War for the Web
02 12.11

The Internet and Piracy

The Internet opened a whole new can of worms for Intellectual property owners. Theft and Piracy have always been a problem for commerce (just ask the fashion houses, and the guys who hustle fake stuff on canal street), but the Internet increases the scale and volume of piracy the same way it does for business in general. In addition, particularly for movies, books, news, and other property that can be readily digitized this problem is particularly severe, as the actual transfer of goods can take place online, without any need for the participants in the transaction to meet. Most problematically, however, this also allows content to be taken from one site, re-attributed and re-posted on another website.

The traditional way that this kind of illegality would be dealt with is through the court systems. The owner of the intellectual property in question would file a lawsuit, and would either lose or win in front of a judge or jury of their peers. This was deemed too costly and time consuming for rightsholders, so in 1998 congress passed the DMCA, which allows rightsholders to issue “takedown” notices to websites hosting infringed content. The websites then remove the content, or face lawsuits. This is a bit of a balance as it forces the copyright holders to do the work to take down a post, and protects websites where users post content.

Users posting content has driven some of the largest businesses the Internet has. Youtube, Facebook, Vimeo, and many others use content posted by users to sell ads. It is an important part of e-commerce.

The new bill that the house is considering (SOPA) would *ahem* change the way this works, and has the potential to do a lot of damage to the ecosystem that makes up a profitable, economical Internet. The main thrust of the bill is that rightsholders would make the justice department aware of websites that exist solely for infringing. Then the Justice department could file charges against those sites and shut them down in a couple ways. First, advertisers would be forbidden from doing business with them. Secondly, credit card companies would be forbidden from doing business with them. Thirdly, anyone who does business with them would open themselves up to a lawsuit (including credit card companies and advertisers).

Sounds pretty reasonable, but it isn’t and here’s why. First off, the definition of a website that exists solely to infringe is vague at best. Viacom has previously asserted that youtube is one such site. Second, because the bill would make sites that host user content liable for said content, and open to litigation and essentially excommunication from commerce at the drop of a hat. The real problem is that even though this is all supposed to work through the justice department, even the allegation that a website is hosting user content would force careful companies to stop doing business with them. Not many advertisers and credit card companies want to open themselves to litigation, so if a website was accused of infringing, then it would likely be dropped like a hot potato from all forms of revenue, whether or not the allegations were true.

Also, rights holders have a history of sending takedowns for content they don’t own, but rather see as competition. Time Warner has done it, as have others. This new bill would give them the opportunity to do the same thing with entire websites rather than just isolated pieces of content. Crazy.

There’s also a really good article on arstechnica about why this doesn’t really matter, since the judiciary is doing it already anyways. You can read that here. The Internet is changing people, be aware!

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