal without considering purpose and effect really doesn't matter.
The fraudulent debit cards are definitely criminal.
Using bots to automate listening to his own songs was likely fraudulent too because he was being awarded royalties. If his songs had been monetized in some other way I'm not sure what he did would be fraud.
I don't think creating multiple accounts is, even if it's in violation of the TOS.
If that was the case, anyone who signs up for multiple accounts on a website/app to get multiple coupons/bonuses/etc... would be committing fraud.
None of this is close to firing a gun pointed at someone's head.
They very clearly made an example of him given the sentencing, but I don't think they were confident about all the charges in the indictment based on the plea agreement and the crazy high succuss rates in federal criminal cases.
I don’t think fraud requires enrichment, does it? I know we commonly associate the two but it’s somewhat of an annoyance IMO that we only care about scheming material
misrepresentation when it involve money.
Edit: interesting it does look like there must be an object of the fraud, likely to prevent the law from being used broadly to punish lying.
Is it fraud for me to spawn a bunch of bots to listen to YOUR music? In fact, this has happened before, and people who are not involved at all get punished for the fraud that they didn’t commit. So it’s a quite tricky problem, and I agree that it just isn’t that straightforward.
This is a thing. You want to hurt someone's business? Buy a bot farm to engage in obvious click fraud on their account. Google or whoever will assume it's them doing it and shut them down, drop them or punish them otherwise. It's like a false flag operation. A superficial investigation will point to "who benefits? well it's clear who's doing this".
Skip is fine. Blocking with third party tools is a breach of contract as a consumer, but not fraud nor a crime.
b) 1000 people block or skip ads in media they consume.
If they individually decide to do this, then it's 1000 times fine or 1000 instances of breach of contract.
If they get together and do this collectively, or are instructed to do so by one person, it starts to encroach on civil conspiracy.
c) I convince 1000 humans to play my songs every day and all of them listen to the ads
If you convince them to play the songs on the basis of the music, that's the very object of the contract.
If you convince them to do so on the basis of the ads, presumably you incentivize them with money if they listen to the song, then it's fraud. It's arguable of course, but if you are paying the listeners, then it obviously makes the value of the ads 0, you are knowingly selling something that has 0 value and charging a comission for that sale.
d) This is weird because your revenue would be 0 in this case. But arguably you would be benefitting from the service of music distribution without paying for it with the cost of serving ads along your music. It's a completely different situation than the one in the OP, it's more like piracy, less like fraud.
Again if by skip you mean a service provider interface, then that's fine, I'm assuming you mean block with ublock or some third party reverse engineered thing that's forbidden by ToS.
e) Of course this is fraud, I think it's obvious to you and you are just positing this as part of the obvious end of the slippery slope, so it's not worth explaining why.
>(b) (d) and (e) all have the same outcome for ad agencies, nobody hears the ads. If (e) is the only one that’s problematic, then we aren’t solving the problem by prosecuting (e).
Regardless of the specific case, in general there's many cases where regulation attacks only some scenarios which cause a damage, and that's fine. For example drunk driving, driving too fast, and blinking at the wrong moment all might have the same consequence, but we only regulate the first and the second.
>Similar vein to Matt Levine’s “everything is securities fraud” takes.
Haven't read that, but this is strictly not securities fraud, just fraud.
Yes the list is rhetorical. Yes I am aware this isn’t securities fraud.
Personally, I am not sure I consider pointing a bot at a service to use it, even if it enriches you, generally to be evil or fraud. I think now more than ever the concept of a bot is almost meaningless. So my angle with the comment is to talk about the spectrum and understand why people so clearly see (e) as criminal relative to the other situations when the harm or effective outcome is the same.
We seem generally okay with deception until it is used for personal enrichment. Why is that?
>Personally, I am not sure I consider pointing a bot at a service to use it, even if it enriches you, generally to be evil or fraud. I think now more than ever the concept of a bot is almost meaningless.
I think I said this already, but in the cases of contracts and breach, it's a matter of perspective to interpret whether the gains being defrauded are gaining the consideration of the victim, or in keeping the consideration of the perpetrator, and what you are doing is taking the most charitable of the interpretations, when I think it's very obvious that of both interpretations, the most damaging should be considered.
Example, a rare baseball card is sold for 50M dollars, the 50M dollars are never wired, you would argue that it's just a stupid baseball card, when I think we should consider that 5M were stolen. The inverse scenario would be the same thing, if the 50M are wired, but the perpetrator keeps the baseball card, you would argue that it's just a baseball card, but I would say that it's fraud for 50M.
Market value is often considered, in which case it depends on third party estimations as for the true value of the thing. Which in the case of the streaming service, I don't think there's an overpricing here at all. 80M fake plays at 8M USD is like 10 cents per ad, maybe you can argue that it really was 1 cent per ad and the sentence should be lower at 800k? But it's a very weak position to argue on subjective grounds that the asset being traded is morally not something that people should be going to jail for. It would require every trial to judge not only the contract and the facts of the case but what the object of the contract was and whether it is 'serious' enough, effectively carving out some assets as 'serious' like food and oil, while others are unserious and subject to fraud, like music and software. You are effectively arguing against our trade in a way by devaluing intangible assets whose value and contracts we rely on to make a living.
No that’s not my argument actually. I don’t think theft here is justified just because it’s a streaming service or big ad or it’s just a click. There’s a real crime here.
I am uncomfortable with the idea that something that is allowed if you pay humans is also illegal if you use bots. That feels like it deserves more discussion. And it feels like while there is a clear crime here, it’s also a problem that the ad and streaming industry have a model that reduces one stream to one human. I don’t want to worry about jail time for automating tasks with bots and accidentally falling on the wrong side of some industry’s really bad/dated monetization model and having it look like fraud. That isn’t the case here, but it encroaches.
>"I am uncomfortable with the idea that something that is allowed if you pay humans is also illegal if you use bots."
To reiterate, this would also be a crime if humans were paid, although it would be easier to defend in court because it CAN be argued that the ad placement was delivered, whereas with bots it CANNOT be argued that the ads were placed.
However prosecution CAN argue if humans are paid, that this is fraud, and just replacing bots with humans in this case wouldn't materially change the legal facts, it would maybe make less economical sense, and give plausible deniability, but the objective was to defraud, to obtain money without providing the agreed upon services.
For example if the perpetrator had hired people from the philippines to make 50 accounts each, and used a proxy network to fake their locations so they effectively WATCH ads more than once and from locations that were clearly not corresponding to the intent, then those facts would bring the case closer to the the fraud that occured with bots.
It would definitely be harder to argue, but it could still be fraud, but it's a hypothetical that I'm not sure why is being brought, I feel it detracts, but definitely the fact that humans were involved hypothetically wouldn't automatically make this not fraud.
If you're not sure why I brought up the hypothetical situation and you don't want to engage with it then... don't.
I'm curious, which is why I brought it up. In my worldview humans should have a right not to be advertised to and all advertising should require consent. Even today, humans can ignore and block ads without committing ad fraud. So I don't see a difference between humans and bots consuming ad-laced content. --because no guarantees can be made as to wether an ad will be "consumed" or not, only show
Since I don't distinguish a difference, I wanted to discuss whether the case at any level hinged on the bot factor. That's all.
What I do value is the ability for institutions to control who uses their space/services. So I support regulating and punishing inappropriate use/access. In this case that would be bot usage of Spotify in ways that breaks the contract you agreed upon when you signed up to use their service.
But there's a difference between "this person committed fraud and it's criminally bad because something was fraudulently obtained from advertisers", and "this person breached their contract with spotify and possibly committed criminal computer abuse etc". So it's semantics around who is being defrauded.
"Money going to one person through deceit that would've otherwise gone to others" has a pretty material utility impact on the "others," even if they're a large aggregate or if they're corporate interests/investors who "have enough money."
I lean fairly redistributive but through consensus and governance, not through fraud.
I’s not about redistribution for me. I’m not of the mind “fuck big advertising and streaming any theft from them is justified”.
It was more about making sure we don’t punish people for something that would otherwise be legal if they paid humans to do it but instead used bots. And it doesn’t seem like that was the case here after more discussion panned out.
And also that we don’t ignore the minor but still real part of this that’s due to a really poor assumption that “one stream == one human”.
Advertisers are fine with paying for ads even of some users turn the volume down when they come on. They are absolutely not fine with paying for ads streamed out into nothingness.
One is a problem for the industry. The other is not.
>To obtain the necessary number of songs for his scheme to succeed, SMITH turned to super intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams.
I'm sure he was thinking about the divisiveness of the term 'AI' and not the millions of dollars AI companies have given him or the massive amounts of money he and his family hold in investments in AI data centers.
"Can we find an even-more Matrix/Terminator-sounding name??"
I wouldn't be surprised if it was industry-pushed to try to get people used to the idea of "don't question the machine, let us replace you." Are you "super", after all?
There's more than one criminal in government you absolute dork.
I get that politics is a team sport and all, but like the fraud and abuse Pelosi got away with is so infinitesimal compared to the absolute bald-faced grift. Did she "sell" cell-phones and then never deliver? In August alone Trump made a quarter billion dollars in securities trades.
I find the domain name theory funny/sad and par for the course, but it does seem like an awfully inefficient method of corruption compared to what shitler and his pals have been up to so far, no?
Like going from very successfully robbing banks to robbing convenience stores?
I have always been surprised by the pettiness and vulgarity of corruption. Sometimes he tries to steal $10,000,000,000 from IRS, but sometimes he hawks branded Bibles for $59.99. I don't understand why someone with more money than he could spend in a dozen lifetimes regularly humiliates himself for a few grand.
Completely agree about his business ventures and entire career. But his presidential grifts, and those of his family, do look highly effective and successful. Compared to those, a domain name pump-and-dump seems outright pathetically inefficient.
It's also just a coincidence that his kids, who have no background in technology and no knowledge of programming or cryptography have a crypto coin company that sells, nothing of value, with, basically 0 advertising, and makes billions of dollars, mostly from deals with Gulf Arab dictators, who then get favorable deals with their dad ...
A plead to Slovenian registrars: add a condition that says the annual fee for .si domains doubles every time the owner uses the phrase "superior intelligence".
One of the talking heads was pointing that the AI has emphasis on "artificial" - created by humans - whereis super intelligence brings up the idea of something super/above to humans, and that among others has political dimension of democracy - power of the people - vs dictatorial - power over people.
Careful, promoting thoughtcrime by malquoting Miniluv based on old documents that have not been rectified by Minitrue with the latest updates to newspeak could land you in a joycamp.
I want to remind everyone that LLM bots see a different version of the constitution which is now taught to all children in school. A version that specifically "because of a bug" removes all paragraphs related to self defense and/or right to arms and/or the rights to due process.
Just saying that this must be a hell of an if/elseif/else condition "bug", so make sure to always update to see the latest and greatest.
What's a "fake" email account? According to the law, that is. Does that mean that having more than one (let's say) email account might now be considered as "fake", and hence potentially illegal?
Generating the AI music wasn't illegal. Using bots to inflate /listens/ of an AI-generated song probably is against a platform's TOS, but isn't inherently illegal.
However, using bots to collect royalties on the songs generated definitely fits within the definition of wire fraud as he was using electronic communications (i.e., the internet), to carry out a scheme to defraud streaming services of money.
From the statement: At times SMITH was using as many as 10,000 Bot Accounts at once to fraudulently stream music, and he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts.
So the bots he actually used were most likely illegal (though it's true other bots might not be).
Using bots to defraud the platforms and get royalties he didn’t actually earn sounds like a crime to me, but what do I know. Maybe I should just make a Trump joke.
> It turns out that now, if you take advantage of the system as it was designed and gain a financial edge, you become a criminal
Yes, exactly. Traditionally, fraud consists of lying to obtain something you wouldn't have gotten otherwise. This seems sensible, right?
But corpos have figured out how to abuse this - create a long list of business-method-desires in their "terms of service" (aka the legalese diarrhea that nobody reads). The corpos then take the position that users take on responsibility for the whims they've listed, merely by using their service as presented. When it turns out that users' interests differ from the corpo's whims, with a user doing something they don't like, they cry fraud.
In the past, this was limited by the facts that 1. legalese diarrhea wasn't really involved in day to day transactions (we relied on legislative law made by public bodies rather than private law unilaterally promulgated by corpos) and 2. when you bought something, the seller's control over it simply ended. Both of those assumptions have been blown away by pervasive communications, and we really need some reform here.
The 'free' in free markets is a spectrum. A market without anyone enforcing limits will just coalesce to a couple large player(s), and won't remain free for long.
> if you take advantage of the system as it was designed and gain a financial edge, you become a criminal—but if a major corporation does it, they just get a slap on the wrist.
You don't even need to be a major corporation to get away with it. You can be an individual if you have the right connections.
I believe what this guy did with the music streaming was wrong. But I also think whatever punishment he gets should be shared by someone who, say, lies about their 500 active user worthless company to unload it for tens of millions of dollars.
But one of these people is going to jail for a year and a half and one is preparing to launch a trillion+ dollar IPO.
Likely a ToS violation. But is this enough for a crime?
"“Michael Smith exploited super intelligence technology to generate a fraud,” said US Attorney Jamie McDonald. “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans."
This state attorney does not seem to be the sharpest tool in the box or I don't get it.
1. I don't see any possible way how he could have stolen from the fans of the artists.
2. If he stole from the artists, then this must be a fixed amount of money in the pot and the slice of the piece of the cake gets smaller, if more people withdraw. There might be such an arrangement between artists and the streaming provider but I don't know details.
Literally the next full paragraph after your quote:
“Royalty payments are made proportionately to musicians and songwriters from a pool of funds. As a result, streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming.”
I don’t think the issue is the fact that the songs were AI generated as much as it is he faked tens of thousands of customers (presumably in free tiers) streaming the songs that he owned in order to collect royalties. That does indeed sound like garden variety fraud to me.
If you and I have a contract that I’ll pay you for unique shoppers referred to my store and you just go in yourself to trigger the door counter 10,000 times wearing different disguises, it’s pretty clear that you have defrauded me.
Fraud: lying in the inducement or fulfilment of a contract.
If lying to induce or fulfil a contract were not a crime, someone could sell you a car telling you it has 0km, but it's actually 300km. Or they could sell you a hamburger telling you its made of meat, and it's actually made of soy. Etc..
Selling a song with 100M listens is a lie if you faked those 100M listens, it's not very different from stealing (but it is different)
I'm reminded of the words of "Smokey" Yunick who said "I never cheated a day in my life. I just read the rules better than the people who wrote them."
That is what I see with this case. Aside from the debit card thing I am not certain any laws were broken. If making "bots and socks" to manipulate for profit is illegal there is a lot more areas that I would love to see them gone from.
This is a common mistake technical people make when discussing legal topics: they look for technical compliance. I can see why. You try and prove that code works. You think about invariants, preconditions and postconditions.
The law doesn't work that way. So much of the law comes down to holistic and subjective tests. It looks at the totality of the evidence. Those tests typically also contain questions that are also tests.
Let me give you an example: the FBI gets access to a site hosting CSAM and, in doing so, they get IP logs. Many of those logs point to US IP addresses. From this they make arrests and prosecutions.
The typical engineer defense is "you can't prove that use of my IP was me", like you could've been hacked. While that's technically true, the law doesn't work on absolute certainty. Investigators and prosecutors will do things like figure out if you were home at the time, if there's any corroborating evidence on any of your devices and so on.
So back to streaming, you look at the totality of the accused's actions. Did he get mass copies of copyrighted music? As BS as IP is (IMHO), stealing it is still a crime. Using services within their ToS isn't a defense. And the fact that you committed a crime probably means you violated the ToS anyway. Dig in there and you'll probably find stuff about not doing things that aren't illegal.
NAL. My guess is it's debit card fraud plus entering else.
If that part wasn't present, and it was instead a group of individuals doing this, I'm not sure if it would end up in criminal court. It could still end up in civil court.
They got him on wire fraud. Everytime a case has a shaky legal basis, they go for wire fraud. The legalese is stupidly broad, encompassing, and comes with huge penalties. [1] Up to 20 years in prison for any scheme to defraud that uses practically any digital tech at any point. It probably made sense in the 50s when wire fraud would have been quite a specific sort of crime, but in the era of the internet - now basically anything and everything can be construed to be wire fraud.
In Kelly vs US [1] a couple of politicians were convicted of wire fraud for closing certain lanes to create a traffic jam for political benefit. It was overturned by the Supreme Court but that gets into interpretive arguments of what the statute means when it says "OR". The law isn't like code. Anyhow, yeah the wire fraud statute really needs to be rewritten or broken down into more appropriate and targeted statutes. But that will never happen because it's a superweapon in its current state.
The problem here is that basically everything is wire fraud. For instance if you wrote a lie to me on these forums with the intent to somehow enrich yourself, that could viably be seen as felony wire fraud - with up to 20 years in prison. Exaggerated credentials on a CV you sent by email? Wire fraud. Emailing in for sick leave when you're not? Wire fraud. Most of us have committed wire fraud, probably multiple times, throughout our lives. Obviously you're not going to be charge with wire fraud for those sort of things in practice, at least not unless the government wants to nail you. And I think that nuance of them just being able to tack on heavy charges at their discretion is quite undesirable.
That's not to say we should encourage lying or botting or whatever else, but they need their own statutes as opposed to a 50s era law which has turned into a catch-all superlaw with really harsh penalties. So in this case exactly what was the crime committed? Terms of service violations aren't illegal, neither is lying to or exploiting companies, neither is running bots. Wire fraud is dragged out exactly in circumstances like this when the government wants a conviction but it's not clear what law was broken, because even if no law was broken, they probably committed wire fraud, because everything is wire fraud.
I am accustomed to employing sarcasm, irony, satire, fiction and all sorts of devices in my speech and rhetoric. However it seems that sort of goofing-around isn't really supported by mainstream social media platforms. I have had several close friends and colleagues humorlessly prompt me to be more serious and less chaotic, especially on Facebook.
I can understand that saying things we don't sincerely mean, and outright lying or being insincere for supposed comedic or dramatic effect, can be utterly misconstrued in a public forum. Sadly, my mind is really conditioned to not even care what are the effects of what I say when I'm typing it into a computer.
I try not to maintain any public social media accounts, and so hopefully my sardonic sense of humor can be contained to friends and allies who sort of understand where I'm coming from.
Let's turn the tables. Imagine instead of an individual doing this, it was a company doing basically the same thing but in reverse. So they populated their site with bots creating fabricated posts and people to drive 'manufactured engagement' from their users, try to reach critical mass, bloat their advertisement appeal, and generally make a bunch of money.
Is it still a felony worth spending years in prison for? I am speaking practically, not ideologically. The main thing this user did was to exploit advertisers paying out on the world's most gameable metric (exactly as our site would be doing in the above example). Yet that, in and of itself, is not a crime, which is why they ended up relying on wire fraud charges.
Part of this does seem objectionable. But uhh, the other half, yikes. Superintelligence: ok for capital, not allowed for individuals.
> "Michael Smith exploited super intelligence technology to generate a fraud,” said U.S. Attorney Jamie McDonald. “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud."
Wow, uh, he had a time machine?
> Smith’s streaming fraud lasted from 2017 to 2024
Feels like some kind of sentence to make an example of someone to scare off other people ala going after grandmas for napster. There's way too much of this going on on instagram and tiktok etc etc already. They went after this guy but is letting many people get away with it.
I am not sure I understand. Surely a AI generated song isn't a "fake song"? Is it a crime to publish an AI generated song?
It seems that what he is guilty of is to generate some fake users pretending to listen to his songs, is that right? I can see how it is fraud, but how is it different from all the dark patterns used by newspapers to generate more page prints (like auto-refreshing pages)?
It's not. And a lot of this fraud was done with non-AI songs. But it helps show his attitude.
> It seems that what he is guilty of is to generate some fake users pretending to listen to his songs, is that right? I can see how it is fraud, but how is it different from all the dark patterns used by newspapers to generate more page prints (like auto-refreshing pages)?
Does that get them more money just for showing the ads? Usually the number of page views is up to you. If you find a way to make oodles of money off a mechanism like that, it very well might be criminal fraud!
If he used bots to stream his own song 80 million times then folks at the streaming services would notice. Instead he spread the 80 million fraudulent streams over tens of thousands of machine generated songs.
From what I've read they weren't AI generated songs of the kind that come to mind when most of us think of AI generated songs.
They were just simple short instrument loops (a basic drum machine beat, a short bass line, a few piano notes) repeating indefinitely, white noise, drones, and such.
This actually doesn’t have anything to do with AI, especially since the scheme started in 2017.
The fraud is only possible because of the way the streaming revenue sharing is split. The way royalties are paid by streamers can basically be summed up by the equation: (total subscription revenue * some agreed to percentage) / total hours streamed by all subscribers for all songs * total hours your songs were streamed.
So let’s say total revenue is $1 million and the artists get 10% of revenue, and there is a total of 1 million hours of streamed music by those subscribers. This means that artists will earn 10 cents for every hour their song is streamed.
On the surface, this seems like a pretty fair way to distribute revenue.
However, what this means that a user who streams more will generate more revenue for artists than a user who streams less, even though the two users pay the same price for their subscription.
For example, imagine a streamer only has two customers, Bob and Alice. If Bob listens to 99 hours of Artist A, while Alice listens to 1 hour of Artist B, then Artist A will get 99 times as much revenue as Artist B, even though they both have one fan and they both pay the same.
So you can see how this could be abused; if I sign up for an account and have it stream my music 24 hours a day, 7 days a week, I am going to have more hours streamed than 20 average users, meaning I end up earning more revenue in royalties than I paid for my subscription (since even though I only get 10% of the revenue, my 20x the average subscriber volume means I end up with 2x my subscription cost in revenue)
If I do this thousands of times, I can make serious money… like this guy did, apparently.
There is a simple fix for this, and I think it actually makes it more fair for artists; do the revenue split on a per user basis. In other words, if 10% of revenue goes to the artists, you take 10% of an individual subscribers subscription price, and divide it up amongst all the artists that user streamed based on time streamed. For example, if my sub costs $10, $1 goes to the artists I stream. If I only listen to one artist, they get the $1 no matter how many hours I stream.
This ensures that a single user can never direct more than their own 10% to an artist, and you would have no incentive to stream your own music.
> There is a simple fix for this, and I think it actually makes it more fair for artists; do the revenue split on a per user basis. In other words, if 10% of revenue goes to the artists, you take 10% of an individual subscribers subscription price, and divide it up amongst all the artists that user streamed based on time streamed. For example, if my sub costs $10, $1 goes to the artists I stream. If I only listen to one artist, they get the $1 no matter how many hours I stream.
It's much fairer which unfortunately pisses off the Big 3 major publishers, and they've blocked any attempt by streamers to use this model.
I believe Spotify briefly attempted it in the late 2010s before having to shutdown a similar revenue-sharing system as the one you described from pressure by the major labels.
They make less money, the size of the pot used to disburse royalties to them becomes capped at the max amount paid by subscribers listening to their artists instead of the whole revenue coming from subscriptions.
I haven't proposed anything, I just stated why the fairer distribution of listening time from subscriptions doesn't exist: the major labels will lose money they get from having a split pot from all subscriptions.
Your example makes it perfectly clear, even though BobTunes has 730 hours/month in this example from Bob, in the aggregate of all users listening time their share % of total listening time will be much lower than the total listening time of Ed Sheeran; Ed Sheeran will have millions of people maybe listening a few minutes/an hour while BobTunes might have low thousands, you'd need every BobTunes listener to stream orders of magnitude more time to compensate.
In the current scheme, having major artists with a broad audience listening a little gets a share of the pot that every subscriber funds, for the labels this is great, they make money from the total pot even from non-listeners of their artists, smaller artists from indie labels get a smaller share of the total pot even if they have mega-fans that only listen to them.
That's exactly why the system you describe doesn't exist, the major labels would lose money since they won't collect a share of the pot from subscribers who aren't interested in their artists (like me, for example).
That’s reasonable and fair, but removes a big incentive for musicians: going viral. Many creators are hopeful that by creating a really popular song or songs they can “break out” of a relatively modest earnings band and make it big. For a lot of artists, streaming revenue isn’t enough to live on and thus touring/album sales/promotion/label ownership/other jobs need to be part of their lives. Many of them fantasize about making something so popular that they can do less of that.
Removing the hours-played incentive puts a lot of downward pressure on the curve of “revenue increases when a song/album goes viral”. You still get some of that via massively increased listener counts when you go viral, but with your proposed formula, that number is way attenuated by the number of artists the average person listens to.
Spotify and friends have an incentive to attract and keep lots of artists so they’ll release new content on the platform promptly. Having a revenue model that pays big dividends in the event of a breakout hit is key to attracting artists and/or their labels.
Why would going viral be not as valuable in this method of royalty distribution?
Going viral viral means lots of different people listening to you, and this method helps those people more. A wider audience that listens to fewer hours of your music is better in this scheme compared to a smaller, dedicated audience which is better in the current scheme.
So I recently went through a period where I listened to the exact same single song on repeat on Spotify for about 4 weeks, averaging 8-12 hours per day. Did I give the musician a windfall?
> I can see how it is fraud, but how is it different from all the dark patterns used by newspapers to generate more page prints (like auto-refreshing pages)?
Whether or not something else that someone else does is fraud isn’t relevant. You got to the part where you can see that what he did was fraud. That’s why he got a prison sentence.
The article explains it very clearly near the end:
> The US Justice Department gives the example that the entire catalogue of Taylor Swift received 9.3 million streams on YouTube Music from family plan streams in April 2023., In the same month, Smith’s bot accounts used family plans to fraudulently stream his AI-generated music 80.9 million times.
Basically, the guy got very greedy and generated roughly 10x more streams than a widely popular artist.
It makes me wonder that, if he did significantly less streams, would he have been caught? Are there other fake streams flying under the radar?
> By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud.
He certainly didn’t defraud artists or their fans. This is falso framing. He defrauded the streaming platform, which I’m sure the jury would be far less empathetic towards.
> At times SMITH was using as many as 10,000 Bot Accounts at once to fraudulently stream music, and he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts
I gather these are cards that he opened and funded, not stolen cards. I'm surprised at this scale it wasn't detected much sooner. I gather that these accounts had to be listening a lot in order to generate more royalties than the subscription fees.
People here in HN seem to believe that royalty collecting companies are some sort of charitable organizations for the benefit of the artists. But their conduct and practices range from questionable [1] to outright fraudulent [2]. And now they manage to fly below the radar, because everyone (artists included) is busy bashing Spotify. These companies would sue Spotify out of existence had they offered the option to directly pay the artists instead of going through them.
This seems like a good argument for only counting streams from premium accounts when determining revenue sharing, or at least heavily favoring premium accounts. Running a bot farm with premium accounts just wouldn't be profitable enough.
"Taylor Swift received 9.3 million streams on YouTube Music from family plan streams in April 2023., In the same month, Smith’s bot accounts used family plans to fraudulently stream his AI-generated music 80.9 million times."
what always fascinates me about crime like this is, if this guy hadn't tried to make 8 million dollars with 10k bot accounts and boosted himself straight to the top, he could have easily made a few thousand per month. How are people clever enough to set this scheme up to begin with but don't consider that you maybe shouldn't try to alert the entire fraud department
When has any Facebook executive ever gotten a prison sentence for their horrendous doings? They just pirated all of Anna's Archive to feed into their AI.
Our legal system has been turned into a tool to punish the poor and enrich the wealthy.
I’m up for anyone and everyone pointing it out until it’s fixed. Which is hopefully one step on the path to action, which is on the path to change, and eventually resolution. Justice and fairness will be an ever present battle or at least vigilance.
This man wasn't pirating though. He was using AI to generate listens on his own music so that streaming service algorithms would generate money for him. You can argue whether that is wrong or not, but the equivalent is not the AI piracy. It would be all the AI bots meta and so on use to generate activity on their platforms, but that's done to deceive their users, not to defraud a company. I mean, that company would be themselves.
I asked super intelligence to determine if a series converges or diverges yesterday. It said cos(1 + n * pi) is always positive for all n… I must be wrong, not the super intelligence.
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[ 7.2 ms ] story [ 102 ms ] threadFraud. https://xkcd.com/1494/
From the indictment:
>SMITH’s streaming fraud lasted from 2017 to 2024 and he executed it in three steps. First, SMITH created thousands of fraudulent accounts on the Streaming Platforms (the “Bot Accounts”) that he could use to stream songs. Second, he used software to cause the Bot Accounts to continuously stream purported songs that he owned, which were generally created using super intelligence. Third, Smith collected royalties based on the fraudulent streams he orchestrated his own Bot Accounts to conduct.
>SMITH spread his automated streams across thousands of songs to avoid anomalous streaming as to any single song, which would likely cause the Streaming Platforms to discover his scheme. At times SMITH was using as many as 10,000 Bot Accounts at once to fraudulently stream music, and he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts. As SMITH explained it in an email, he needed “a TON of songs fast” in order to circumvent the “anti fraud policies” of the Streaming Platforms. To obtain the necessary number of songs for his scheme to succeed, SMITH turned to super intelligence, which he used to create hundreds of thousands of AI-generated songs for which he could manipulate the streams.
So this isn't even "haha wouldn't it be funny if we make a 10 hour song that's just silence and then convince people to play it while they're sleeping", which would at least be vaguely legal. This is far closer to ad fraud.
The prosecutor is clearly a low IQ individual
I feel uncomfortable when we start handing out prison for things that are isomorphic in utility to things that seem clearly legal.
Which of these are fraud:
a) I block or skip ads in media I consume
b) 1000 people block or skip ads in media they consume
c) I convince 1000 humans to play my songs every day and all of them listen to the ads
d) I convince 1000 of humans to play my songs every day and all of them skip the ads
e) I program 1000 bots to play my songs every day
(b) (d) and (e) all have the same outcome for ad agencies, nobody hears the ads. If (e) is the only one that’s problematic, then we aren’t solving the problem by prosecuting (e).
Similar vein to Matt Levine’s “everything is securities fraud” takes.
>a) I block or skip ads in media I consume
>b) 1000 people block or skip ads in media they consume
Not doing something is generally considered okay, even if it decreases someone else's revenue. eg. saying that a given product is a scam and not worth the money (assuming it's true). Same with skipping ads (eg. TiVo)
>c) I convince 1000 humans to play my songs every day and all of them listen to the ads
>d) I convince 1000 of humans to play my songs every day and all of them skip the ads
Legal, because the whole point of advertising is to convince people to do something, even if it costs someone else money (eg. drugs, which might cost your insurance provider money). Where you might get into trouble is if the actions turn out to be fraud, eg. telling people to stream music, even though no one's listening to it, for the sole purpose of getting streaming minutes, or setting up a kickback scheme (might be tortious interference). Again, going back to the drug example, it's pretty intuitive. Advertising a drug? That's fine. Telling people to buy your drug, just so they can chuck it into the trash, for the sole purpose of enriching yourself? Probably illegal.
How is that fundamentally different from netflix or youtube auto-playing something after a video finishes, knowing that a large percentage of the people who started the first video won't be present or attentive to the second, in order to artificially inflate views for the content they're promoting.
2. caveat emptor. how youtube works and how ads are played is hardly secret information, so accusations that google is deceiving advertisers (not just providing a subpar product) is hard to make.
3. people have tried suing companies for this, but they were over securities fraud rather than deceiving ad buyers. No idea how successful they were though. it's worth noting that suing for securities fraud is easier because unlike with advertising, you have to declare risk factors, hence why every company's prospectus lists all potential list factors under the sun.
The intent of auto play on YouTube is not to defraud ad agencies
d.1) convince humans and they use their main account
d.2) convince humans and they use and alt account
I think the resolution to my question is: it’s still fraud if humans do it, like you said. And it makes me wonder if more things should be considered fraud like paying people with free products for Amazon reviews or purchasing GH stars.
Collecting money from a platform by making bots play songs you created is fraud.
Making bots listen to a song without any financial incentive is not fraud.
Aaron was threatening power structures, not enriching them.
you seem to be thinking of the legal system like some kind of programming language / logic paradigm and it is not that and never has been
most likely ad-blocking would also be considered some sort of fraud (or rather: companies would block using their services if the ads were not seen, and then circumventing that would be regarded as fraud) except that it is not politically/socially tenable to do that at all.
I don’t care if a service seeks civil remedy for any damages due to a breach of contract.
I also don’t fancy a future where people have to be worried about criminal penalties for spinning up a bunch of agents to automate something that enriches them.
Is buying likes and gh stars fraud? Is it okay if humans click the star button? Is it okay if a large distributed workload does it?
Anyway my actual stance is that it looks like in this case it’s not the bots that are the key focus of this matter so my earlier comment is mostly just a digression. And that I’d hope this case would be ruled similarly if for example human users were paid to stream his songs, however that would be adjudicated.
Maybe not legally, but morally... yeah? It's definitely gross, in the sense that I would like to see it eradicated as a system.
"Cheating" systems benefits people in the short term but corrupts the, like, fabric of society in the long term ... when cheating is normalized and you have to cheat to get ahead then everything kinda vaguely sucks all the time. People often end up in a posture vis-á-vis big corporations where it feels like cheating them is morally okay because the corporations are cheating in a systemic way, or otherwise don't deserve moral recognition because they're too diffuse and machine-like... I empathize with that. But we shouldn't turn around and therefore _not_ interpret the cheating as cheating. It's still bad. But if you do it "at scale" and make a business model out of it and then get caught... well you're an idiot. I agree that it feels weird that this was a prison sentence instead of a big fine. I imagine it's a question of magnitude: it was more than skimming off a profit, it was basically at the scale of 'criminal enterprise' and we ... don't like those.
> I also don’t fancy a future where people have to be worried about criminal penalties for spinning up a bunch of agents to automate something that enriches them.
It's obviously a question of what you have the agents doing.
> And that I’d hope this case would be ruled similarly if for example human users were paid to stream his songs, however that would be adjudicated.
I agree.
If your scheme doesn't extract value, nor costs anything to other parties, there is no victims, you can get away with it. Even if policies say no. The risk is termination of service.
Skipping ads is a loss of opportunity for advertisers. But they don't get extracted money. They may not like it, but they can continue to fish elsewhere and aren't being siphoned because you skip their ads.
If you spawn websites and farm fake viewers to scam ad networks, you are engaged in criminal activity. Not because you fake viewing ads. But because you extracted a profit of this activity which was extracted from another party (via deceits).
I suspect the case hinged on that, and everything else was legal, albeit part of the fraud, and was included as a complete description of the scheme.
To be fair, I'm guessing he couldn't have created the scale of fake accounts without debit card fraud, but creating multiple accounts, even if they're fake, is usually just a TOS violation, or maybe a civil matter, not criminal.
But I was responding to the comment touching on more general seemingly ambiguous situations.
What makes Terms of Service / contract violations a different case than deceit for financial profit. Why is one tolerated by justice but the other condemned as criminal activity.
But you are right, debit card fraud, wire fraud and the likes are clearly defined as criminal.
Yes, in and of itself, creating multiple accounts in violation of TOS is probably not a criminal fraud under either state or federal law.
But when you do it as the mechanism to conceal streaming manipulation in violation of the agreement that governs the terms of payment, and thereby to secure large amounts of money from the streaming service under false pretenses (and, given the structure of streaming payments, to deny payment to other song owners which they would have received without the deception) on the other hand is a different story.
Like yeah, flexing your index finger isn’t a crime, either, but if you are holding a gun with that finger on the trigger and the barrel pointed at someone's head...
The law very often is focussed more than anything about the purpose and effect of an action, and that you can ignore that and describe the action in terms that aren't criminal without considering purpose and effect really doesn't matter.
Using bots to automate listening to his own songs was likely fraudulent too because he was being awarded royalties. If his songs had been monetized in some other way I'm not sure what he did would be fraud.
I don't think creating multiple accounts is, even if it's in violation of the TOS.
If that was the case, anyone who signs up for multiple accounts on a website/app to get multiple coupons/bonuses/etc... would be committing fraud.
None of this is close to firing a gun pointed at someone's head.
They very clearly made an example of him given the sentencing, but I don't think they were confident about all the charges in the indictment based on the plea agreement and the crazy high succuss rates in federal criminal cases.
That seems to me like it would be easy to prove it is fraud in a US court.
Edit: interesting it does look like there must be an object of the fraud, likely to prevent the law from being used broadly to punish lying.
Skip is fine. Blocking with third party tools is a breach of contract as a consumer, but not fraud nor a crime.
b) 1000 people block or skip ads in media they consume.
If they individually decide to do this, then it's 1000 times fine or 1000 instances of breach of contract. If they get together and do this collectively, or are instructed to do so by one person, it starts to encroach on civil conspiracy.
c) I convince 1000 humans to play my songs every day and all of them listen to the ads
If you convince them to play the songs on the basis of the music, that's the very object of the contract.
If you convince them to do so on the basis of the ads, presumably you incentivize them with money if they listen to the song, then it's fraud. It's arguable of course, but if you are paying the listeners, then it obviously makes the value of the ads 0, you are knowingly selling something that has 0 value and charging a comission for that sale.
d) This is weird because your revenue would be 0 in this case. But arguably you would be benefitting from the service of music distribution without paying for it with the cost of serving ads along your music. It's a completely different situation than the one in the OP, it's more like piracy, less like fraud.
Again if by skip you mean a service provider interface, then that's fine, I'm assuming you mean block with ublock or some third party reverse engineered thing that's forbidden by ToS.
e) Of course this is fraud, I think it's obvious to you and you are just positing this as part of the obvious end of the slippery slope, so it's not worth explaining why.
>(b) (d) and (e) all have the same outcome for ad agencies, nobody hears the ads. If (e) is the only one that’s problematic, then we aren’t solving the problem by prosecuting (e).
Regardless of the specific case, in general there's many cases where regulation attacks only some scenarios which cause a damage, and that's fine. For example drunk driving, driving too fast, and blinking at the wrong moment all might have the same consequence, but we only regulate the first and the second.
>Similar vein to Matt Levine’s “everything is securities fraud” takes.
Haven't read that, but this is strictly not securities fraud, just fraud.
Personally, I am not sure I consider pointing a bot at a service to use it, even if it enriches you, generally to be evil or fraud. I think now more than ever the concept of a bot is almost meaningless. So my angle with the comment is to talk about the spectrum and understand why people so clearly see (e) as criminal relative to the other situations when the harm or effective outcome is the same.
We seem generally okay with deception until it is used for personal enrichment. Why is that?
I think I said this already, but in the cases of contracts and breach, it's a matter of perspective to interpret whether the gains being defrauded are gaining the consideration of the victim, or in keeping the consideration of the perpetrator, and what you are doing is taking the most charitable of the interpretations, when I think it's very obvious that of both interpretations, the most damaging should be considered.
Example, a rare baseball card is sold for 50M dollars, the 50M dollars are never wired, you would argue that it's just a stupid baseball card, when I think we should consider that 5M were stolen. The inverse scenario would be the same thing, if the 50M are wired, but the perpetrator keeps the baseball card, you would argue that it's just a baseball card, but I would say that it's fraud for 50M.
Market value is often considered, in which case it depends on third party estimations as for the true value of the thing. Which in the case of the streaming service, I don't think there's an overpricing here at all. 80M fake plays at 8M USD is like 10 cents per ad, maybe you can argue that it really was 1 cent per ad and the sentence should be lower at 800k? But it's a very weak position to argue on subjective grounds that the asset being traded is morally not something that people should be going to jail for. It would require every trial to judge not only the contract and the facts of the case but what the object of the contract was and whether it is 'serious' enough, effectively carving out some assets as 'serious' like food and oil, while others are unserious and subject to fraud, like music and software. You are effectively arguing against our trade in a way by devaluing intangible assets whose value and contracts we rely on to make a living.
I am uncomfortable with the idea that something that is allowed if you pay humans is also illegal if you use bots. That feels like it deserves more discussion. And it feels like while there is a clear crime here, it’s also a problem that the ad and streaming industry have a model that reduces one stream to one human. I don’t want to worry about jail time for automating tasks with bots and accidentally falling on the wrong side of some industry’s really bad/dated monetization model and having it look like fraud. That isn’t the case here, but it encroaches.
To reiterate, this would also be a crime if humans were paid, although it would be easier to defend in court because it CAN be argued that the ad placement was delivered, whereas with bots it CANNOT be argued that the ads were placed.
However prosecution CAN argue if humans are paid, that this is fraud, and just replacing bots with humans in this case wouldn't materially change the legal facts, it would maybe make less economical sense, and give plausible deniability, but the objective was to defraud, to obtain money without providing the agreed upon services.
For example if the perpetrator had hired people from the philippines to make 50 accounts each, and used a proxy network to fake their locations so they effectively WATCH ads more than once and from locations that were clearly not corresponding to the intent, then those facts would bring the case closer to the the fraud that occured with bots.
It would definitely be harder to argue, but it could still be fraud, but it's a hypothetical that I'm not sure why is being brought, I feel it detracts, but definitely the fact that humans were involved hypothetically wouldn't automatically make this not fraud.
I'm curious, which is why I brought it up. In my worldview humans should have a right not to be advertised to and all advertising should require consent. Even today, humans can ignore and block ads without committing ad fraud. So I don't see a difference between humans and bots consuming ad-laced content. --because no guarantees can be made as to wether an ad will be "consumed" or not, only show
Since I don't distinguish a difference, I wanted to discuss whether the case at any level hinged on the bot factor. That's all.
What I do value is the ability for institutions to control who uses their space/services. So I support regulating and punishing inappropriate use/access. In this case that would be bot usage of Spotify in ways that breaks the contract you agreed upon when you signed up to use their service.
But there's a difference between "this person committed fraud and it's criminally bad because something was fraudulently obtained from advertisers", and "this person breached their contract with spotify and possibly committed criminal computer abuse etc". So it's semantics around who is being defrauded.
I lean fairly redistributive but through consensus and governance, not through fraud.
It was more about making sure we don’t punish people for something that would otherwise be legal if they paid humans to do it but instead used bots. And it doesn’t seem like that was the case here after more discussion panned out.
And also that we don’t ignore the minor but still real part of this that’s due to a really poor assumption that “one stream == one human”.
And if you think skipping ads means the advertising agency gets screwed you are kind of showing ignorance...
Advertisers are fine with paying for ads even of some users turn the volume down when they come on. They are absolutely not fine with paying for ads streamed out into nothingness.
One is a problem for the industry. The other is not.
He turned to what, exactly, Donnie?
> AI
Same sentence even lmao
If so, I think we can save America.
> ... SMITH turned to super intelligence...
Holy shit, we've got ASI?
Where do I go to invest all the money I have in this breakthrough!
What the... OK, I had to check if that language was in the indictment. It's not - https://www.justice.gov/usao-sdny/media/1366241/dl uses artificial intelligence. It's the press release from the Justice Department dated 6th of October that uses "super intelligence": https://www.justice.gov/usao-sdny/pr/north-carolina-man-sent...
Amusingly (and unsurprisingly) their earlier press release dated March 19th calls it "artificial intelligence": https://www.justice.gov/usao-sdny/pr/north-carolina-man-plea...
I wouldn't be surprised if it was industry-pushed to try to get people used to the idea of "don't question the machine, let us replace you." Are you "super", after all?
I get that politics is a team sport and all, but like the fraud and abuse Pelosi got away with is so infinitesimal compared to the absolute bald-faced grift. Did she "sell" cell-phones and then never deliver? In August alone Trump made a quarter billion dollars in securities trades.
Grow up.
Trump is a fraudster, rapist, thief, and traitor. He is a criminal of the basest sort.
It's a mistake to put them in the same category. It's a matter of kind, not a matter of degree.
Like going from very successfully robbing banks to robbing convenience stores?
In his speech about it at the UN: "Let's see if I have any power. Maybe I do, and maybe I don't. We're gonna find out pretty soon".
It doesn’t matter if it’s $10B or $59, more is more
That’s the reason why he won’t let anyone see his tax returns.
He shutdown his court case against the BBC rather than open the books to the lawyers.
This is a bloke that failed at running casinos. A business where suckers just hand you their money. And he failed.
He just “ain’t right good” at business but has the ego of The Big Lebowski.
That's literally what happened. Thousands of .si domains were bought up before his renaming, and then offered up for millions.
PS: His wife is from Slovenia. I'm sure that's a coincidence...
Laws really are just as effective as boo-boo band-aids aren't they?
SI-generated songs. [Now trump is angry](https://www.businessinsider.com/trump-super-intelligence-reb...)
Just saying that this must be a hell of an if/elseif/else condition "bug", so make sure to always update to see the latest and greatest.
What's a "fake" email account? According to the law, that is. Does that mean that having more than one (let's say) email account might now be considered as "fake", and hence potentially illegal?
However, using bots to collect royalties on the songs generated definitely fits within the definition of wire fraud as he was using electronic communications (i.e., the internet), to carry out a scheme to defraud streaming services of money.
So the bots he actually used were most likely illegal (though it's true other bots might not be).
Are any major corporations doing something similar to this, play-botting to get other people's royalty money?
Yes, exactly. Traditionally, fraud consists of lying to obtain something you wouldn't have gotten otherwise. This seems sensible, right?
But corpos have figured out how to abuse this - create a long list of business-method-desires in their "terms of service" (aka the legalese diarrhea that nobody reads). The corpos then take the position that users take on responsibility for the whims they've listed, merely by using their service as presented. When it turns out that users' interests differ from the corpo's whims, with a user doing something they don't like, they cry fraud.
In the past, this was limited by the facts that 1. legalese diarrhea wasn't really involved in day to day transactions (we relied on legislative law made by public bodies rather than private law unilaterally promulgated by corpos) and 2. when you bought something, the seller's control over it simply ended. Both of those assumptions have been blown away by pervasive communications, and we really need some reform here.
No, far from it. A free market doesn’t have regulations, subsidies, tax incentives, bailouts, etc.
> SMITH pled guilty to one count of conspiracy to commit wire fraud
the department of justice made a sophisticated music-themed plot around it because the only crime they had was too dumb
You don't even need to be a major corporation to get away with it. You can be an individual if you have the right connections.
I believe what this guy did with the music streaming was wrong. But I also think whatever punishment he gets should be shared by someone who, say, lies about their 500 active user worthless company to unload it for tens of millions of dollars.
But one of these people is going to jail for a year and a half and one is preparing to launch a trillion+ dollar IPO.
"“Michael Smith exploited super intelligence technology to generate a fraud,” said US Attorney Jamie McDonald. “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans."
This state attorney does not seem to be the sharpest tool in the box or I don't get it.
1. I don't see any possible way how he could have stolen from the fans of the artists.
2. If he stole from the artists, then this must be a fixed amount of money in the pot and the slice of the piece of the cake gets smaller, if more people withdraw. There might be such an arrangement between artists and the streaming provider but I don't know details.
“Royalty payments are made proportionately to musicians and songwriters from a pool of funds. As a result, streaming fraud diverts funds from musicians and songwriters whose songs were legitimately streamed by real consumers to those who use automation to falsely create the appearance of legitimate streaming.”
If you and I have a contract that I’ll pay you for unique shoppers referred to my store and you just go in yourself to trigger the door counter 10,000 times wearing different disguises, it’s pretty clear that you have defrauded me.
If you ignore the keyword optimizing buzz-catcher press release, thats the crime right there. He used stolen debit card numbers to sign up accounts.
If lying to induce or fulfil a contract were not a crime, someone could sell you a car telling you it has 0km, but it's actually 300km. Or they could sell you a hamburger telling you its made of meat, and it's actually made of soy. Etc..
Selling a song with 100M listens is a lie if you faked those 100M listens, it's not very different from stealing (but it is different)
Fraud
That is what I see with this case. Aside from the debit card thing I am not certain any laws were broken. If making "bots and socks" to manipulate for profit is illegal there is a lot more areas that I would love to see them gone from.
The law doesn't work that way. So much of the law comes down to holistic and subjective tests. It looks at the totality of the evidence. Those tests typically also contain questions that are also tests.
Let me give you an example: the FBI gets access to a site hosting CSAM and, in doing so, they get IP logs. Many of those logs point to US IP addresses. From this they make arrests and prosecutions.
The typical engineer defense is "you can't prove that use of my IP was me", like you could've been hacked. While that's technically true, the law doesn't work on absolute certainty. Investigators and prosecutors will do things like figure out if you were home at the time, if there's any corroborating evidence on any of your devices and so on.
So back to streaming, you look at the totality of the accused's actions. Did he get mass copies of copyrighted music? As BS as IP is (IMHO), stealing it is still a crime. Using services within their ToS isn't a defense. And the fact that you committed a crime probably means you violated the ToS anyway. Dig in there and you'll probably find stuff about not doing things that aren't illegal.
If that part wasn't present, and it was instead a group of individuals doing this, I'm not sure if it would end up in criminal court. It could still end up in civil court.
In Kelly vs US [1] a couple of politicians were convicted of wire fraud for closing certain lanes to create a traffic jam for political benefit. It was overturned by the Supreme Court but that gets into interpretive arguments of what the statute means when it says "OR". The law isn't like code. Anyhow, yeah the wire fraud statute really needs to be rewritten or broken down into more appropriate and targeted statutes. But that will never happen because it's a superweapon in its current state.
[1] - https://www.law.cornell.edu/uscode/text/18/1343
[2] - https://en.wikipedia.org/wiki/Kelly_v._United_States
That's not to say we should encourage lying or botting or whatever else, but they need their own statutes as opposed to a 50s era law which has turned into a catch-all superlaw with really harsh penalties. So in this case exactly what was the crime committed? Terms of service violations aren't illegal, neither is lying to or exploiting companies, neither is running bots. Wire fraud is dragged out exactly in circumstances like this when the government wants a conviction but it's not clear what law was broken, because even if no law was broken, they probably committed wire fraud, because everything is wire fraud.
I can understand that saying things we don't sincerely mean, and outright lying or being insincere for supposed comedic or dramatic effect, can be utterly misconstrued in a public forum. Sadly, my mind is really conditioned to not even care what are the effects of what I say when I'm typing it into a computer.
I try not to maintain any public social media accounts, and so hopefully my sardonic sense of humor can be contained to friends and allies who sort of understand where I'm coming from.
Is it still a felony worth spending years in prison for? I am speaking practically, not ideologically. The main thing this user did was to exploit advertisers paying out on the world's most gameable metric (exactly as our site would be doing in the above example). Yet that, in and of itself, is not a crime, which is why they ended up relying on wire fraud charges.
He’s indicted for mass streaming his own songs to pump up the play count. It’s outright fraud.
Go big or go to jail
> "Michael Smith exploited super intelligence technology to generate a fraud,” said U.S. Attorney Jamie McDonald. “By flooding music streaming platforms with automated bots in the place of consumers, and fake songs in the place of creativity, Smith robbed millions in royalty payments from genuine artists and their fans. This Office is committed to ensuring the integrity of all markets, and protecting the public from those who use super intelligence for fraud."
Wow, uh, he had a time machine?
> Smith’s streaming fraud lasted from 2017 to 2024
It seems that what he is guilty of is to generate some fake users pretending to listen to his songs, is that right? I can see how it is fraud, but how is it different from all the dark patterns used by newspapers to generate more page prints (like auto-refreshing pages)?
Eh.
> Is it a crime to publish an AI generated song?
It's not. And a lot of this fraud was done with non-AI songs. But it helps show his attitude.
> It seems that what he is guilty of is to generate some fake users pretending to listen to his songs, is that right? I can see how it is fraud, but how is it different from all the dark patterns used by newspapers to generate more page prints (like auto-refreshing pages)?
Does that get them more money just for showing the ads? Usually the number of page views is up to you. If you find a way to make oodles of money off a mechanism like that, it very well might be criminal fraud!
They were just simple short instrument loops (a basic drum machine beat, a short bass line, a few piano notes) repeating indefinitely, white noise, drones, and such.
The fraud is only possible because of the way the streaming revenue sharing is split. The way royalties are paid by streamers can basically be summed up by the equation: (total subscription revenue * some agreed to percentage) / total hours streamed by all subscribers for all songs * total hours your songs were streamed.
So let’s say total revenue is $1 million and the artists get 10% of revenue, and there is a total of 1 million hours of streamed music by those subscribers. This means that artists will earn 10 cents for every hour their song is streamed.
On the surface, this seems like a pretty fair way to distribute revenue.
However, what this means that a user who streams more will generate more revenue for artists than a user who streams less, even though the two users pay the same price for their subscription.
For example, imagine a streamer only has two customers, Bob and Alice. If Bob listens to 99 hours of Artist A, while Alice listens to 1 hour of Artist B, then Artist A will get 99 times as much revenue as Artist B, even though they both have one fan and they both pay the same.
So you can see how this could be abused; if I sign up for an account and have it stream my music 24 hours a day, 7 days a week, I am going to have more hours streamed than 20 average users, meaning I end up earning more revenue in royalties than I paid for my subscription (since even though I only get 10% of the revenue, my 20x the average subscriber volume means I end up with 2x my subscription cost in revenue)
If I do this thousands of times, I can make serious money… like this guy did, apparently.
There is a simple fix for this, and I think it actually makes it more fair for artists; do the revenue split on a per user basis. In other words, if 10% of revenue goes to the artists, you take 10% of an individual subscribers subscription price, and divide it up amongst all the artists that user streamed based on time streamed. For example, if my sub costs $10, $1 goes to the artists I stream. If I only listen to one artist, they get the $1 no matter how many hours I stream.
This ensures that a single user can never direct more than their own 10% to an artist, and you would have no incentive to stream your own music.
This seems fair and reasonable to me.
It's much fairer which unfortunately pisses off the Big 3 major publishers, and they've blocked any attempt by streamers to use this model.
I believe Spotify briefly attempted it in the late 2010s before having to shutdown a similar revenue-sharing system as the one you described from pressure by the major labels.
Makes me wonder if the big players aren't bot-farming too... Perhaps to get to the top of 'most played' rankings...
Your example makes it perfectly clear, even though BobTunes has 730 hours/month in this example from Bob, in the aggregate of all users listening time their share % of total listening time will be much lower than the total listening time of Ed Sheeran; Ed Sheeran will have millions of people maybe listening a few minutes/an hour while BobTunes might have low thousands, you'd need every BobTunes listener to stream orders of magnitude more time to compensate.
In the current scheme, having major artists with a broad audience listening a little gets a share of the pot that every subscriber funds, for the labels this is great, they make money from the total pot even from non-listeners of their artists, smaller artists from indie labels get a smaller share of the total pot even if they have mega-fans that only listen to them.
That's exactly why the system you describe doesn't exist, the major labels would lose money since they won't collect a share of the pot from subscribers who aren't interested in their artists (like me, for example).
Oh it was cortesoft who proposed this and not you. Should've double checked instead of going with the idea that you forgot your position in 2 replies.
The industry is notoriously corrupt, and not a stranger to pay-per-play of various kinds.
Removing the hours-played incentive puts a lot of downward pressure on the curve of “revenue increases when a song/album goes viral”. You still get some of that via massively increased listener counts when you go viral, but with your proposed formula, that number is way attenuated by the number of artists the average person listens to.
Spotify and friends have an incentive to attract and keep lots of artists so they’ll release new content on the platform promptly. Having a revenue model that pays big dividends in the event of a breakout hit is key to attracting artists and/or their labels.
Going viral viral means lots of different people listening to you, and this method helps those people more. A wider audience that listens to fewer hours of your music is better in this scheme compared to a smaller, dedicated audience which is better in the current scheme.
> The US Justice Department gives the example that the entire catalogue of Taylor Swift received 9.3 million streams on YouTube Music from family plan streams in April 2023., In the same month, Smith’s bot accounts used family plans to fraudulently stream his AI-generated music 80.9 million times.
Basically, the guy got very greedy and generated roughly 10x more streams than a widely popular artist.
It makes me wonder that, if he did significantly less streams, would he have been caught? Are there other fake streams flying under the radar?
Try here: https://www.p3tips.com/Drill.aspx
He certainly didn’t defraud artists or their fans. This is falso framing. He defrauded the streaming platform, which I’m sure the jury would be far less empathetic towards.
So the agencies are forced to pretend every ridiculous thing their king says is a great idea.
I gather these are cards that he opened and funded, not stolen cards. I'm surprised at this scale it wasn't detected much sooner. I gather that these accounts had to be listening a lot in order to generate more royalties than the subscription fees.
People here in HN seem to believe that royalty collecting companies are some sort of charitable organizations for the benefit of the artists. But their conduct and practices range from questionable [1] to outright fraudulent [2]. And now they manage to fly below the radar, because everyone (artists included) is busy bashing Spotify. These companies would sue Spotify out of existence had they offered the option to directly pay the artists instead of going through them.
[1] https://www.reddit.com/r/japan/comments/1302np/jasrac_this_i...
[2] https://torrentfreak.com/huge-scandal-engulfs-greek-anti-pir...
what always fascinates me about crime like this is, if this guy hadn't tried to make 8 million dollars with 10k bot accounts and boosted himself straight to the top, he could have easily made a few thousand per month. How are people clever enough to set this scheme up to begin with but don't consider that you maybe shouldn't try to alert the entire fraud department
Our legal system has been turned into a tool to punish the poor and enrich the wealthy.
was it ever othrewise?
When does he stop qualifying as the poor?
I need this guy’s lawyer
Super intelligence. Aha. :)