Finnish Bureaucracy Takes Issue With Crowdfunded Textbook

linjaaho writes "Senja Larsen, who runs popular Facebook study group Senja teaches you Swedish, collected $14,161 via Kickstarter's crowd funding service. The project caught much media attention in Finland (TV and all major newspapers), since it is the first crowdfunded book project in this country, and among the first Finnish crowdfunded projects. (Previous ones include the movie Iron Sky, the role-playing game Myrskyn Sankarit, and the Wishbone headphone wire manager). Now, after successfully collecting the funds for the book (and after the book has been edited and printed), the National Police Board of Finland has asked Senja to submit a statement [PDF; Finnish] concerning using crowdfunding to finance a project [PDF; Finnish] and the terminology used. It is possible that all the funding collected must be returned. The main problem is that direct translations of terminology at Kickstarter, such as 'bounty' and 'support,' are interpreted to mean collecting money without giving anything back, and this kind of operation requires a permit which can be only given to associations, not to private persons, and it takes long to apply for such permit."

Comments

.gov gone wild

[Kergan]

Yet another case of bureaucracy gone wild...

Re:.gov gone wild

[Keruo]

This legislation has very valid reasons to exist, it prevents money laundering.
It's not bureucracy gone wild, just common citizen doing things without finding out all required details and getting slapped by government for not getting permits to operate.
This stuff is taught in elementary school, maybe the author should have paid more attention at Yhteiskuntaoppi classes.

Re:.gov gone wild

[Anonymous Coward]

It's not bureucracy gone wild, just common citizen doing things

So you're quite happy to live in a world where every time you want to "do things" you have to go scouring through law books and beg the government for permission?

Re:.gov gone wild

[Jerry Smith]

It's not bureucracy gone wild, just common citizen doing things

So you're quite happy to live in a world where every time you want to "do things" you have to go scouring through law books and beg the government for permission?

http://www.forbes.com/2010/07/14/world-happiest-countries-lifestyle-realestate-gallup-table.html

I guess s/he probably is. And since his/her gouvernment http://en.wikipedia.org/wiki/Corruption_Perceptions_Index is considered pretty decent, Kickstarter might rethink some of the terms and conditions. They could be misinterpreted, after all.

Re:.gov gone wild

[ewanm89]

Kickstarter is operating under US law in terms of monetary transfers, from the Kickstarter FAQ:

To be eligible to start a Kickstarter project, you need to satisfy the requirements of Amazon Payments:

—You are 18 years of age or older.
—You are a permanent US resident with a Social Security Number (or EIN).
—You have a US address, US bank account, and US state-issued ID (driver’s license).
—You have a major US credit or debit card.

Re:.gov gone wild

[zyzko]

Actually, in this case the defense of Senja Larsen is that she is doing business, not collecting money without giving anything back - which is easier in Finland than getting a permit for asking money for "nothing" or a "good cause".

The law is considered by many associations a relic and it can be abused - for an example Electronic Frontier Finland was sued by the state because their website stated that according to their rules they can receive donations and there was an account number visible. State lost - but they "had to prosecute" because someone anonymously demanded so.

On the other hand the law:

- Prevents money laundering.
- Makes it easier to shut down shady operations which for an example state to collect money for cancer kids and the money goes actually to Thailand vacations of a few "charitable persons" and the kids get two used playstations - at least there is some oversight on who can publicly collect money.

Re:.gov gone wild

[asdf7890]

It's not bureucracy gone wild, just common citizen doing things

So you're quite happy to live in a world where every time you want to "do things" you have to go scouring through law books and beg the government for permission?

And I suppose you are happy living in a world where kids can't have decent chemistry sets because TERRORISM!!1!, and where it is difficult to get through an airport with a laptop because TERRORISTS!!!, in fact where you have to be intimately rubbed down by the TSA in said airport because TERROR!!!!!!!, and so on and so forth.

America: the land of the brainwashed-into-thinking-they-are-more-free-than-others.

Re:.gov gone wild

[cheekyjohnson]

How do you know he doesn't oppose both?

Re:.gov gone wild

[Tore S B]

The person is operating a business - admittedly, on non-standard terms - but she is running a business. That does include a requirement to understand and comply with the basic laws of the land. And she has done it in a way which runs afoul of some laws that are there for good reasons but which are not impossible to get around.

It's bureaucracy doing exactly what it is supposed to do: Ensuring a functional market by regulating it competently.

Re:.gov gone wild

[Kjella]

So you're quite happy to live in a world where every time you want to "do things" you have to go scouring through law books and beg the government for permission?

In a lot of cases where I'd call it preemptive crime prevention, yes. For example if you pretend to be a doctor but don't have a license to practice medicine, we don't have to wait for an actual malpractice case. You are already breaking the law just by trying. If you operate a restaurant I don't mind that you have to have a permit so that health inspectors both know you exist and have a right to investigate your facilities before you put people in the hospital. If you pretend to operate a charity, I don't mind that you need a permit that requires documentation that the money goes where you say it's going and is not a fraud. I don't mind that the government must approval of your rental units before there is a house fire where someone doesn't get out because there's no fire exit and you're charged with manslaughter.

A permit is not something the government should hand or not hand out on a whim, it should have a clearly defined list of requirements and those who fulfill the requirements should get a permit. Of course you could say that the "free market" should fix this, that people would simply stop going to unsanitary restaurants but the practical experience has been that the market hasn't fixed this so instead of quoting dogma we found a solution that did. Sure you can have too much bureaucracy as well, but a lot of the time the businesses trying to fly "under the radar" without a permit do so because they are breaking a lot of other laws and regulations that are there for a reason. If I just pick a place to eat at random I don't expect great food, but I do expect that it's fit for human consumption. It's really not too much to ask.

Huh?

[ericloewe]

Aren't you supposed to get something (say, a copy of the final product) in exchange for your contribution? Sounds like some Bureaucrat thinks his workload is a bit low...

Re:Huh?

[Seumas]

No. You are making a donation. Period. (Note that it is not a *charitable* donation, however). Kickstarter's literature specifically uses the word "donation".

The only requirement for the project to receive your money is that, collectively, the amount of money pledged reaches their pre-defined goal.

Kickstarter states that any promised rewards *should* be fulfilled, but those are essentially an aside to the pledge itself and if the reward is never fulfilled, you essentially have no recourse whatsoever. Well, that's not entirely true -- you can try to get it from the person who is running the project, but since Kickstarter never actually touches the money, they have no mechanism through which to refund you. Assuming they even would bother with a process to facilitate that -- which they probably wouldn't, since they aren't even willing to establish a process to vet submitted projects.

In the few years that Kickstarter has been going, there have been no catastrophic horror stories. There have been a few scams detected while in-the-act and cancelled and there have been some that are taking their own sweet delayed time to fulfill them, but I think we're a good year and a half away from any potential major backlash due to lack of fulfillment. That's because projects really started to surge once Double Fine threw their hat in the ring and most projects after that won't be culminating for some time, still.

Of course, you should get something if you're told that you're going to, but you should also not back a project with your rent-money. I think of every dollar I throw into Kickstarters as a spin at the roulette wheel. If it fails (to follow through), I paid the price of admission to go along for the ride and get the updates and see how the project goes. If it succeeds, I get something cool that I wanted, too. Not to mention, not every kickstarter is about "if you pledge $20, I'll give you a thing". Sometimes it's just "I want to produce a play in my town, please back me to get it going". Video games and board games get the most attention, but there have been some cool things like a project to massively automate the preservation and archival of a massive collection of black history photographs.

Unfortunately, a lot of people immediately scream "REGULATION DURP DURP!". I don't see the point in that. You're free to chip in your money or not and the up and downside is clearly laid out. I think people who scream about that tend to misunderstand (and have never even visited the website). They somehow think you're literally investing in the project in a real way. As in, a way that would require filings and SEC administration.

What is going to happen is that Kickstarter will remain the king for awhile and if they ever seriously falter, they will have to quickly get their shit together (vetting projects and getting more involved in their facilitation to assure backers -- perhaps even to the point of establishing SafeHarbor gaurantees like eBay and Amazon do for purchases from merchants that use their marketplaces)... or someone else will do those things and eat their lunch. Competition will ensure that if this remains a viable idea that the public is interested in, someone finds a way to improve upon it and make it more stable.

In the meantime, I've paid out about $1,600 of about $5,000 in pledges. Had some great experiences (met some fantastic people I would never have imagined I would), got some cool games and albums, kept up with projects via lots of updates. Participated in community decision-making projects on some things I've liked, and jumped in as a beta tester (actual beta-testing; not the modern video game industry definition of beta-testing as marketing) and have seen some really passionate people rewarded with community interest in their projects. If I get screwed on a couple of projects, I'll get over it.

This is a non-issue in this particular case.

[dnaumov]

As can be seen from the lawyer responce (the "concerning using crowdfunding to finance a project [PDF; Finnish]" link in Summary, while asking for money while giving nothing in return in Finland requires a license, on Kickstarter, people submitting money are actually making a pre-order of a product (the book in question), so that particular law does not apply.

Re:Governments are the enemy

[AK Marc]

People asking for donations without the intention of delivering are a major problem. That fraud takes billions every year. Finland has a law to cut down on that. That way, if someone is asking for money, you know they are legitimate, as they have filed all the proper papers and are traceable, even if not fully vetted. I don't see anything unusual or even onerous about this law. But it seems silly that someone entering a business venture didn't find out commonly known rules related to it.

Sounds crazy to a USian

[shaitand]

Basically this seems to suggest that all charity and donations would require a special permit. Even asking someone for help when starving.

But after a bit of thought, it occurs to me that people in Finland don't have to beg for help. Here you need no permit but the collection jar on the counter is for something like a child with cancer. In Finland you wouldn't need a collection jar. Poor and hungry or in need of shelter would beg here. In Finland they would be fed, housed, and given medical treatment without any begging.

We truly are barbaric here in the US in some ways.

It says "Oxo" on buses, but they don't go there

[Hognoxious]

Just because they aren't called donations doesn't mean that in reality they aren't.

See also: waddling, quacking.

According to a Finn I knew...

[Hognoxious]

The main problem is that direct translations of terminology at Kickstarter, such as 'bounty' and 'support,' are interpreted to mean collecting money without giving anything back

It's impossible to translate anything into Finnish. Even if it's in Finnish to start with.

In the US, there's the Mail Order Rule

[Animats]

In the US, Kickstarter projects are subject to the FTC's Mail Order Rule. The Mail Order Rule basically says that if you order something, it has to be delivered or your money refunded within a specified time. The seller can specify a firm future delivery date, and if they don't, there's a 30 day default. Also, if the seller can't deliver, they must refund your money without you having to ask for it. The seller can ask for more time, but if you don't respond, they have to refund the money. This is a good rule; it keeps the mail order industry honest.

In the early days of the Web, many companies that accepted online orders got into trouble with the mail order rule. Usually, this was because they had online ordering but a paper-based order fulfillment system, and accepted far more orders than they could fill. Then they made excuses rather than refunds. The FTC fined companies for that. Now, everybody serious has the shopping cart system connected to the inventory system, so the order isn't accepted if it can't be shipped.

So Kickstarter companies in the US can get in trouble if they don't deliver. ZionEyes, with their vaporware "HD glasses", ran into this.