With only a few clicks and no fees, users in China and Iran turn on Hola to access Facebook. Users in the United States can use it now to stream better coverage of the 2014 Winter Olympics, or to expand their Netflix options. Hola’s website boasts that it allows users to “enjoy any site from any country,” by adding middlemen between your computer and the site you want to access. This browser plug-in is a virtual private network proxy that works by using users’ idle computer power to help other users access sites of their choosing. The site caches content on users’ computers, and later accesses that content for other users as requested. Hola has around four million users, a number that continues to skyrocket as press attention grows.

But is it legal? The Israel-based company’s website carefully tiptoes around any question of legality. Sites like Lifehacker extol the plug-in’s ability to skirt location access requirements of Hulu, Netflix, Pandora, and other web media players. Hola’s site merely proclaims general goals of bypassing censorship, speeding browsing, saving bandwidth costs, and improving online privacy. The end user license agreement explicitly states that users must still comply with the terms of use of whatever site Hola is used to access, as well as “local, state, national and international laws and regulations.” On copyright, Hola is less forceful:

We respect the intellectual property of others, and we ask you to do the same. It is important (and a condition of these Terms) that you comply with all copyright laws and other provisions in connection with any content agreement to which you may be a party.

Hola seems to intentionally skirt the question of its legality, perhaps hoping to fly under the radar as long as possible. Business Insider’s Aaron Gell suggests that so long as Hola increases interest in Netflix, Hulu, and other media players, perhaps the company may avoid legal action until licensing deals are affected. But if interest in Hola continues to skyrocket, rendering players’ location restrictions ineffective en masse, major media players will surely notice.
Courts have yet to specifically address similar place-shifting technological innovations. The cases most relevant to Hola’s technology generally involve time-shifting devices, and the holdings seem narrowly tailored to the specific technology in question. The Supreme Court’s most relevant guidance comes from two cases: Sony v. Universal and Grokster v. MGM. The Sony court ruled in favor of the legality of VCR technology, allowing home television owners to use VHS tapes to record live television. The Court held that a “substantial noninfringing use” could be reason enough to allow equipment used for illegal means to remain on the market – but gave little explanation as to what a “substantial noninfringing use” might be. The Grokster court clarified little of this confusion, skirting the Sony ruling and putting forward another line of secondary liability: inducement, holding liable “one who distributes a device with the object of promoting its use to infringe copyright.” The Grokster court shifted focus to intent, holding Grokster liable for its decentralized file-sharing program.
Perhaps Hola’s touted goals of combating web censorship and increasing privacy would be strong enough “substantial noninfringing use[s]” to allow a Sony parallel to prevail; perhaps its rampant on-the-ground use to skirt location restrictions on Netflix, Hulu, and other online media players would push the technology into Grokster territory. Ultimately, perhaps “is it legal?” may be best answered with a simple, “We don’t know.” The Supreme Court’s blurred lines on exactly how to handle new technologies that potentially lead to secondary copyright infringement leaves little guidance. Hopefully the Court’s upcoming decision in ABC v. Aereo, a case involving place-shifting broadcast television through individual transmissions to subscribers’ online accounts, will bring guidance to how courts should treat innovative technologies with both substantial noninfringing (whatever that may mean) and infringing uses.
Cydney Swofford is a J.D. candidate, ’15, at the NYU School of Law.

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