01/31/2012 05:09 pm ET Updated Apr 01, 2012

The Debate Over Anti-Piracy Laws

Congress has postponed floor votes for the Stop Online Privacy Act (SOPA) and the Protect IP Act (PIPA), bills intended to increase protections for copyrighted digital content. This marked a victory for opponents who mounted landmark digital protests to call attention to what they believe was a move to give the government sweeping powers to shut down sites accused of copyright infringement. Since the future of the bills is largely in doubt, industry and lawmakers are left looking for a path forward. But the debate is not confined to the United States; digital piracy is increasingly being touted as an international trade concern by music and movie industries globally.

What's at Stake

Content producers, such as the motion picture and recording industries, say digital piracy hurts their bottom line. On January 25, the international music industry posted a report showing digital sales of more than $5 billion in 2011. While acknowledging positive growth, the report said that digital piracy was "rigging the market for legitimate services, stunting growth and jeopardizing investment in music." But the amount of actual economic harm has been hard to quantify, according to a U.S. Government Accountability Office 2010 report. It is unclear, for example, how many people currently consuming content illegally would be customers if they did not have other access.

Opponents of SOPA and PIPA argue that what is really at stake is the future of Internet companies" ability to innovate, freedom of speech, and the unfettered capability of users to share content. The takedown of file-sharing site, which some analysts say could have "a chilling effect" on the online storage industry, seems emblematic of these concerns. As Investor Place notes, the incident has already "taken the shine off of cloud computing just as IT departments have begun to embrace the concept."

The Debate

Central to the debate is the question of to what degree online protection for digital content needs to be beefed up. Media executive Danny Goldberg says that without new legal reforms, "we will be complicit in accelerating the trend of the last decade" and harming the ability of artists to get paid.

But digital rights advocate Art Brodsky says that SOPA and PIPA are part of a long chain of anti-piracy laws, and that Congress should figure out the magnitude of illegal access and its relationship to economic harm before discussing new remedies. Some analysts argue that the U.S. government's shutdown of and arrest of its founder, Kim Dotcom, in New Zealand show that current laws already have teeth.

Policy Options

Some advocates are looking to the Online Protection & Enforcement of Digital Trade Act, a crowd-sourced bill in which the International Trade Commission would enforce copyrights of digital content the way it does physical goods. Meanwhile, SOPA-like measures are being considered in countries from Brazil to Canada. Activists are particularly worried about a new Anti-Counterfeiting Trade Agreement signed by the United States last year and by EU nations on January 26. The treaty would create an international enforcement regime for piracy that might put Internet providers in the position of being criminally liable.

Tech blogger Stephen Chapman writes that "an Internet without at least some amount of piracy is an Internet that lacks some portion of the freedom it currently enjoys: the more piracy is obliterated, the more locked-down the Internet will become." Film executive John Tarnoff says that "the only way to stem piracy is to make more content more widely available at a competitive price point, and include added-value that pirates can't match."

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