Bloomberg News

Google Claims Censorship as Hollywood Fights for Piracy Bills

December 21, 2011

Dec. 13 (Bloomberg) -- Internet companies led by Google Inc. are waging a last-ditch campaign to block anti-piracy legislation before the U.S. House Judiciary Committee, saying the Hollywood-backed measure amounts to online censorship.

Lobbying in Washington by the Web industry and motion- picture studios has intensified as the panel prepares for a scheduled Dec. 15 vote on the bill, which has become a flash point in the debate over how to curb online trafficking of illegally copied movies and music.

The controversy has drawn in the heads of movie studios, who see the legislation as a way to crack down on intellectual property theft. Google Chairman Eric Schmidt has decried the measure as “a form of censorship.”

“They should not criminalize the intermediaries,” Schmidt told reporters after a speech in Washington yesterday. “They should go after the people who are violating the law.”

The House legislation, and a similar measure in the Senate, would let the Justice Department seek court orders requiring Internet-service providers, search engines, payment services and advertising networks to block or cease business with non-U.S. websites linked to piracy. The House bill, introduced by Judiciary Committee Chairman Lamar Smith, a Texas Republican, has more than two dozen cosponsors in both parties.

“The bill works within the current system for intellectual property enforcement,” Smith said in a statement last week. “The sooner we cut off the flow of revenue to rogue sites, the better it will be for America’s innovators and job creators.”

White House Visit

The motion-picture industry is mounting its own counterattack in support of the legislation, through White House visits and a national advertising campaign.

The Motion Picture Association of America last week flew in studio executives from Fox and Warner Brothers along with Taylor Hackford, the director of “Ray” and the husband of actress Helen Mirren, to lobby for the anti-piracy bills.

The Hollywood delegation met with House Judiciary Committee members and made their case at the White House in meetings with Vice President Joe Biden, White House Chief of Staff Bill Daley, and Valerie Jarrett, a senior adviser to President Barack Obama.

The group visited Washington to dispel myths about the anti-piracy bills, Jim Gianopulos, chief executive officer of Fox Filmed Entertainment Inc., said in an interview last week with reporters and editors at Bloomberg’s Washington office.

“The nature of the opposition has been this sort of generic ‘It’s going to destroy the Internet. It’s going to eliminate the First Amendment. It’s going to stop innovation,’” Gianopulos said. Such “scare tactics” have nothing to do with the actual bill, he said.

Political Giving

Employees of television, movie and music companies have been the top source of political contributions to Smith for his 2012 re-election campaign, according to the Center for Responsive Politics, a Washington-based research group. Those industries’ employees were the second-biggest source of donations to Senator Patrick Leahy’s last re-election campaign in 2010, the center’s data show. Leahy, a Vermont Democrat and chairman of the Senate Judiciary Committee, sponsored the Senate bill.

Christopher Dodd, a Connecticut Democrat who served three decades in the Senate, is looking for a win in his new role as head of the MPAA, which grew powerful in Washington under the 38-year leadership of Jack Valenti, a onetime aide to Lyndon Johnson. The group’s members include Walt Disney Co., Viacom Inc.’s Paramount Pictures, Sony Corp., News Corp., Comcast Corp.’s NBC Universal and Time Warner Inc.’s Warner Bros.

‘Sky Is Falling’

Google’s Schmidt “engaged in sky is falling rhetoric attacking important legislation,” Michael O’Leary, senior executive vice president for global policy at the Motion Picture Association of America, said in an e-mailed statement yesterday.

“There is broad recognition that all companies in the Internet ecosystem have a serious responsibility to target criminal activity,” O’Leary said. “Failing to act is not an option.”

Google, Facebook Inc. and other Web companies say the anti- piracy bills in Congress may require them to police the Internet and threaten the growth of the U.S. technology industry.

Google, the world’s largest Web search provider, and Facebook, the world’s largest social network, are boosting their spending and presence in Washington to cope with a burgeoning list of issues, including online piracy as well as consumer privacy and antitrust. Google has hired 19 new outside lobbying firms this year, and Facebook has two new outside firms, Senate records show.

Alternative Proposal

Technology-industry groups are rallying around an alternative draft bill that would make the U.S. International Trade Commission, rather than the Justice Department, the main arbiter of piracy complaints. The agency has the power to block imports of products found to infringe intellectual-property rights.

The alternative proposal, from Senator Ron Wyden, an Oregon Democrat, and Representative Darrell Issa, a California Republican, provides effective remedies “without creating new liabilities for lawful, U.S. technology companies,” the Computer & Communications Industry Association, the Consumer Electronics Association and NetCoalition wrote in a letter yesterday.

NetCoalition’s members include Google, Amazon.com Inc. and Bloomberg LP, the parent company of Bloomberg News.

Employees of high-technology companies were Wyden’s eighth- biggest source of campaign donations during his 2010 re-election campaign, and have been Issa’s 13th-biggest source for his 2012 re-election, according to data from the Center for Responsive Politics.

Television Ads

Creative America, a Toluca Lake, California-based nonprofit founded by Hollywood studios, started running ads promoting the House and Senate anti-piracy bills last week in the Washington area and on national cable networks, and will put ads in newspapers starting today, said group spokesman Craig Hoffman.

The House Judiciary Committee published an amendment yesterday to its anti-piracy bill that addresses some of the technology-industry criticisms of the measure.

The amendment, which will be taken up during the Dec. 15 committee vote, seeks to narrow the definition of non-U.S. websites that engage in piracy and calls for an inter-agency study on the bill’s impact on the Internet’s domain-name system, among other changes.

The House bill is H.R. 3261, the Stop Online Piracy Act, and the Senate bill is S. 968, the Protect IP Act.

--With assistance from Jonathan D. Salant in Washington. Editors: Michael Shepard, Timothy Franklin

To contact the reporter on this story: Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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