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SOPA: Washington Vs. The Web

Sopa Piracy Censorship

First Posted: 12/14/11 06:01 PM ET Updated: 12/16/11 08:52 AM ET


Just how many of these "downstream" positions are really dependent on Hollywood is the subject of dispute among economists, and how many are hurt by kids downloading movies for free is even less clear. But the vast majority of the jobs Dodd & Co. claim are threatened by online piracy are only peripherally related to the entertainment business. MPAA takes credit for nearly 1.6 million jobs at florists, catering companies, hardware stores and other industries that work with major movie studios, assuming that these jobs could not ultimately be out of a job without Hollywood help.

"This is a joke," says economist Dean Baker, co-Director of the progressive-leaning Center for Economic and Policy Research. "This bill will have very little impact on jobs directly. And of course the money that people don't pay to the MPAA, they spend somewhere else. So this is about the distribution of jobs, not the number."

In July, the MPAA studios and a few entertainment unions launched Creative America, a site that purports to demonstrate the ravages of piracy on ordinary folks in the entertainment industry. The group is now engaged in an aggressive and expensive advertising campaign to promote Protect IP and SOPA as job-protecting legislation, claiming that pirates are "stealing ... hundreds of thousands of American jobs."

WATCH the Creative America ad:

Dozens of other industries have lined up to support the bill, chanting the less-piracy-equals-more-jobs mantra. But like many talking points circulating around Capitol Hill, the sound bite hinges on a link between higher corporate profits and more jobs. For many of the firms in favor of the bill, that link is tenuous at best.

"If you're Nike, and you make tennis shoes and there's a company in some other country that can manufacture those for 10 cents on the dollar and sell them as if they were real Nikes, you have a big problem," says Christine Jones, General Counsel for Go Daddy, one of just two major tech companies to support the bill. Jones was a bundler for the 2008 presidential bid by Sen. John McCain (R-Ariz.), raising as much as $100,000 for him. McCain, a Protect IP co-sponsor, denies any contact between himself and either Go Daddy or Jones.

But a large portion of Nike's labor force works overseas (often working in abusive labor conditions that the company has long vowed to end). Most of the firms lobbying on the legislation will not even publicly disclose the number of employees who actually work in the United States (Tiffany & Co., a supporter of the bill that does disclose, has 44 percent of their employees overseas).

But supporters of anti-piracy legislation continue to tout the jobs line. In a statement provided to HuffPost, Franken says the bill "an important jobs issue," insisting that, "The online sale of copyrighted content and counterfeit goods hurts American workers and businesses, and it ultimately means lost jobs."

Protect IP's support from liberals like Franken and traditional Democratic donors has not been lost among the conservative base. As the Tea Party Patriots proclaimed in an early autumn Facebook post:

"Have your own website? Maybe the government will shut it down tomorrow...without any notice to you. Republicans are going to introduce this in the House, Democrats in the Senate. WHAT??? Big Labor, Hollywood, U.S. Chamber of Commerce all in this together...against you."

During the years-long debate over net neutrality, Republicans repeatedly claimed that net neutrality rules amount to a "government takeover" of the Internet, insisting that the government doesn't need to and shouldn't "regulate the Internet."

"Here's what they wanna do: take the private Internet and put it all under government control," Tea Party favorite Rep. Marsha Blackburn (R-Tenn.) said in a web video uploaded to her own YouTube account in April. "Think about it. What's going to happen to the next Facebook innovator if they have to go apply with the government to get approval to develop a new application?"

And yet elected Republicans of all stripes, including Blackburn, whose district includes Nashville, are lining up to hail Protect IP and SOPA -- accounting for 17 of 39 Senate co-sponsors and seven of nine House co-sponsors. Tea Party favorite Sen. Marco Rubio (R-Fla.), whose state houses Universal Studios and Disney World, is a co-sponsor on the Senate side, while Reps. Mary Bono Mack (R-Calif.), Elton Gallegy (R-Calif.) and Dennis Ross (R-Fla.), who have heavy Hollywood presence in their districts, have signed on as co-sponsors in the House.

"This ... is a huge giveaway to the trial lawyers, but the Republicans are all over this," says a frustrated Pedro Ribeiro, spokesman for Rep. Zoe Lofgren (D-Calif.), a lawmaker whose district is home to several Silicon Valley stalwarts and was one of the first members of Congress to speak out against the piracy bill.

* * * * *

With major corporate constituencies organizing on behalf of the bill, Silicon Valley stalwarts couldn't count on the U.S. Chamber of Commerce to air their complaints. In addition to Hollywood and Nike, pharmaceutical giants were making a big push.

Americans pay higher prescription drug prices than the citizens of any other nation, a product of strict intellectual property rules for prescription drugs. So many among the elderly and the uninsured import the same drugs at lower prices from Canada to avoid the sticker shock, a strategy advocated by both Consumer Reports
and AARP.

Though buying prescription drugs from Canada is technically illegal, the Food and Drug Administration has informally tolerated the purchases for years, provided the medicine is approved by prescription and is only for personal use. Several states have even adopted official Canadian drug importation regimes over the last decade, including Kansas under then-Gov. Kathleen Sebelieus, who now heads Obama's Department of Health and Human Services chief. Over one million Americans order drugs from pharmacies certified by the Canadian International Pharmacy Association,, a credentialing organization recommended by AARP for seniors to help ensure that a pharmacy in Canada is safe.

But major pharmaceutical companies hate this practice, which drains on their revenues, and the companies have deployed an aggressive campaign to associate legitimate Canadian drugs with the very real problem of Internet-purchased counterfeit medicines. (There are websites peddling bogus drugs who do their best to masquerade as legitimate Canadian pharmacies.)

"The major threat to patients in the U.S., however, is the Internet and the many professional-looking websites that promise safe, FDA-approved, branded medicines from countries such as Canada or the U.K.," Pfizer Chief Security Officer John Clark said at the Nov. 16 House hearing.

SOPA includes a host of provisions designed to crack down on counterfeit medicine that are written broadly enough to encumber the importation of safe medicine from legitimate Canadian pharmacies. Provisions that bar the importation of "mislabeled" drugs would block a great deal of unsafe pills from making their way to the U.S., but they would also block all Canadian prescription drugs, because Canada's drug warnings don't exactly match FDA warnings.

So while SOPA cosponsor Rep. Steve Chabot (R-Ohio) has few ties to unions or Hollywood, his second-biggest career campaign donor is Proctor & Gamble, a major drug company. The number two donor for Rep. Lee Terry (R-Neb.), another co-sponsor, is USA Drug, a southern drug store chain. Pharmaceutical giant Abbott Laboratories is the top 2012 donor for Protect IP co-sponsor Sen. Mike Enzi (R-Wy.), and 3 of the top 10 career donors for fellow co-sponsor Sen. Lindsay Graham (R-S.C.) are pharmaceutical companies.

With both Hollywood and the pharmaceutical industry backing the bill, the U.S. Chamber of Commerce threw it's full support behind the legislation, lobbying Congress directly. It also peddled its case to the public, starting up cuddly shell organizations to mask its own involvement. The Chamber set up The Coalition Against Counterfeiting and Piracy, which in turn established FightOnlineTheft.com. And FightOnlineTheft.com produced tear-jerker videos about the horrors of counterfeit medicine.

WATCH FightOnlineTheft.com's ad:

"Somebody could end up sick," reads a narrator, whose friend died after taking medicine purchased from Canada online. "Somebody could end up dead. It could be a child next time. It could be your friend, it could be anybody. And they just don't care. They are just after the money. And it has to be stopped."

* * * * *

By October, Smith, the House Judiciary Committee Chairman, who declined to comment for this article, stripped tech-friendly Rep. Goodlatte of responsibility for the House version of Protect IP, sparking panic among tech firms. Smith delivered for Hollywood, expanding Leahy's bill to give governments and corporations the power to bring down foreign and domestic websites alike, and broadening the definition of a condemnable site to anything that "infringes or facilitates infringement."

Courts will ultimately decide the meaning of that term, but if you believe SOPA-supporter Monster Cable, which keeps an extensive list of "blacklisted dealers" that sell "fake" Monster products, some of the biggest names in both the Internet and American retail could be targeted: eBay, Craigslist, Costco, Facebook, Sears and Twitpic. If SOPA passed, Monster, which makes high-priced versions of guitar cables and home electronic connectors, could demand that web hosting services take down not merely individual web pages selling allegedly bogus Monster cables at Sears.com, they could demand that the entire Sears website be taken down.

"The new law is touted as providing additional remedies for foreign sites, but it really strongly targets domestic players as well," says Bridges, the attorney for dajaz1.com, the site raided by ICE in 2010.

And the prospect of the government sacking entire websites because some user-generated content allegedly violates copyright laws creates tremendous free speech problems, civil liberties advocates say.

"Our primary concerns are with the fact that non-infringing content is going to be taken down in the process of taking down infringing content," says Michael MacLeod-Ball, First Amendment counsel for the American Civil Liberties Union. "The way the bill is set up, if a site has infringing content on it ... their default reaction is going to be to take down the whole site."


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