(Adds Google comment in 14th paragraph.)
Dec. 14 (Bloomberg) -- The founders of Google Inc. and EBay Inc. attacked Hollywood-backed anti-piracy legislation in the U.S. House and Senate that they said would threaten the technology industry and lead to Web censorship.
The Internet executives said the bills would have a “chilling effect on innovation” and give the U.S. government the “power to censor the Web using techniques similar to those used by China, Malaysia and Iran,” according to a letter sent to U.S. lawmakers and published today in newspapers including the New York Times, Wall Street Journal and Washington Post.
Lobbying in Washington by Internet companies and motion- picture studios has intensified as a House committee prepares to vote tomorrow on the Hollywood-supported bill, which has become a flash point in the debate over how to curb online trafficking of illegally copied movies, television shows and music.
The controversy has drawn in Google co-founder Sergey Brin, PayPal Inc. co-founder Elon Musk, EBay founder Pierre Omidyar, and Yahoo! Inc. co-founder Jerry Yang, who were among 16 Internet executives signing today’s letter.
The House bill, and similar legislation in the Senate, would let the Justice Department seek court orders requiring U.S. Internet-service providers, search engines, payment processors and ad networks to block or cease business with non- U.S. websites linked to online piracy.
Google, owner of the world’s biggest Web search engine, and Facebook Inc. endorsed draft anti-piracy legislation emerging as an alternative to the bills supported by Hollywood. The draft, released last week by Senator Ron Wyden and Representative Darrell Issa, would give the U.S. International Trade Commission, rather than the Justice Department, the lead role in fighting non-U.S. websites linked to online piracy.
“This approach targets foreign rogue sites without inflicting collateral damage on legitimate, law-abiding U.S. Internet companies by bringing well-established international trade remedies to bear on this problem,” Google and Facebook, joined by seven other companies including EBay and Yahoo, wrote in a separate letter yesterday to Wyden and Issa.
The proposal from Wyden, an Oregon Democrat, and Issa, a California Republican, “fails to provide an effective way to target foreign rogue websites and goes easy on online piracy and counterfeiting,” Michael O’Leary, senior executive vice president for global policy and external affairs at the Motion Picture Association of America, said in a statement last week.
The House Judiciary Committee is scheduled to vote on the Stop Online Piracy Act, which was introduced by the panel’s chairman, Texas Republican Lamar Smith, in October and is backed by the Washington-based MPAA and the Recording Industry Association of America. Smith’s bill has multiple co-sponsors from both parties.
Smith released an amendment to his bill on Dec. 12 seeking to resolve technology-industry concerns by narrowing the definition of websites targeted under the measure and requiring an inter-agency study on the bill’s impact to the Internet’s domain-name system.
“Lawful companies and websites like Google, Twitter, Yahoo and Facebook have nothing to worry about this bill,” Smith said in an e-mailed statement today. “Unfortunately, that has not stopped some of the bill’s critics from spreading lies about the legislation in an attempt to stall efforts by Congress to combat foreign rogue websites.”
Smith said that “companies like Google have made billions by working with and promoting foreign rogue websites so they have a vested interest in preventing Congress from stopping rogue websites.”
Google agreed this year to pay $500 million to settle U.S. allegations that advertising for online Canadian pharmacies on its website allowed illegal imports of prescription drugs.
“We fight pirates and counterfeiters every day and we believe, like many other tech companies, that the best way to stop them is through targeted legislation that would require ad networks and payment processors -- like ours -- to cut off sites dedicated to piracy or counterfeiting,” Samantha Smith, a Google spokeswoman, said today in an e-mail.
The proposed amendment to the bill “doesn’t clear up the tech industries’ concerns about censorship or a private right of action,” referring to a provision that would let copyright holders take non-U.S. websites to court, she said.
Facebook is reviewing the amendment, Andrew Noyes, a company spokesman, said in an e-mail.
Smith’s amendment “retains the fundamental flaws of its predecessor by blocking Americans’ ability to access websites, imposing costly regulation on web companies and giving Attorney General Eric Holder’s Department of Justice broad new powers to police the Internet,” Issa said in a statement yesterday.
--Editors: Steve Walsh, Michael Shepard
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