The online world is in a spin over new proposed legislation recently introduced in the US to target online copyright pirates.
In recent days, prominent online business such as Wikipedia and Google have publicly signalled their objection to these proposals – in the case of Wikipedia by imposing a 24-hour “blackout” on its English language website and in the case of Google by symbolically placing a black box over its logo when US-based visitors visit its site. So just what is all the fuss about?
The two pieces of legislation at the heart of this controversy are for the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (or PIPA) and the Stop Online Piracy Act 2011 (or SOPA). Both of these bills were introduced in the US parliament in 2011 (in the House of Representatives in the case of PIPA and in the Senate in the case of SOPA) and both take a very similar approach to achieving the same basic goal, namely to give US copyright owners stronger tools to combat foreign websites that are enabling or facilitating copyright infringements. Opponents of the legislation say that it goes too far and may inhibit the functioning of the internet as we know it today. Some even have said that the bills, if passed in their current form, will “break” the internet.
So what do SOPA and PIPA actually do?
Well, the bills have been in a constant state of movement as different US legislators have weighed in on the issues. However, at a high level, each bill allow a the US Attorney General to seek an order against foreign sites that are directed at US users and, in the case of SOPA, are used to commit or facilitate criminal violations of US copyright laws, or in the case of PIPA, are dedicated to activities that would infringe such laws. The bills also allow for a private procedure under which a US copyright owner could seek a similar order against foreign sites that are used for infringing purposes.
If granted, the orders would be enforceable against other internet businesses in order to effectively shut down access to the offending site. For example, the orders could be enforced against:
internet search engines to require them to remove the offending site from their search results;
payment network providers to require them to prevent their services from completing payment transactions through any account used by the offending site; and
internet advertising services to require them to cease making available advertisements to or for the offending site.
Where have the battlelines been drawn?
Unsurprisingly, given the potentially dramatic impact of such orders, these proposals have drawn a swift and strong reaction from all sides. On one side of the battlelines stands a group of significant US copyright owners (and organisations representing the US film, television and music industries) who have been struggling for years to find an effective way to prevent online activities that infringe on their rights. They maintain that it is impractical for copyright owners to pursue individual infringers who may be based overseas and, as such, have been advocating the introduction of mechanisms that will force internet intermediaries to help shut down these infringers. On the other side of the battlelines stand companies, such as Google, Yahoo, Facebook, Twitter, Wikipedia, YouTube and others, whose business it is to help distribute and improve access to information online. They say that the legislation is too broad and could impede legitimate internet activities. Civil libertarians have also argued that the legislation does not include sufficient protections or rights of recourse for innocent website operators.
For its part, the Obama administration has refused to support the legislation in its current form saying that although there is a need to combat online piracy, any new legislation must be “narrowly targeted” and must not undermine the “dynamic, innovative global internet”. These comments invoked the ire of some powerful media owners, including Rupert Murdoch who tweeted that “Obama has thrown in his lot with Silicon Valley paymasters who threaten all software creators with piracy”.
So could SOPA and PIPA really break the internet?
As already mentioned, a key issue is that each of the bills is drafted in very broad terms and could potentially affect websites that are not really operated by “bad guys” who are deliberately seeking to encourage copyright infringement. For example, SOPA potentially applies to any foreign website that is “facilitating” the commission of copyright infringements – this might capture online directories that provide links to third party infringers, search engines that enable users to locate infringing websites or websites that host user-generated (and potentially infringing) content. Opponents of the legislation say that by threatening such sites, SOPA and PIPA will inhibit information-sharing practices on the internet and will stifle development of new online businesses. Initial reactions from the venture capital industry indicate there may also have a chilling effect on new investment in internet start-ups that could potentially be affected by the legislation, making it more difficult to get these businesses off the ground.
How will SOPA and PIPA impact on Australian businesses?
Should the furore in the US be a real concern for Australian website operators? Clearly the answer must be yes. While Australian-based websites may not be directly subject to US laws, legislation like SOPA and PIPA may be used to effectively cut these websites off from lucrative US audiences and also from the internet utilities that help connect them to other markets around the world. In particular, if an order was made under SOPA or PIPA against an Australian website, the website may find itself removed from key US-based search engines and unable to process online transactions through US payment intermediaries or receive advertising revenue from US advertising aggregators. The combined impact of this could be devastating on the website’s business. At the same time, it may be difficult for the Australian website operator to marshal resources to mount a proper defence in the US courts. Conducting court proceedings in any overseas jurisdiction, let alone the US, can be expensive and time consuming. In addition, with the way that SOPA and PIPA have been constructed, there is a risk that the website will remain blocked while the proceedings are played out. In this case, even if the website’s defence is ultimately successful, the operator’s business may have suffered fatal harm.
While the debate continues to rage, it is hard to say whether either SOPA or PIPA will be passed into law in anything like their current form. However, Australian operators would be well advised to monitor developments closely. Ironically, these developments are taking place just as the Australian government is seeking to consult with industry on the possibility of extending existing safe harbour protections under Australian copyright law. The Australian safe harbours currently apply to protect ISPs and other carriage service providers against liability for infringements that others carry out using their services. However, the Australian government is considering broadening the scheme to also protect other operators of online services, such as website operators, who do not necessarily provide any carriage services. This would bring Australia closer into line with safe harbour protections that apply in the US under the Digital Millennium Copyright Act, though clearly any expanded protection would be seriously undermined by legislation like SOPA or PIPA.