Last month, Yahoo quietly quit the powerful business trade group, which supports the legislation. Google and the Consumer Electronics Association, which represents 2,200 firms, are warning they may do the same.
“Given the fact that their mission is to grow the American economy, sponsoring legislation that would harm one sector that is perhaps the brightest spot of the economy is short-sighted,” said CEA senior vice president Michael Petricone. “It makes one wonder what their membership will be like in the future.”
When asked whether CEA would drop its membership, he replied: “We are comfortably reassessing groups we are members of.”
Spats between the Chamber and its members rarely spill out into public view. And it’s unclear how an exodus of technology firms would impact the lobbying group’s considerable weight in Washington. The group does not disclose the names of its members, many of whom pay substantial amounts for the Chamber’s lobbying prowess.
The legislation could punish Web firms if copyrighted movies, songs or software appear on their sites. But it would address long-standing concerns from Hollywood studios, record labels and publishing houses, which lose $135 billion in revenues each year from piracy and counterfeiting, according to Chamber estimates.
The Chamber would not comment specifically on the decisions of individual members. But it argued that the proposals moving through the House and Senate would improve the quality of media content online and thus benefit Web firms.
“This is a common-sense way forward that is good for the whole industry,” said Steve Tepp, chief counsel on intellectual property for the Chamber’s Global IP Center.
Many Silicon Valley companies agree that piracy is a problem but say the legislation goes too far. Web giants including Facebook, Google, Yahoo, LinkedIn, eBay, and Mozilla on Tuesday co-wrote a letter to Senate and House lawmakers urging Congress to reconsider the measures. They fear the proposals would invite lawsuits and empower law enforcement to shut down their operations if a copyrighted movie or song appeared on their sites without their authorization.
The House Stop Online Piracy Act, which was introduced by Rep. Lamar Smith (R-Tx.), will expand the powers of domestic law enforcement to police even foreign Web sites that violate U.S. copyright and intellectual property law. As Cecilia Kang explained
The “Stop Online Piracy Act (H.R. 3261),” was introduced by a bipartisan group of lawmakers on the Judiciary Committee. It would allow the FBI to seek injunctions against foreign Web sites that steal music, films, software and other intellectual property created by U.S. firms. The bill also includes provision that could hold third parties — payment-processing and other partners — responsible for piracy and counterfeiting on other sites, some critics say.
The main authors of the bill were Reps. Lamar Smith (R-Tex.), John Conyers (D-Mich.), Bob Goodlatte (R-Va.), and Howard Berman (D-Calif.).
The lawmakers said their bill is aimed at protecting industries under siege by piracy and counterfeiting.
“Millions of American jobs hang in the balance, and our efforts to protect America’s intellectual property are critical to our economy’s long-term success,” Conyers said in a statement.
Hollywood, media firms and the U.S. Chamber of Commerce immediately hailed the bill, saying the government needs to take a stronger stance to prevent the rampant illegal use of online content.
“Over 2 million Americans across all 50 states earn a living and support their families in jobs connected to the making of motion pictures and television shows. They deserve better than to see their work stolen out from under them by criminals out to make a profit,” said Michael O’Leary, executive vice president for government affairs at the Motion Picture Association of America. “This legislation hits rogue sites where it hurts: their access to American consumers and to the financial services they use to make money.”
But some public interest groups and Web firms and their investors said the bill is overreaching and could harm businesses that provide services on the Web.
Many analysts have asked whether Internet piracy is a large enough problem to warrant such expansive legislation. As Brad Plumer wrote:
Are online piracy and copyright infringement hurting the economy? It’s always been hard to find solid evidence on this score. The copyright industry — record companies, movie studios, software makers — is always citing reports suggesting that IP infringement is destroying 750,000 jobs per year or costing U.S. companies $200 billion. But as the Government Accountability Office found last year, most of these claims “cannot be substantiated.”
And now, as Nate Anderson reports at Ars Technica, the International Intellectual Property Alliance is taking a brand new tack, arguing in its latest annual report that “piracy inhibits [our] growth in the US and around the world.” But as Anderson observes, the actual numbers in the report don’t seem bear this out. Since 2007, businesses based on copyright have been growing faster than the economy as a whole by a full percentage point. What’s more, the “core” copyright industries (sound recording, movies, TV, software, publishing) are thriving, shedding fewer jobs than the economy as a whole and earning record profits overseas, where piracy is even more rampant.
Now, there are a couple of ways to look at these figures. Maybe these industries would be growing even faster if Congress cracked down on IP infringement and online piracy. Maybe these industries will soon be hurting unless piracy — especially piracy abroad — gets reined in. But it’s hard to find solid evidence that IP infringement is a pressing problem facing the U.S. economy at the moment.
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