E-PARASITE's Sponsor, Lamar Smith, Was Against Massive Regulatory Compliance The Day Before He's For It

from the do-they-even-know-what-they're-doing? dept

Sometimes you just shake your head and wonder. As you now know, Rep. Lamar Smith just introduced the E-PARASITE Act, which puts incredibly massive regulatory compliance costs on large portions of the internet. Perhaps you think that Congress burdening companies -- especially tech companies, which, recent studies have shown, are responsible for much of the job growth in this country -- is par for the course. But, isn't it interesting to see that just the day before E-PARASITE came out, the House Judiciary Committee cleared a bill to try to limit the costs of regulatory compliance. The main supporter of the bill? You guessed it -- none other than the head of the House Judiciary Committee... Rep. Lamar Smith:

The bill “is an urgently needed antidote to this anti-democratic sentiment,” Smith said in prepared remarks. “It gives the people’s representatives in Congress the final say on whether Washington will impose major new regulations on the American economy, not unaccountable agency officials.”

Republicans point to a Small Business Administration analysis showing U.S. regulations cost $1.75 trillion to comply with in 2008 (that research doesn’t attempt to calculate societal benefits). House Republicans have focused much of their energy this Congress on regulations, voting to delay and weaken several Environmental Protection Agency rules reducing pollution from sources such as power plants, cement plants and industrial boilers.

So, basically, on Tuesday, Rep. Lamar Smith is against damaging regulations that increase compliance costs on the American economy and small businesses. Then, on Wednesday, he introduces a bill that will establish massive regulatory compliance costs on tons of American small businesses. Kinda makes you wonder if he even understands the legislation he's introducing.

Filed Under: compliance, e-parasites, lamar smith, regulations, rein

E-PARASITE Bill: 'The End Of The Internet As We Know It'

from the this-gets-worse-and-worse dept

We already wrote about the ridiculously bad E-PARASITE bill (the Enforcing and Protecting American Rights Against Sites Intent on Theft and Exploitation Act), but having now had a chance go to through the full bill a few more times, there are even more bad things in there that I missed on the first read-through. Now I understand why Rep. Zoe Lofgren's first reaction to this bill was to say that "this would mean the end of the Internet as we know it."

She's right. The more you look at the details, the more you realize how this bill is an astounding wishlist of everything that the legacy entertainment gatekeepers have wanted in the law for decades and were unable to get. It effectively dismantles the DMCA's safe harbors, what's left of the Sony Betamax decision, puts massive liability on tons of US-based websites, and will lead to widespread blocking of websites and services based solely on accusations of some infringement. It's hard to overstate just how bad this bill is.

And, while its mechanisms are similar to the way China's Great Firewall works (by putting liability on service providers if they fail to block sites), it's even worse than that. At least the Chinese Great Firewall is determined by government talking points. The E-PARASITE bill allows for a massive private right of action that effectively lets any copyright holder take action against sites they don't like. (Oh, and the bill is being called both the Stop Online Piracy Act (SOPA) and E-PARASITE (which covers the PROTECT IP-like parts of the bill, SOPA refers to the larger bill that also includes the felony streaming part).

Some of the key problems with the bill, beyond what we discussed yesterday:

• While supporters of the bill still continue to insist that this bill is only targeted at foreign infringers, that's false. Part of the bill focuses on foreign infringers -- the part that allows the Attorney General to kill websites. But the private right of action section has no such restriction. Instead, it allows copyright holders to effectively kill any site they'd like. You have to dig down into the details to see this, but let's pull out the key sections to see. The act, in section 104, defines sites that are "dedicated to the theft of US property" as including any "US-directed site" that:

  is taking, or has taken deliberate actions to avoid confirming a high probability of the use of the U.S.-directed site to carry out acts that constitute a violation of section 501 or 1201 of title 17, United States Code;

  If that sounds massively confusing, you're right. But what it's saying, in the most twisted language possible, is that if it's probable that a site used in the US (note no restriction to just foreign sites here) can be used to infringe, and that site fails to take some sort of action against the "high probability" that the site can be used to infringe, then it can be declared dedicated to the theft of US property. This turns both the DMCA safe harbors and the Supreme Court's Sony Betamax ruling completely on their heads. In effect, it appears to be saying that if you choose not to self-police your site for infringement -- i.e., putting up filters, or proactively monitoring content for infringement -- you can be declared in violation of the law... at which point a court can order all ad networks and payment processors to automatically stop doing business with you.
  
  Think of all the sites this could effect. Twitter, Facebook, YouTube, Tumblr, SoundCloud, Ebay, Flickr, Wikipedia, Craigslist, Wordpress -- basically any site that has any user-generated content. If they don't proactively filter or monitor their content, they could be at risk of a claim that they took "deliberate actions to avoid confirming a high probability" that their sites could be used to infringe... and thus they could be subject to an action by a private party that strips them of both ad revenue and the ability to process any payments.
  
  Remember how Monster Cable -- massive supporters of this bill -- declared both Craigslist and eBay as being dedicated to infringement? Under this bill, a company like Monster could take action against those sites, putting a tremendous burden on them.



• The definitional problems don't stop there. Separate from the ridiculous definition above, this act would also declare a site "dedicated to theft of U.S. property," if it is "primarily designed" in a way that "engages in, enables, or facilitates" a violation of copyright law. Those last two points are ridiculously broad. "Enables" infringement? "Facilitates"? That's practically the entire internet. The primary design of YouTube, Twitter, Facebook, etc. all "enable" or "facilitate" infringement.



• While some reporters claimed that the "private right of action" was taken out of this bill, or even "softened," nothing could be further from the truth. The details show that the private right of action is significantly worse in this bill. What changed is that in PROTECT IP, private copyright holders could go to court to force payment processors and ad networks to stop dealing with sites they accuse. Under E-PARASITE, before they go to court, they first have to send a notification, very similar to a DMCA takedown notice. But, of course, as we've seen with the DMCA, while it's "voluntary" to comply, if you don't comply you lose safe harbors -- so nearly everyone complies. That means this private right of action almost certainly will lead to ad networks and payment processors cutting off any site they receive a notification on -- no matter how legitimate. And, while the bill does allow for a counternotification process, unlike the DMCA, there is no requirement that the payment processors and ad networks restore service to anyone who files a counternotice, after a given period of time (absent a lawsuit). In other words: a copyright holder could issue a bogus claim that a site is dedicated to infringement, and the payment processor and ad network could pull the plug on the site... and even if a counternotice is filed, those services have no obligation to bring back service.
  
  Again, using our Monster Cable example, it could force all payment processors to no longer allow payments on Craigslist or eBay, and even if those sites filed counternotices, the service providers would be under no obligation to turn those things back on. And just think of the massive, irreparable harm if legitimate sites lose both the ability to accept payments and to have ads for just a few days? And while there is liability for those who file false notices, as we've seen with the DMCA, such provisions are rarely, if ever, enforced -- and generally are interpreted to only apply in cases of extreme misrepresentation.



• As noted above, the private right of action establishes an astoundingly broad new standard for what's considered infringing. Beyond user-generated content sites, pretty much any cloud computing service can be deemed "dedicated to the theft of US property," if they choose not to filter and monitor the content being sent through the cloud. Any of the online locker services are in serious trouble if this bill becomes law. Amazon's and Google's music services would have to monitor your uploads and try to stop infringement to avoid liability. Box.net and Dropbox would likely have to monitor what files you're storing to avoid liability. It's honestly that insane.



• Supporters of the bill, beyond falsely claiming that it's just focused on foreign sites, are also claiming that this bill does not target such sites. An aide to the House Judiciary Committee, who supports the bill, claimed, "Sites that host user content -- like YouTube, Facebook and Twitter -- have nothing to be concerned about under this bill." But that's demonstrably false. Perhaps this aide is unaware that Viacom is still in the middle of a $1 billion lawsuit claiming that YouTube was dedicated to infringement. Under the definitions in this bill, YouTube would absolutely have been liable, and likely would have been shut down years ago. In fact, Viacom never would have had to sue. It would have just made use of the notification process, and kept any and all advertising and payment processing from the site... and voila, dead YouTube, without the benefit of a judge reviewing the case (and, need we remind the House Judiciary Committee, that so far the judge has sided with YouTube?).



• The bill would be red meat to any foreign government that censors its internet. China, Iran, Saudi Arabia are going to love this. The mechanisms for censorship are quite similar. Under E-PARASITE, service providers have to proactively block to prevent liability. China's Great Firewall works the exact same way: by threatening ISPs with liability if they don't block content harmful to Chinese citizens. Replace harmful to Chinese citizens with "a high probability" of being used for infringement... and you've got E-PARASITE.



• Another change between this bill and the Senate's PROTECT IP is that this bill calls out "search engines" more directly, rather than "information location tools," as in the Senate bill. While that may seem to be narrower, the definition of a search engine is ridiculously broad (of course).

  The term ‘‘Internet search engine’’ means a service made available via the Internet that searches, crawls, categorizes, or indexes information or Web sites available elsewhere on the Internet and on the basis of a user query or selection that consists of terms, concepts, categories, questions, or other data returns to the user a means, such as a hyperlinked list of Uniform Resource Locators, of locating, viewing, or downloading such information or data available on the Internet relating to such query or selection.

  Under this definition, Techdirt could be declared a search engine under this law. After all, we take "questions" and queries from readers, and often return stories that link elsewhere on the internet. Yikes!



• As highlighted above, there are all sorts of definitional problems with the bill. And you can tell how insane things get with definitions when the authors of this bill even go so far as to define the word "including." I'm not joking:

  INCLUDING.--The term "including" means including, but not limited to.

  This is the kind of mess we're dealing with.

About the only good thing is that the insanity and out-and-out censorship and hindering of the internet that this bill provides appears to have scared off co-sponsors of the bill. Despite a massive lobbying effort from the US Chamber of Commerce and the MPAA (among some others), Rep. Lamar Smith was only able to wrangle up eleven co-sponsors. For a bill of this nature, this is woefully low. Even more surprising is that they couldn't even get Rep. Mel Watt to co-sponsor the bill, despite being the ranking Democrat on the IP subcommittee of the House Judiciary Committee. Instead, they had to settle for Howard Berman, the Representative from Disney. In other words, it appears that many Congressional reps have heard the massive concerns of the public, technologists, entrepreneurs, investors, artists, human rights activists, and many others who are quite afraid of how this bill will break the internet. And that means that it can only help to continue to speak out and reach out to your representatives about how awful this bill is, and how much harm it would do.

Filed Under: censorship, copyright, dmca, e-parasites, internet, liability, protect ip, sopa

New Video On How PROTECT IP Act Breaks The Internet

from the everything-is-a-remix... dept

The folks behind Fight For the Future have teamed up with Kirby Ferguson, who created the excellent everything is a remix series, have teamed up to put together a video about the problems with PROTECT IP/E-PARASITES. It's worth a watch... and passing it on to others:

Filed Under: censorship, copyright, e-parasites, internet, protect ip

PROTECT IP Renamed E-PARASITES Act; Would Create The Great Firewall Of America

from the censorship-galore dept

As was unfortunately expected, the House version of PROTECT IP has been released (embedded below) and it's ridiculously bad. Despite promises from Rep. Goodlatte, there has been no serious effort to fix the problems of the Senate bill, and it's clear that absolutely no attention was paid to the significant concerns of the tech industry, legal professionals, investors and entrepreneurs. There are no two ways around this simple fact: this is an attempt to build the Great Firewall of America. The bill would require service providers to block access to certain websites, very much contrary to US official positions on censorship and internet freedom, and almost certainly in violation of the First Amendment.

Oh, and because PROTECT IP wasn't enough of a misleading and idiotic name, the House has upped the ante. The new bill is called: "the Enforcing and Protecting American Rights Against Sites Intent on Theft and Exploitation Act" or the E-PARASITE Act (though, they also say you can call it the "Stopping Online Piracy Act").

The bill is big, and has a bunch of problems. First off, it massively expands the sites that will be covered by the law. The Senate version at least tried to limit the targets of the law (but not the impact of the law) on sites that were "dedicated to infringing activities" with no other significant purposes (already ridiculously broad), the new one just targets "foreign infringing sites" and "has only limited purpose or use other than" infringement. They're also including an "inducement" claim not found elsewhere in US regulations -- and which greatly expands what is meant by inducement. The bill effectively takes what the entertainment industry wanted the Supreme Court to say in Grokster (which it did not say) and puts it into US law. In other words, any foreign site declared by the Attorney General to be "inducing" infringement, with a very broad definition of inducing, can now be censored by the US. With no adversarial hearing. Hello, Great Firewall of America.

And while defenders of this bill will insist it's only designed to target truly infringing sites, let's just recall a small list of sites and technologies the industry has insisted were all about infringement in the past: the player piano, the radio, the television, the photocopier, the phonograph, cable tv, the vcr, the mp3 player, the DVR, online video hosting sites like YouTube and more. All of these things turned out to be huge boons for the industry. And yet, with a law like this in place, the old industry gets to kill off technologies they don't understand. Scary stuff.

And it's not just foreign sites impacted by this law (despite what supporters would have you believe). It appears to expand who would have to take on the entire burdens of enforcing this blacklist -- broadly naming "service providers" as defined in the DMCA. That's significant, because a big part of this bill is to undermine and strip away the safe harbors of the DMCA. The DMCA set up an important balance that gave online service providers freedom from liability if they pulled down content upon notification. This new bill provides a massive and ridiculous burden: allowing the Attorney General to create an internet blacklist that all service providers will need to block access to:

A service provider shall take technically feasible and reasonable measures designed to prevent access by its subscribers located within the United States to the foreign infringing site (or portion thereof) that is subject to the order, including measures designed to prevent the domain name of the foreign infringing site (or portion thereof) from resolving to that domain name’s Internet Protocol address. Such actions shall be taken as expeditiously as possible, but in any case within 5 days after being served with a copy of the order, or within such time as the court may order.

On top of that, the bill says any attempt to get around such blocks can lead to liability. Would this put liability on things like MAFIAAfire? It sure sounds like it:

To ensure compliance with orders issued pursuant to this section, the Attorney General may bring an action for injunctive relief....

against any entity that knowingly and willfully provides or offers to provide a product or service designed or marketed for the circumvention or bypassing of measures described in paragraph (2) and taken in response to a court order issued pursuant to this subsection, to enjoin such entity from interfering with the order by continuing to provide or offer to provide such product or service.

While the text of the bill insists that nothing in it takes away the DMCA's safe harbors, once again this is a claim without the facts to back it up. A large part of the bill is an effective attempt to strip away the DMCA's safe harbors.

The only extraordinarily minor change against the interests of the entertainment industry is that the bill ever so slightly changes the "private right to action," which allows individual copyright holders to take action under this bill. This was a big problem in the old bill, and the only requirement here is that prior to making use of this private right to action, copyright holders have to provide "notice" to payment processors and ad providers. But then those service providers are expected to take action anyway, or face liability. So all this really does is take the court out of the process, and make it even easier for copyright holders to effectively kill off sites they don't like.

Think about this for a second: think how many bogus DMCA takedown notices are sent by copyright holders to take down content they don't like. With this new bill, should it become law, those same copyright holders will be able to cut off advertising and payment processing to such sites. Without court review.

And... because this bill wasn't already ridiculously bad enough, it also lumps in a House version of the felony streaming bill that will make huge swaths of Americans felons for streaming content online.

This bill is an abomination and an insult to the Constitution. It's unfortunate that Rep. Lamar Smith thinks this is worth introducing in its current state, and anyone who signs on to co-sponsor is effectively supporting mass censorship of the internet in the US, as well as the criminalization of huge numbers of Americans -- while putting a huge burden on the one part of the economy that actually is creating jobs. All because a few legacy companies in the entertainment industry refuse to adapt.

Filed Under: bob goodlatte, censorship, copyright, e-parasites, great firewall of america, lamar smith, prior restraint, protect ip