A popular culture aphorism which is useful for teaching or comprehending intellectual property laws is “follow the money.” Often a law or a court decision only makes sense when its financial implications are contextualized. In this interesting, clear and engagingly well-written article, Professor Annemarie Bridy of the University of Idaho College of Law looks at how and why monetary transactions can be stopped cold in cyberspace by financial institutions that initially appear to be acting against their own business interests, but are actually submitting to unseen authority of questionable legitimacy. It is a story of commoditized sex, online sales of illegal drugs, and copyrighted rock and roll.
At the outset, Bridy positions her account of Internet payment blockades in the context of scholarship about powerful corporate actors doing the government’s bidding as the result of behind-the-scenes pressure. She credits Ronald Mann and Seth Belzley with important observations about “how concentration and high barriers to entry in the market for payment processing make payment intermediaries a ‘highly visible ‘choke point’ for regulatory intervention.'” (P. 4, citing to Ronald Mann and Seth Belzley, The Promise of Intermediary Liability.) She further notes in her introduction that: “Public-private regulatory cooperation of this sort goes by many names in the First Amendment literature, including proxy censorship soft censorship, and new school speech regulation,” citing to relevant works by Seth Kreimer (Seth F. Kreimer, Censorship by Proxy), Derek Bambauer (Derek E. Bambauer, Orwell’s Armchair), and Jack Balkin. (P. 5.)
As is so typical in any unsavory and overreaching account of copyright law in cyberspace, a major anti-hero in the sordid tale of Internet payment blockades is a pornography company, Perfect 10. Bridy recounts the story of Perfect 10’s aggressive but ultimately unsuccessful litigation efforts to hold payment intermediaries legally responsible for alleged copyright infringement by third party websites under the theory that providing payment processing services made them contributorily and vicariously liable. Judicial findings included determinations that: providing payment services did not rise to the level of a material contribution to the infringement; providing payment services did not induce infringement because there was no clear expression or affirmative act of specific intent to foster infringement; and the right and ability to indirectly affect the degree or ease of infringement by providing payment systems did not amount to the right or ability to control the infringing activity.
Bridy observes that after their judicial defeats Perfect 10 and other content owners pressed the U.S. government to devise other mechanisms of control over private payment systems. Bills to achieve this were introduced into Congress, intended to establish new statutory authority in the form of the Combatting Online Infringements and Counterfeits Act (COICA), the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA). However, these proposed laws proved very unpopular with Internet companies such as Google, Mozilla, Reddit and thousands of others, which whipped themselves into a massive and productive frenzy of protest. Many potentially affected companies leveraged their customer bases to publicly express deep and dire disapproval of this menu of proposed legislation, which was forthwith discarded hot-potato style.
But that was hardly the end of the matter. Bridy cogently explains that after abandoning this quest to directly regulate private payment processors, the U.S. government began deploying “soft” pressure and ardent persuasion to turn private payment entities such as Mastercard, Visa, American Express, Discover, and Paypal into controllable financial chokepoints in cyberspace. These chokepoints, which she labels Internet payment blockades, now facilitate the financial freeze out of political targets like Wikileaks, and of sites accused of vending potentially counterfeit or infringing goods and services.
Though they are ostensibly acting voluntarily, Bridy details the ways that payment intermediaries are essentially forced to police online activities virtually worldwide at the behest of Congresspeople, the Obama administration’s Office of the U.S. Intellectual Property Enforcement Coordinator, and myriad content owners through an opaque system of ironically denominated “best practices.” Bridy warns that there are a number of reasons that these allegedly best practices actually might not even qualify as halfway decent practices: extraterritorial enforcement of U.S. laws is improperly facilitated, extrajudicial remedies are unsuitably enabled, and extraordinary efficiency comes at the expense of due process and transparency. Important disputes are now privately adjudicated, displacing four letter f words like free (as in free speech) and fair (as in fair use) with (at least for this Jotwell reviewer) another four letter f word which communicates anger and despair at this reprehensible development.
Ultimately, Bridy concludes that new payment systems could develop which are more resistant to government interventions. Bitcoin, she asserts, possibly is one of them. She spends the last section of the article explaining how Bitcoin works and evaluating its potential as an effective Internet payment blockade runner. I learned a lot from this, as I did from this excellent article in its entirety.
