Companies at Risk Should SOPA Pass

Today, websites like Wikipedia and Reddit are protesting the Stop Online Piracy Act (SOPA) and PROTECT IP Act (PIPA) by blacking out their websites. The basis for this protest is to make Americans aware of the implications if these bills were to be passed by Congress; the Senate votes on PIPA January 24, and the House Judiciary Committee restarts its work on SOPA beginning in February.

The purpose of the legislation is to target foreign companies “whose primary purpose is to sell stolen or counterfeit goods,” however, opponents of the legislation say “domestic companies could still be held liable for linking to their content.” Although there are companies who purposely avoid investing in certain industries due to the copyright risks, under SOPA and PIPA, the risk “would hit just about any Internet company.” Brad Burnham, managing partner at Union Square Ventures said that SOPA and PIPA, “take the risk of frivolous litigation… to the entire Internet.”

A study conducted by McKinsey Global Institute (MGI) found that the “Internet accounted for 21 percent of GDP growth over the last five years among the developed countries MGI studied.” The US led the group “capturing more than 30 percent of global Internet revenues and more than 40 percent of net income.” Should SOPA pass, all companies who have any presence online may be in jeopardy because copyright holders are allowed to enforce the law empowering them “to push around anyone who may compete with them under the guise of upholding the law. Giant media companies… could easily take advantage of this situation.” How will affect business? And, imagine the number of lawsuits and potential costs that could be passed on to the American public.

Companies at risk?

A blog post on InternetService.net—“10 Companies SOPA Could Destroy and Why”—truly hits to the heart of why so many companies and a vast majority of the American public oppose SOPA and PIPA.

Facebook. Facebook users are currently able to post any link they like to their walls or those of their friends; those links can house legal and illegal content with no repercussions to the site itself. Under SOPA, advertizing revenue and any payments could be blocked for the entire network, should one complaint of infringing content be filed.

YouTube. Anyone who uses video-sharing giant YouTube has, at some point, come across a clip that’s been removed due to copyright infringement complaints. In the event of SOPA’s passing, each time one of those videos are reported, all revenue generated by the ads on the site would be blocked. Millions of dollars could be potentially lost.

Twitter. The number of tweets posted by Twitter users each day is estimated to be in the range of about 50 million; this mind-boggling volume of information shared by users worldwide makes it almost impossible to monitor on an individual basis, opening the door for SOPA-infringing complaints that block ad revenue. One tweet with a link to copyrighted material could easily shut down all payments to the site until the situation is resolved.

Google. In addition to limiting the search results that would legally be allowed, Google’s cash cow AdSense could also be affected by SOPA. This one-two punch might not spell the end for the company immediately, but could change the way services operate to the extent that they’d be virtually unrecognizable by pre-SOPA standards.

MegaUpload. File locker sites like MegaUpload definitely house a vast amount of pirated media, but they’re also frequently used for legitimate file-sharing and backup purposes, which is where the conundrum sets in. While other lockers at least pay lip-service to the idea of DMCA laws, MegaUpload blatantly thumbs their collective noses at the notion of removing copyrighted material. As a result, SOPA is ostensibly worded specifically to police such sites, up to and including blocking access to American Internet users altogether.

Tumblr. With one click, Tumblr users can share links to almost anything; this feature would effectively cripple the site in the event of SOPA’s enactment. Concerns about the bill spurred the site’s administrators to launch a simulated censorship “blackout,” during which users were presented with a real-life representation of what the bill could do; the change prompted users to call their House Representatives at an average of 3.6 calls per second at its peak.

Etsy. The online marketplace for handcrafted, vintage and artisan wares Etsy could find themselves devastated by SOPA in the event of a copyright infringement accusation. The sheer number of products offered by sellers creates a dilemma for the site; approving each item before posting would be virtually impossible. Should a craftsperson offer one product with infringing artwork, the bill could stop payment on each and every transaction facilitated by the site.

Flickr. Though the site makes a concerted effort to prevent the hosting of copyrighted images and takes removal requests very seriously, Flickr could easily be disabled by SOPA. Blacklisting the site and blocking it at a DNS level would be well within the scope of the bill, should one illegally shared image be discovered.

Reddit. The Reddit community has been among the most vocal in its opposition of SOPA, which has been dubbed the American Internet Censorship Act by users. Because the foundation of the site is sharing content, it would be impossible to regulate every shared link. Administrators have publicly stated that they would almost certainly be forced into shutting down if the act passes.

Digg. Like Reddit, Digg is primarily a content sharing site. Links to streaming video and other information are shared by users and suggested; compliance with SOPA would require that each link be housed on a site with absolutely no infringing content. Essentially, a legitimate link could still wreak havoc, should the linked site contain even one illegally shared piece of content. Combing every site in its entirety before allowing a link to be posted would be impossible, which could easily lead to Digg’s demise.

It will be interesting to see how things unfold especially since the White House stated its opposition; "We will not support legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic innovative global Internet.”

SOPA Supporters