Access Chokepoints

This chapter explains how the transnational regime uses search engines (especially Google) and domain name registrars (specifically GoDaddy) to throttle access to infringing sites. It traces efforts by the U.S. and U.K. governments, along with rights holders, to pressure Google and GoDaddy into adopting the non-binding agreements. It then presents two case studies. The first discusses search engines’ regulation of search results linking to infringing sites and a non-binding agreement struck among search engines (Google, Yahoo, and Microsoft) at the behest of the U.K. government. The second case study examines GoDaddy’s efforts to disable so-called illegal online pharmacies that operate in violation of U.S. federal and state laws. The chapter concludes that Internet firms’ practice of using chokepoints to dissuade access to targeted websites is highly problematic as legitimate websites are mistakenly targeted and sanctioned. Automated enforcement programs exacerbate this problem as they significantly increase the scale and speed of rights holders’ enforcement efforts without a corresponding increase in oversight.

Internet Firms Become Global Regulators

Having set the backdrop to the private agreements, this chapter discusses how the non-binding agreements emerged from distinct historical and political circumstances. It provides a brief historical overview that traces the growing influence of multinational rights holders on the U.S. government’s intellectual property policymaking processes from the late 1970s to 2012. The chapter then examines in detail four U.S. intellectual property bills, including the controversial Stop Online Piracy Act, which proposed to reshape fundamentally the online regulation of intellectual property rights infringement. In doing so, the chapter documents a significant shift in enforcement strategy from a focus on removing problematic content (e.g., advertisements for counterfeit goods) to disabling entire websites for allegedly trafficking in counterfeit goods. The chapter argues that Internet firms have become global regulators (known as macro-intermediaries) attractive to governments and corporations for policing a wide range of social problems, including counterfeit goods. The chapter concludes that government officials from the U.S., U.K., and European Commission played a central role in pressuring Internet firms to adopt the non-binding agreements. These agreements serve strategic state interests as well as the financial interests of rights holders.

Changing the Enforcement Paradigm

This chapter reflects upon the case studies in the three preceding chapters to examine the inter-dependencies and varying interests among corporate and state actors in the regulation of online infringement. It considers how the private transnational regime regulates through technology and concludes major intermediaries have the capacity to act as private arbiters of the legality of goods, services, and technologies. The agreements are designed to streamline, simplify and accelerate enforcement processes to enable regulation to occur globally, rapidly and over a mass population. Principles of due process and accountability, however, are generally incompatible with the shift toward rapid mass policing. The non-binding agreements are intended to push intermediaries to exceed their legal responsibilities voluntarily, in the absence of legislation and court orders, in a form of compliance-plus regulation. The goal is also to enable U.S. and European rights holders to set rules regarding the protection of intellectual property that are then exported worldwide, especially to China.

Marketplace Chokepoints

eBay and Taobao represent a different dimension of the private transnational anti-counterfeiting regime. These marketplaces are legally operating marketplaces in which some individuals illegally sell counterfeit goods, which differ from infringing sites that may have few, if any, legitimate activities. eBay and the China-based Taobao marketplace have been subject to considerable government and industry pressure to strengthen those enforcement efforts outside legislation and judicial orders. This chapter examines two little-known informal agreements. In the first, eBay agreed, at the behest of the European Commission, to work with rights holders throughout the European Economic Area to crack down on the online sale of counterfeit goods. In the second case, Taobao, China’s largest online marketplace, has worked at the direction of the U.S. government and U.S. rights holders to overhaul its enforcement policies. The marketplaces’ strategies of policing their platforms using automated enforcement programs raise challenges similar to those identified in chapters 4 and 5. Rights holders often employ brand-protection companies, part of the larger private security industry, to identify and remove sales listings for counterfeit goods.

Revenue Chokepoints

The chapter examines how payment providers (PayPal, Visa and MasterCard) and advertising intermediaries (Google, Yahoo and Microsoft) police websites selling or advertising counterfeit goods through non-legally binding agreements. These agreements essentially institute controversial provisions from the failed Stop Online Piracy Act. Payment and advertising intermediaries withdraw their services from websites selling counterfeit goods (termed ‘infringing websites’), thereby throttling the sites’ revenue. Major payment providers are especially powerful regulators as they can starve sites of revenue by terminating their payment services, which can be difficult to replace given the significant market share controlled by Visa, MasterCard, and PayPal. Macro-intermediaries’ latitude in designating certain content or behavior as ‘inappropriate’ for their platforms raises serious questions about unfair regulatory behavior that may inadvertently – or, more troublingly, deliberating – target lawfully operating sites. The chapter’s case studies examine a U.S. payment-termination program and programs (one in the U.S. and the other in the U.K.) to terminate digital advertising services to infringing sites.

Secret Handshake Deals

This chapter sets the scene for the rest of the book by describing the emergence of non-legally binding enforcement agreements among large Internet firms through a series of closed-door meetings. It introduces the key actors: mostly U.S.-based Internet firms, multinational rights holders, influential industry associations, and policymakers and politicians from the U.S., U.K., and European Commission. Together these actors form a private transnational regime with the goal of suppressing the trafficking of counterfeit goods on the Internet. To provide context, the chapter explains the importance of regulating intellectual property rights to rights holders and governments, as well as the many challenges involved in identifying and policing the distribution of counterfeit goods. The chapter introduces the concept of ‘macro-intermediaries’ (which are globally operating, powerful Internet firms) and explains how these major Internet firms regulate through technology (termed ‘techno-regulation’) to remove content from and disable websites selling counterfeit goods. It describes the focus on five types of Internet sectors (search, advertising, payment, domain name, and marketplace). Companies providing these services can enact different types of regulatory ‘chokepoints’ to target the distribution of counterfeit goods.

A Future for Digital Rights

The conclusion argues that Internet firms and the U.S. government have common interests in expanding the surveillance economy, which refers to the massive online accumulation of information. It also considers measures to address the considerable challenges raised by the state-endorsed non-binding enforcement agreements. It explores ways in which states and corporations can use technology to regulate in ways that are fair, proportionate, and accountable. The chapter offers several recommendations. First is the need to cultivate greater public awareness of corporate regulation on the Internet. One way to do so is through industry transparency reports, in which corporate actors participating in the regulation disclose their involvement in regulation, a practice that has become more common following Edward Snowden’s disclosure of Internet firms’ involvement in the U.S. government’s Internet surveillance programs. The book ends with a call to establish digital rights and looks for inspiration to Brazil’s 2014 law, Marco Civil da Internet, which codified a set of digital rights.