01/11/2012 11:19 (UTC-08:00) Pacific Time (US & Canada)
While the Attorney General of Utah Mark Shurtleff came out strongly against rogue websites and in support of SOPA and PIPA, he is not the only distinguished member of the law enforcement community to support these bills. The fact is law enforcement organizations, which are on the front lines managing the increasing dangers of foreign owned or operated websites, strongly support both bills.
U.S. Attorney General Eric Holder announced the launch of a public education campaign to increase Americans’ knowledge of the threat IP crimes pose to America’s economic prosperity and public safety. In addition, 15 leading public safety and law enforcement groups including the National Criminal Justice Association, the National Troopers Association, and the National District Attorneys Association, urged Congress to support and enact SOPA and the PROTECT IP Act.
And since they’re those out there so caught up with the use of words, let’s take a look at some of the language law enforcement has used to shower support on PIPA and SOPA. The President of the Fraternal Order of Police said the PROTECT IP ACT “would strengthen the ability of the United States to take action against foreign ‘rogue’ websites that traffic in counterfeit and pirated products,” while the National Association of Attorneys General urged Congress to enact these bills because “legislation is needed to disrupt the counterfeiting and pirate business model by cutting those sites off from the American marketplace.” The President of the Major Cities Chiefs’ Association, which represents 63 of the largest police departments in the nation, called on ISP’s to join in the fight against rogue websites who “routinely violate the intellectual property of U.S. companies and individuals.”
Their assessment of the severity of illegal activity committed by rogue websites is reflected in the 2011 seizure statistics issued by the U.S. Customs and Border Patrol Office of International Trade, which notes that “[t]heft of intellectual property is a serious crime,” and details the type and extent of seizures of counterfeit products, including pharmaceuticals.
01/10/2012 13:28 (UTC-08:00) Pacific Time (US & Canada)
Julian Sanchez, a research fellow at CATO, recently wrote a post on Cato@Liberty, which once again offers tired arguments about why the theft of intellectual property is not such a bad thing.
In his post, Sanchez’s main argument is that theft has a negligible economic impact – only some inefficiency – because theft is beneficial: that is, the consumers who access stolen content can choose to use the money they “saved” to purchase other products. Extending this argument, shoplifting has no economic impact since shoplifters can spend the money they “saved” on other products, a perspective which runs counter to treatment of crime in other “costs of crime” studies
Or taken another way, credit card fraud against consumers has no economic impact on the general economy since the person or company committing the fraud can spend his/her profits elsewhere. To support this argument, Sanchez pointed to a flawed Government Accountability Office report, which cited anonymous “experts” who viewed counterfeiting and piracy as “mainly redistributions” of wealth and thus argued that “any positive effects of counterfeiting and piracy on the economy should be considered as well as the negative impacts.” The Progress & Freedom Foundation, already accurately deconstructed the fallacy of this “expert” assessment in: “Punk’d: GAO Celebrates the “Positive Economic Effects” of Counterfeiting and Other Criminal Racketeering.”
Sanchez also sought to challenge the use of economic multipliers to assess the effects of piracy and counterfeiting on industry suppliers and other downstream parties. To support this argument, Sanchez again chose to quote a portion of the GAO report citing anonymous “experts,” leaving out text that contradicted his assertions (the part excluded is in bold): “Most of the experts we interviewed were reluctant to use economic multipliers to calculate losses from counterfeiting because this methodology was developed to look at a one-time change in output and employment. Nonetheless, the use of this methodology corroborates that the effect of counterfeiting and piracy goes beyond the infringed industry. For example, when pirated movies are sold, it damages not only the motion picture industry, but all other industries linked to those sales.”
He neglected to point out that most of the economic cost of piracy studies estimate the one-time effects in one year, if copyright piracy was eliminated and that they do not generally include activity by people who would not have otherwise purchased legitimately. He also neglected to point out the hundreds if not thousands of economic models using multipliers in a vast number of contexts. If Sanchez is saying such models cannot be used for piracy, it’s not clear why it would then be valid to use them for measuring impacts of things like tourism, the arts, or terrorism.
In conclusion, Sanchez argued against Congressional passage of the Stop Online Piracy Act, basing his reasoning on his own faulty logic that content theft and counterfeiting don’t cause widespread economic pain. And that’s where he is wrong – even the GAO concluded that “the problem is sizeable, which is of particular concern as many U.S. industries are leaders in the creation of intellectual property.”
The bottom line: SOPA, and related bipartisan legislation in the Senate, the PROTECT-IP Act, will help American businesses and American workers by making it more difficult for operators of rogue websites, often based overseas, to steal American intellectual property. These bills are supported by hundreds of businesses, consumer advocacy groups, labor organizations and intellectual property coalitions. The time has come for Congress to protect these workers and businesses and to put tired arguments like those being made by Sanchez to rest.
01/10/2012 10:32 (UTC-08:00) Pacific Time (US & Canada)
The BBC has an interesting report highlighting the fact that Google’s advertising services distribute large numbers of ads for illegal services, in this case unauthorized brokers of tickets to the 2012 Olympics in London. The BBC piece notes that Google removes the ads upon requests from police (or when they’re informed by the BBC that they’re about to be the subject of an embarrassing news report) – but also that Google keeps “keeps any money it might make from companies advertising illegal services before such adverts are removed.”
A couple points relevant to the debate over SOPA and the PROTECT IP Act:
• Advertising by purveyors of illegal products and services is a huge problem. Even without the enhanced procedures contained in SOPA and PROTECT IP, Google says that “In 2010, we took action on our own initiative against nearly 12,000 sites for violating this policy” against advertising by “infringing sites.” And in 2011, it took action on 12,000 more. While it’s nice that Google removed these ads “on [its] own initiative,” this clearly hasn’t solved the problem, and more needs to be done.
• Google readily admits that it profits from advertising of illegal services. It keeps its ill-gotten advertising gains – even after being informed by the police of their tainted source. Google could easily choose to hand over these corrupt proceeds to law enforcement, or to other worthy causes devoted to combating illegal online activities. But apparently its commercial interests trump doing the right thing. (One would have thought that having to pay a $500 million settlement for “knowingly show[ing] illegal ads for fraudulent Canadian pharmacies” would have tempered Google’s willingness to serve and profit from ads for illegal services. Apparently not.)
This is all just a reminder that many of the opponents of SOPA and PROTECT IP, while they like to portray themselves as brave Internet freedom-fighters, are in reality doing little more than protecting their own business interests. They profit from illegal activities, and they will vigorously resist legislation that seeks to put this practice to an end.
01/09/2012 13:49 (UTC-08:00) Pacific Time (US & Canada)
Writing in the Salt Lake City Tribune, Utah Attorney General Mark L. Shurtleff effectively hammers the point that Google, Yahoo and others have spent millions trying to distort – that states which allow rogue websites to operate unfettered will experience massive revenue reduction and job loss. Calling operators of rogue websites by their real name; criminals, Shurtleff goes on to write that these criminals “unload unsafe products and malicious computer viruses, perpetrate identify theft and engage in wholesale theft of America’s most innovative products.”
Shurtleff rightly contends that America cannot afford to lose one more job, let alone the shuttering of entire industries that can occur if online piracy continues unabated.
Yet, that’s exactly what failing to pass the PROTECT IP Act in the Senate, and the Stop Online Piracy Act in the House will allow. Industries that provide millions of dollars to local economies and thousands of jobs will be jeopardized. For example, in Utah the film and television industry is responsible for nearly 8,000 jobs and $385 million in wages. However, despite providing a tremendous economic benefit, Shurtleff points out “these industries and jobs are undermined by online counterfeiting and piracy.”
Hard-working Americans make great American products. We shouldn’t allow an international network of faceless criminals to seize or stifle this greatness.
01/05/2012 06:54 (UTC-08:00) Pacific Time (US & Canada)
Last night, Senator Chris Dodd, Chairman and CEO of the MPAA, spoke with Emily Chang on Bloomberg TV’s “Bloomberg West.” He talked about the importance of Congress acting now to pass legislation to target foreign criminal websites that profit from stolen American goods and content at the cost of American jobs.
He stated that the future of commerce and content on the Internet will be guided by technology companies and the entertainment industry growing together:
“The Internet has been an incredible asset for people all over the world, creating access to information that was unavailable even a few years ago. This ought not to be a situation where you have to choose between technology and content. Content needs technology and technology needs content; and these two communities absolutely need each other for the future.”
Senator Dodd also said we should focus on the real problem of foreign criminal websites:
“When you have international criminals, foreign sites stealing the intellectual property, the copyright of businesses, not only the film and television industry but also other industries that have knockoff products being stolen, intellectual property being stolen from aerospace, from things such as bulletproof vests and equipment for firefighters. This is a serious issue that deserves attention. I will give the technology industry credit for this. No one is arguing about whether we ought to deal with these rogue criminal foreign sites that steal American jobs and products. We all understand something needs to be done. We’re now arguing about how best to do this. And that’s a major breakthrough.”
12/21/2011 10:42 (UTC-08:00) Pacific Time (US & Canada)
The PROTECT IP Act in the Senate and the Stop Online Piracy Act target foreign criminal websites. They have broad bipartisan support and the rare backing of the AFL-CIO and Chamber of Commerce. There is nothing new about the techniques of domain blocking used to target criminals in the Stop Online Piracy Act. They are currently used to protect consumers and combat all kinds of harmful behavior including spam, phishing, malware, viruses, copyright infringement and other forms of Internet crime. And this is happening without claims of harm to the Internet. Recently many opponents of the legislation, especially the Stop Online Piracy Act, have made many claims about the technical aspects of the bills. These claims just do not hold up to the facts.
George Ou, a respected network engineer who has written extensively on information system security and related topics, addresses these very issues in a recent blog post. He writes:
“Members of the House recently addressed the claims that their bill would allegedly threaten Internet Cybersecurity by offering some amendments. They made explicit assurances that their proposed bill should not be construed in any way to compromise or impose onerous obstacles to the security of the Internet. Neither the House nor Senate bills in their original forms made any threatening moves to DNSSEC but this new amendment makes it explicit that there is no intent to impair security operations of DNS.”
Ou also points out Stop Online Piracy Act opponent have offered no evidence of DNS fracturing on the Internet:
“The engineers opposed to DNS Filtering claim is that if courts are allowed to block infringing websites, alternative DNS systems will pop up and replace the Internet’s official DNS service controlled by the Internet Assigned Numbers Authority (IANA) and fracture the Internet. But this speculation of DNS fracturing has been proven wrong by real-world examples.
The Internet’s official IANA controlled DNS already coexists with hundreds of thousands of private DNS services operated by organizations, businesses, governments, and militaries. Those private DNS services have to coexist because wholesale replacement of the Internet’s DNS service is impractical and there is no reason for infringing website operators to do any different. When the US courts began seizing rogue websites a few years ago, a web browser plug-in called MAFIAAFire was created to bypass those court blocks by patching in the blocked domain names. The plugin used the practical and easy method of listing addresses for the blocked domain names but did not attempt to replace the entire IANA DNS service which would have been horrifically challenging.”
12/20/2011 08:01 (UTC-08:00) Pacific Time (US & Canada)
Yesterday, Senators Herb Kohl and Mike Lee wrote a letter to the Federal Trade Commission (FTC) about concerns arising from a Judiciary Committee hearing in September on the antitrust practices of Google. The letter urges a thorough FTC investigation to determine if Google is using the overwhelming market power of its search engine to steer Internet users to its own products while discriminating against other companies. It also asks the commission to determine if Google has violated antitrust law, harmed consumers or impeded access to open competition.
In a post on the conservative blog Red State, Saul Anuzis defended Senator Lee for taking “justified and principled action” in examining if Google undermines the property rights and privacy of Americans. While not everyone at Red State has agreed on supporting the Stop Online Piracy Act (H.R.3261), perhaps a look at the abuse of property rights and privacy on the Internet will serve as evidence of the need for action now on this important legislation to target those who profit from stolen American property.
“For conservatives, the regulatory direction of antitrust enforcement strikes right at the heart of what defines a company: its property. Google has seemingly built and branded the most highly prized real estate on the Internet through innovation, investment and competitiveness. At first glance, Google could be a poster child for free enterprise. Is Sen. Lee simply encouraging big government to intervene once again in the marketplace and essentially seize and redistribute property?
“But digital property ownership—of content, intellectual property and personal data—is exactly the issue that Google wants to sweep under the rug. To evaluate the need for antitrust enforcement against Google, we need to understand the extent to which Google has built its business through the abuse of the property rights of others.”
“In the September’s [Senate] hearing, Senator John Cornyn (R-TX) drew attention to Google’s embarrassing non-prosecution agreement with the U.S. Department of Justice and forfeiture of $500 million in ill-gotten gains from the promotion of illegal and counterfeit pharmaceutical ads. In this instance, Google aided other property thieves—thieves of drug patents and trademarks—in a way that put the health of consumers at risk.”
12/15/2011 09:36 (UTC-08:00) Pacific Time (US & Canada)
Last night, the Huffington Post used its front page to highlight an article of over 7,000 words that repeated many charges against the Stop Online Piracy Act and the PROTECT IP Act. The facts speak for themselves. The legislation is pro-Internet. It has broad bipartisan support and the rare backing of the AFL-CIO and Chamber of Commerce. It targets criminal activity, which helps legal commerce. It goes after foreign criminal websites that are violating current copyright law and preserves American jobs. It promotes free speech and innovation. Targeting criminal activity makes the Internet more open and free.
The MPAA’s Michael O’Leary compared criticism of the Stop Online Piracy Act to the facts on the Huffington Post here:
“Piracy puts Americans' jobs at risk; the Stop Online Piracy Act encourages innovation and investment. Protecting intellectual property encourages economic growth.”
And Sandra Aistars of the Copyright Alliance posted about why the OPEN Act falls short for artists and creators.
“While the creative community appreciates the recognition by bill sponsors including Rep. Issa and others that there is a pressing need to address the massive online infringement being carried on by rogue sites, the proposal unfortunately does not provide an effective enforcement tool to artists and creators for a variety of reasons.”
Separately, Senator Chris Dodd wrote about free speech and copyright protections:
“Just as the First Amendment defends Americans' right to create, Article I, Section 8, Clause 8 -- the Copyright Clause -- guarantees Americans the ability to protect their creations from those who would steal them. That is why a nation that prides itself on the free exchange of ideas must also have strong copyright protections for those ideas. Today, such protections make it possible for more than 2.2 million Americans to hold good jobs supported by the content industry.”