Google on the Hot Seat at House SOPA Hearing

House Judiciary Committee Chairman Lamar Smith, R-Texas, introduced the legislation last month as a means to promote American jobs by giving law enforcement and copyright holders more tools to bring action against infringing websites (WID Oct 27 p1). Smith’s bill differs from the Senate PROTECT IP Act, S-968, by modifying a provision that enables a private right of action against copyright infringers. SOPA requires copyright holders to exhaust intermediary support from ISPs, search engines, advertising and financial networks in order to pursue legal action against infringing websites. The bill was co-sponsored by House Judiciary Ranking Member John Conyers, D-Mich., IP Subcommittee Chairman Bob Goodlatte, R-Va., and Rep. Howard Berman, D-Calif., among others.

"We cannot continue a system that allows criminals to disregard our laws,” said Smith, “nor can we fail to take meaningful action against criminals who initiate infringement.” Smith singled out Google for improperly allowing Canadian pharmaceutical companies to advertise with Google, a practice which resulted in a $500 million settlement with the Department of Justice. In August Google acknowledged that the company “improperly assisted” Canadian online pharmacy advertisers that targeted U.S. customers through AdWords in violation of the Controlled Substances Act and the Food, Drug, and Cosmetic Act (WID Aug 25 p1). “Google ignored repeated warnings,” Smith said. “The company also disregarded requests to block advertisers.”

Berman asked Google why it indexes The Pirate Bay P2P site, which by its own acknowledgment is dedicated to the dissemination of stolen intellectual property. “Google continues to send U.S. customers to the site by linking to the site in search results. Why do you do this?” Oyama said Google adheres to Digital Millennium Copyright Act (DMCA) takedown requests and has dedicated millions of dollars to address the problem of IP theft. “We will immediately remove the link once notified by a rights holder,” she said, saying the average takedown can take as little as six hours to process. Berman said the protections offered by the DMCA are insufficient to address the problem of online piracy. “You cannot look at what has gone on since the passage of the DMCA and say Congress got it right.”

Google objected to provisions in the bill which Oyama said would threaten more investment and innovation in the Internet and “turns Web providers into de facto Web censors.” “We cannot support the bill as written as it would expose law-abiding U.S. Internet and technology companies to new uncertain liabilities, private rights of action, and technological mandates that could require monitoring of websites and social media,” Oyama said in her testimony. Google specifically said its biggest concerns stem from Section 103 of the bill, which offers an “overly broad” definition of a site dedicated to the theft of U.S. property. Google would prefer a more narrowly drawn definition to ensure that it is really dedicated to infringement, she said. Oyama also said Google was concerned with some of the remedies that the attorney general can seek in Section 102 of the bill, including in rem actions against website operators alleged to commit criminal violations.

Google said it prefers an approach that follows the money and cuts off funding to a website dedicated to theft. Oyama gave the example of WikiLeaks and how the U.S. government marshaled international financial systems providers to prevent the site from attaining funding. “That is the most effective thing you can do,” Oyama said. “You can knock them off at the knees and cut off their financial ties.”

The leading Republican opposition to the bill came from Rep. Darrell Issa of California, who said he objected to the bill because “it fails to use tools that are generally better than the tools we have at our disposal in this bill.” Issa said existing judiciary bodies like the International Trade Commission (ITC) have better jurisdiction over international intellectual property cases and can “reach a quick solution to the question of whether there is wrongdoing, and then follow the money through injunction, not through fines.” After the hearing, Issa told us that SOPA “cannot be fixed.” The bill is “not the right hammer” to fix the problem of online theft, he said. Issa told us he will soon introduce a bill to expand the responsibilities of the ITC, a commission “that was put up specifically to work against wrongful infringement coming overseas. We want to make sure the ITC becomes modern and … in the tangible and intangible world it can play an appropriate role.”

Rep. Zoe Lofgren, D-Calif., engaged Michael O'Leary, the MPAA’s senior vice president of global policy, in a heated debate over what goals the content industry is really seeking to achieve from the legislation. “How many sites need to be shut down before you say you've succeeded?” Lofgren asked. O'Leary said he could not identify a specific number but there were “hundreds” of sites dedicated to infringing intellectual property. After the hearing Lofgren told reporters that SOPA “can’t be salvaged. This is a mess.” Lofgren also confirmed that she and Issa were discussing his proposed legislation.

The panel did not fairly represent members of the technology and Internet community who would assume new duties and responsibilities if the bill is passed, said Lofgren. “You have six witnesses here, five are in favor and one is against and that troubles me,” Lofgren said. “We don’t have any technical expertise on the panel.” Google was the only technology company on the panel composed of executives from Pfizer, MPAA, MasterCard and the AFL-CIO. “This was a very unbalanced panel,” said Ed Black, president of the Computer and Communications Industry Association. “There are areas of expertise that were denied their ability to present their views to the committee,” he said after the hearing.

Rep. Dan Lungren, R-Calif., said he was concerned that the bill’s provision to shut down DNS servers would “undo what we have been working for with cybersecurity.” Some provisions in the bill “would have the unintended consequence of upsetting and undercutting a real effort that would practically secure the Internet,” he said. Lungren suggested that the bill should be referred and evaluated by the House Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies, of which he is the chairman.

Rep. Mel Watt, D-N.C., said he didn’t “like or love everything about this bill … but it is a strong beginning to the process.” Watt said there are things lawmakers can do to improve the bill and address the concerns of the technology and computing industries. But he reiterated that inaction “is not an option” and “Internet freedom does not and cannot mean Internet lawlessness."

A SOPA provision that punishes sites with “constructive knowledge” of infringement raised concerns at the Digital Media Association (DiMA), which told Smith and Conyers in a letter Wednesday that the provision would undermine the Supreme Court’s Sony precedent. “This proposed change … will likely harm consumers, unduly burden website operators and lead to an actual increase” in infringement online, said Greg Barnes, director of government affairs for DiMA, which represents Amazon, Apple, Rhapsody, Slacker and YouTube, among others. Under Sony, the maker of the Betamax recorder wasn’t held liable for the probability that some users would commit a “minor amount of infringing activity” through the machine, he said.

Requiring website operators to police the Internet for infringement, or face secondary liability, means works will be less protected, because site operators can’t determine as fast as copyright owners whether use of a work is a fair use, what licensing arrangements govern the work and whether it’s been made available promotionally, Barnes said: “It seems particularly inefficient” to ask site operators to determine whether a leaked music release was in fact “unauthorized” or simply done to create “buzz,” an occasional marketing tactic. Adding new monitoring and filtering requirements to DiMA members will “lead to a likely decrease” in the services they offer, “which have been shown to reduce online infringement,” he said.

TechFreedom made a novel argument against SOPA intended to appeal to Republicans. “Just as many congressmen were rightly skeptical of the FCC’s ‘net neutrality’ regulations, members should be equally cautious with their own efforts to micromanage the Internet ecosystem, one of the economy’s few bright spots,” said Larry Downes, TechFreedom senior adjunct fellow. The bill’s remedies are too broad and its cost-benefit analysis is “too late” -- only to be commissioned once the bill becomes law, he said.

The hearing was a “great disappointment” to Public Knowledge, President Gigi Sohn said in a written statement. Most Judiciary members “clearly reflected the views of … big media companies” and ignored “real and substantive objections” from human-rights groups, entrepreneurs, engineers and civil libertarians, none of whom were invited to testify, she said. Sohn cited Pallante’s testimony, saying she “reversed many of the positions” Pallante took at a March hearing of the House IP Subcommittee, where she endorsed the “follow the money” approach favored by SOPA critics (WID March 15 p2).

Free Press said it “blacked out” its own website Wednesday to protest SOPA, part of American Censorship Day. Participating groups replace their home pages with a pop-up resembling the government seizure notices that take over websites seized by U.S. Immigration and Customs Enforcement (WID Sept 27 p5), claiming that SOPA will give the government broad leeway to seize domains linked, however tenuously, to infringement. “We can’t allow any corporation to become the Internet’s judge, jury and executioner,” copying the “heavy-handed blocking you see in countries like China,” said Free Press Campaign Director Tim Karr.

The hearing “can’t and won’t even scratch the surface of the far-reaching problems posed” by SOPA, said David Sohn, Center for Democracy and Technology senior policy counsel. “It would lay the groundwork for an increasingly balkanized Internet, directly undercutting U.S. foreign policy advocacy in support of a single, global, open network.” Congress should engage “the full range of stakeholders” to consider ways to address infringement, he said.