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.

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.

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.

The crime is fraud, and if he was using the service as offered he wouldn't have thousands of accounts pretending to be different people.

Are any major corporations doing something similar to this, play-botting to get other people's royalty money?

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.

> he used fake email accounts and fraudulently-obtained debit cards to create the Bot Accounts

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.

> isn’t the United States a free market

No, far from it. A free market doesn’t have regulations, subsidies, tax incentives, bailouts, etc.

Fraud isn't a new concept.

> 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.

> What crime did he actually commit?

Fraud. https://xkcd.com/1494/

> 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 merely by using their service as presented, users have take on responsibility for representing that they will abide by the listed whims. When it turns out that users' interests differ from the corpo's whims, and a user does something they majorly 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.

from the article, the crime was that he thought about using a payment system to transfer misrepresented income

> 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

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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.