eCommerce in The Crosshairs of SOPA

Editor’s note: The following is a guest post by Michael Essany.

If you aren’t yet familiar with SOPA, there’s an excellent possibility that you will be before the end of today.

Fueled by the growing concern that online content piracy continues to negatively impact the American economy, the United States Congress is presently considering dramatic steps to curb the illegal distribution of American-made entertainment and a wide variety of counterfeit digital products.

But the efforts in Washington, some say, have gone too far. And on Wednesday, many of the biggest Internet entities in existence – Wikipedia being chief among them – are publicly dissenting against controversial pending legislation by taking their websites down for the day in a so-called “protest blackout.”

“I hope Wikipedia will melt phone systems in Washington on Wednesday,” Wikipedia founder Jimmy Wales said on Twitter this week in regard to the looming Wikipedia blackout. “Tell everyone you know!“

The SOPA Opera Begins

Last October, the Stop Online Piracy Act (SOPA) was introduced in the U.S. House of Representatives. Shortly thereafter, a similar but lesser known bill called the Protect Intellectual Property Act (PIPA) appeared in the U.S. Senate.

Both SOPA and PIPA aim to eliminate the illegal copying and dissemination of movies, music, and other digital content. In theory, say anti-piracy advocates, the efforts by lawmakers to address the contemporary piracy plague are laudable. But the proposed legislation is believed by many to overstep appropriate boundaries.

As a result, a firestorm of controversy has engulfed the SOPA debate, with critics arguing that the bill would require online companies to almost impossibly police their own users while simultaneously taking responsibility for their potentially offensive actions.

Google, Facebook, Wikipedia, Twitter, and other giants of the Web have voiced powerful opposition to SOPA. According to free speech and open Internet advocates, if websites are shut down for distributing content, the U.S. will effectively destroy the openness of the last pure, unadulterated frontier of public discourse – the Internet.

“While I support their goal of reducing copyright infringement (which I don’t believe these acts would accomplish),” says Google co-founder Sergey Brin, “I am shocked that our lawmakers would contemplate such measures that would put us on a par with the most oppressive nations in the world.”

SOPA’s Impact on eCommerce

“A foreign Web site accused of breaking United States law would have 48 hours to request an appeal of the court’s decision,” explains Becca Aaronson of The New York Times. “If it does not appeal, American companies would have five days to obey the court order or face liability for enabling illegal activity. Google and Yahoo would be required to remove hyperlinks to the accused Web site in search results, PayPal and Visa would have to stop payment transactions on the site, and Google AdWords would have to discontinue advertisements.”

In the big picture, critics allege, SOPA stands to hurt small businesses and eCommerce providers substantially more than it would help the entertainment industry and other creators of frequently-pirated digital content.

Per the established provisions of the proposed legislation, a business that merely stands accused of an intellectual property or copyright infringement could easily have its website pulled. Left in the dark, the business and its customers could be indefinitely stranded on a digital island of sorts. And should the site eventually be allowed to resume operation, there’s no telling how lasting the damage would prove to be.

SOPA Stalls… But For How Long?

As it stands, the House bill is on hold and the Senate version of the same bill is “awaiting further research.”

But perhaps most importantly to the objectors of the proposed legislation, the White House seems far more resolute about opposing SOPA than many on-the-fence legislators in both political parties.

“While we believe that online piracy by foreign websites is a serious problem that requires a serious legislative response, we will not support legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet,” reads a White House blog post partially authored by Aneesh Chopra, the U.S. Chief Technology Officer. “Any effort to combat online piracy must guard against the risk of online censorship of lawful activity and must not inhibit innovation by our dynamic businesses large and small.”

 Sources: New York Times, ABC News