There's a battle brewing over old business models and new business models based on the Internet economy. A House Judiciary Committee hearing over the controversial Hollywood copyright bill called Stop Online Piracy Act (SOPA) was held today. If the bill passes, it would make it harder for Internet entrepreneurs to grow into the next Google, Facebook, and Twitter.
Internet entrepreneurs have expressed that the bill will cripple innovation. Companies such as Google, Yahoo!, AOL, and organizations such as the Electronic Frontier Foundation, Human Rights Watch, and Reporters Without Boarders oppose the legislation.
The bill was introduced on October 26 to the US House of Representatives by Lamar Smith (R-TX) to help the government and copyright holders control online piracy of intellectual property, focusing on foreign rogue sites that sell pirated movies or counterfeit goods - and to increase penalties for engaging in IP theft. (The Senate's counter bill is called the Protect IP Act).
The Wall Street Journal reports that the "Justice Department could ask for a court order to compel U.S. search engines and other sites to block domain names or search results." That would mean immediate death for some companies that don't have the resources to fight a possible legal case.
The bill could weaken protection from the Digital Millennium Copyright Act, which helped companies like YouTube and Twitter grow into major tech companies. According to The New York Times the "House bill would destroy that immunity, putting the onus on YouTube to vet videos in advance or risk legal action." For example, a Chinese-version of Twitter called Weibo, hires about a thousand people to censor user content. If the bill goes through, then companies like Twitter would need to make sure user generated content is not infringing on any copyright.
It's hard to regulate the Internet. It's complicated.
While businesses do lose money to pirated and counterfeit goods, making the case for the bill isn't as clear cut.
Eran Weinberg is a victim of what this bill is trying to protect. Weinberg is an entrepreneur who designed a product called headphonies, a portable designer for micro speakers.
The product he made became a popular product for copies in China. Weinberg received an email from one of the counterfeit suppliers, showing that a Chinese company copied his product and his company's name.
"It's hard to make a complete argument for or against it since its hard to predict the consequences. I don’t really think they need to pass a bill for it though," Weinberg told me.
"Most of the countries that do pirate will probably still not care about our law and I am sure pirators will still figure out a way to close and open another business in minutes. So most likely more tax dollars will be spent trying to fight the unfightable. Personally, I don’t think the bill will help but cost more money and issues for the US in the end," he added.
While tech entrepreneurs feel the bill won't do much good - they worry that it has the potential to do harm. If the bill passes, this could be the beginning of censorship of the Internet in America.