House bill proposes credit card blockade to fight media piracy

By , CardRatings contributor
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Critics of a new intellectual property proposal circulating on Capitol Hill worry that it could inadvertently wreak havoc on legitimate e-commerce websites by suspending their ability to accept credit cards. Sponsors of HR 3261, the Stop Online Privacy Act, proposed new rules that would exempt credit card processors, ISPs, and other third-party technology vendors from copyright infringement lawsuits. In return, the bill states, merchant account services would have to suspend all payments to companies targeted by infringement complaints.

In some ways, the bill's proposal resembles the actions taken by Visa and MasterCard against WikiLeaks. The online "leak" repository solicited credit card donations from readers until the payment processors suspended the organization's merchant activity. The website's founder, Julian Assange, told reporters at a streamed press conference that his organization would soon run out of money unless donors found alternate ways around the so-called "blockade."

Credit card processing shutdown requests ripe for abuse, say critics

SOPA would work in much the same way, offering copyright holders a formal mechanism to "choke off" funds from websites selling pirated versions of popular television shows, feature films, books, and music recordings. The bill's intended targets include torrent sites that catalog peer-to-peer libraries of media files, as well as e-commerce websites that sell pirated DVDs and CDs.

Sherwin Sly, Deputy Legal Director for online advocacy group Public Knowledge, noted on his blog that the SOPA bill's vague language opens the door for just about anyone to shut down a website by disconnecting its credit card processing and web hosting accounts, at least temporarily. Existing copyright rules permit rightsholders to suspend potentially infringing content on sites like YouTube, pending full investigations. However, according to attorney Mike Young, a Google study found that about a third of DCMA suspension requests had no merit.

Consumer Electronics Association President and CEO Gary Shapiro wrote an opinion column for Forbes Magazine, warning that major websites like Amazon, Best Buy, or eBay could face numerous shutdown notices and investigation requests from competitors or from individuals with grievances against the companies. According to The Hill's Gautham Nagesh, the bill has already aligned an unusual coalition of opponents: Silicon Valley lobbyists and Tea Party free speech advocates. The House and Senate will debate the bill's provisions later this winter.

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