On Wednesday, website and individuals protested the idea that the government could shut down websites without a trial, arguing that the power granted the government rights that would effectively violate the First Amendment, which guarantees free speech. In an editorial on this site, we expressed concerns that the proposed legislation known as SOPA, or the Stop Online Piracy Act, overextended without clearly stating that it was to be used to enforce copyright law.
Today, a Federal grand jury in Virginia handed down an indictment on seven individuals, agreeing that they should be brought on trial for violating U.S. law. The grand jury was able to convene after prosecutors discovered that MegaUpload was hosted in Virginia. The organization is not based in the United States, and it's operators are not known to reside here. If it wasn't for the Virginian connection, officials say they wouldn't currently have any means to stop MegaUpload which they say caused $500 million in damages to domestic businesses.
Seeking to enforce U.S. regulations on other countries, Congress introduced two laws. The House introduced SOPA, the Stop Online Piracy Act, and the Senate introduced a longer version called the PROTECT IP Act. PROTECT IP, sometimes known as PIPA, is designed to enforce certain provisions of the Digital Millenium Copyright Act. Both laws, however, are designed to give law enforcement officials a way to enforce U.S. laws outside the U.S., by giving them the power to cut off funding for illegal businesses.
The reasoning behind applying U.S. copyright law to other countries is because, of course, people in the United States use these sites all the time. In the early 2000s, the Motion Picture Association of America and the Recording Industry Association of America began ill-fated legal campaigns against individuals who illegally downloaded content. As public opinion turned, the two began to turn their attention to the sites that enabled users to circumvent copyright law. These sites, like MegaUpload, have a certain common-man appeal.
After all, MegaUpload is able to bring content to people for free that Hollywood studios charge money for. Sites like MegaUpload can deliver faster than many legal platforms.
Then again, MegaUpload did make a few dollars. The Justice Department says New Zealand authorities seized cars with license plates like "GUILTY" and "MAFIA." Founder Kim Dotcom made $42 million in 2010. Although they claimed that their business was legitimate and that unauthorized uploads and downloads were too difficult to police, chat logs indicate that the site operators knew that they were "modern days pirates :)"
And it did so without overhead. The site took advantage of its inexpensive-to-operate nature - it didn't require, for example, that actors were paid. Or that musical artists received revenues. There was little marketing necessary, even, and server expenses, although high, were less than the $175 million it brought in.
But most importantly, MegaUpload thought it was safe. Its model was to take American intellectual property and make it available to Americans but to do so from another country. The only available option would be to sue the people downloading and, MegaUpload knew, that kind of behavior had given the MPAA and RIAA a bad name.
Laws like SOPA, PIPA, and OPEN, another anti-piracy proposal, are designed to close that door for businesses like MegaUpload. They would allow the United States to go after foreign organizations that violate U.S. copyright law.
They aren't perfect. SOPA is too broad, PIPA is somewhat confusing, and OPEN is too weak. Anime Defense Project Inc. has expressed doubts that SOPA would be effective at combating piracy. We believe that acts like the PROTECT IP Act and the OPEN Act, and that activism and education, are the only effective ways to combat piracy.
