US IP Czar Gets Companies To Cut Off Unlicensed Online Pharmacies

from the borderline... dept

Earlier this year, we noted that the US IP Czar, Victoria Espinel, had been making the rounds to ISPs, registrars, payment processors and others to get them to agree to voluntarily start shutting off certain “infringing” sites. Now we see the results of those talks. Espinel has announced that a variety of companies — including Google, Visa, Mastercard, Paypal and Network Solutions — have apparently agreed to effectively disappear and cut off certain websites. The focus, for now, is on “unlicensed web pharmacies,” with the idea being that these companies will effectively kill off those sites:

Together, the firms hope to tackle every link in the chain that keeps unlicensed pharmacies operating by stopping them showing up in search results, taking their websites offline, delisting the domains they use and stopping payments reaching them.

Think COICA without COICA — but just with government pressure on companies. Seeing Visa, Mastercard and Paypal on the list certainly isn’t surprising, after those three already did the same thing in cutting off Wikileaks. However, it’s a bit surprising to see Google agree to this (Update: Google says that it’s only agreed to cut off advertising that violates its policies). If there’s a trial and these sites are found guilty of violating the law, then I can see cutting them off — but once again, it appears that this is the government trying to kill off websites, without a trial.

And, yes, it’s for “unlicensed web pharmacies,” and everyone plays up the spam and the fake (potentially dangerous) drugs. Those are a serious problem. But they also lump in the (quite common) grey market pharmacies as well — which often allow people to get drugs from outside the country at much more affordable rates. Shutting down fake drug sellers is fine. Shutting down the grey market drug sellers is a bit of a bigger issue.

On top of that, given the recent ICE domain seizures and the whole COICA law — both of which Espinel has spoken out in favor of — it’s not hard to see how the mandate behind this particular program is quite likely to grow well beyond “unauthorized web pharmacies” to other sites as well. In fact, MasterCard has apparently already agreed to cut off websites deemed “pirate” sites.

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Companies: google, mastercard, network solutions, paypal, visa

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Comments on “US IP Czar Gets Companies To Cut Off Unlicensed Online Pharmacies”

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49 Comments
Anonymous Coward says:

This is actually a very useful way to deal with these issues. When a website is operated with a profit motive in mind, removing the ability to easily make money is a very good way to make it unprofitable, and have them shut down.

Visa, Mastercard, et al are in a situation where they don’t have to have a court judgement that something is illegal to stop processing for it. In fact, their agreements essentially are the reverse, merchants may be required to prove that their businesses are legit to obtain processing. Remember, processing is not a right.

What the US government is doing at this point is basically reminding these processing companies that they can be liable for being the purse for these illegal operations.

Bravo for the government waking up and working to take away the profits from scammers. It is amusing to see the pirates getting worried, after all, isn’t file sharing suppose to be free, not a business model?

Anonymous Coward says:

Re: Re:

“What the US government is doing at this point is basically reminding these processing companies that they can be liable for being the purse for these illegal operations.”

It is not Mastercard providing the money, it is the person who bought the product. Mastercard should be no more responsible, and should be held no more liable, than the post office should be if someone illegally delivered illegal content via the mail. The government has no business telling Mastercard who they should or should not send money to without due process. The government shouldn’t be allowed to effectively deprive someone of their work without due process. If the laws allow for this unacceptable circumvention of due process then the laws need to change. If the government is to prevent someone from getting paid, there must be due process, they can’t just arbitrarily deny people of income and work without due process.

Anonymous Coward says:

Re: Re: Re:

Simple rules. If I give you $10 to buy a crack rock, and someone else delivers the rock, you are still part of selling crack. You may forward $9.50 to the dealer and say “I was just collecting money”, but the reality is you are in the crack rock business.

Mastercard ends up in the same boat. They are “just collecting money”, but they are not exempt from prosecution for knowingly doing so for an illegal operation.

Rather than taking the risks that come with finding out if the drug sales are legal or not, Mastercard chooses to cut them off and stop doing business with that sort of site.

There is no issue of due process. Mastercard is making an informed decision as a company that covers their legal ass, nothing more, and nothing less.

The pill sellers can keep selling pills. They just can’t get paid so easily anymore.

Chronno S. Trigger (profile) says:

Re: Re: Re: Re:

If I send money threw Western Union to someone else and they send me a crack rock threw FedEx, who’s liable?

Should Western Union be arrested for drug dealing? Should FedEx? No, hell no, and I’ll say it again, hell no. Out of four parties involved, two did something illegal. This is no different.

Anonymous Coward says:

Re: Re: Re:2 Re:

No, neither fedex or western union is aware of the use.

However, Mastercard is. By their cardholder agreement, they require that the details of the site are checked, often that the website is reviewed in detail, and so on. The acquiring bank (the one doing the processing online) would have all of the referring URL information and such to spot check what they are processing for). Mastercard is not ignorant of what they are selling online, in fact, they are very strict.

There are plenty of IPSPs (third party billers) that have been blown off the internet by mastercard and visa for processing these sorts of things. We won’t even discuss what happens if you try to backdoor them into accepting money from the US for gambling online. ๐Ÿ™‚

Hephaestus (profile) says:

Re: Re: Re:3 Re:

“If I give you $10 to buy a crack rock, and someone else delivers the rock, you are still part of selling crack.”

“By their cardholder agreement, they require that the details of the site are checked, often that the website is reviewed in detail, and so on. “

One really huge problem with your argument. The local laws may allow legal pharma to be sold or shipped to other countries, to ship legal DVD’s or CD’s that cost less locally to other countries, to allow for the government to subsidize the product manufactured to be sold to other countries.

Banning these companies sales due to the need for political contributions, political ads, and the presidents next term is going to backfire. As these companies have resources of their own.

Personally I think its time for a hail mary play … oh wait … corporations can contribute as much as they want now …

good on them ๐Ÿ˜€

Anonymous Coward says:

Re: Re: Re: Re:

“but they are not exempt from prosecution for knowingly doing so for an illegal operation.”

but it hasn’t yet been determined, through due process, that such an operation is illegal. Mastercard shouldn’t be held liable if they didn’t know the operation was illegal, the people conducting the operation should be. Mastercard doesn’t only transfer money for those conducting illegal activities, they do so for those conducting legal activities, and it shouldn’t be their job to police who is and who isn’t obeying the law. That’s the governments job, and it’s the governments job to try those breaking the law, and there should be no law that allows them to get Mastercard in trouble since they aren’t in the business of delivering money to illegal dealers and so it’s not their responsibility to ensure the legality of the transfer. Just like the post office shouldn’t be liable for what gets delivered or the phone company shouldn’t be liable for illegal activity done over the phone line.

Anonymous Coward says:

Re: Re: Re:2 Re:

(now, if Mastercard were in the business intentionally of delivering money to illegal businesses, I would understand, but they are a general money transferring agency and it’s not their job to ensure the legality of the money transfers and the government shouldn’t be allowed to in any way cut someone off from receiving payment, effectively taking away their job, by threatening intermediaries, without due process. The government doesn’t get to find ways to circumvent due process, if they want to effectively take your job from you there must be due process).

Hephaestus (profile) says:

Re: Re: Re:4 Re:

“but it hasn’t yet been determined, through due process, that such an operation is illegal.”

I am going to point out one very simple thing. This is a trade agreement problem.

Now that ACTA has been watered down the gloves have come off. The IP enforcement Czar and justice are going nuts, confiscating domains, shutting down the credit lines, in an attempt to stop global competition from creeping into the US. It was previously done with N.A. over the border pharma.

ACTA seems to fail to meet the criteria set out at the beginning of the agreement to protect pharma, software, and content. Steps seem to be being taken to implement ACTA in an irrational way, violating several amendments of the constitution.

“We paid you” is probably the line motivating them …

Sucks being them …

Josh in CharlotteNC (profile) says:

Re: Re: Re: Re:

“Simple rules. If I give you $10 to buy a crack rock, and someone else delivers the rock, you are still part of selling crack. You may forward $9.50 to the dealer and say “I was just collecting money”, but the reality is you are in the crack rock business.”

Horrible analogy. Visa and MC are neither selling, buying, or delivering anything. They are enabling one person to exchange a good or service for money with another person without knowing or caring about the details of the transaction.

In your crack analogy, Visa would be the US Government itself, since it printed the money that allowed the crack to be sold.

Anonymous Coward says:

Re: Re: Re: Re:

“Together, the firms hope to tackle every link in the chain that keeps unlicensed pharmacies operating by stopping them showing up in search results, taking their websites offline, delisting the domains they use and stopping payments reaching them. “

That doesn’t sound like they’re getting a trail, it sounds like they’re getting systematically shut out of the market (partly as a result of government influence) with no trial to justify such governmental influence.

Hephaestus (profile) says:

Re: Re: Re:2 Re:

“That doesn’t sound like they’re getting a trail, it sounds like they’re getting systematically shut out of the market (partly as a result of government influence) with no trial to justify such governmental influence.”

Exactly … Its called panic. People and govt’s are taking notice. ACTA is watered down due to pressure from rights groups and Anon type. Australia is rethinking IP. The DEA is a failed law in the UK because it is to late. The EU has a “trade agreement” about indian pharma. Pirate party (nuff said). France is having problems with Hadopi on purpose. It all adds up to panic on the IP side. Judges in the US are actually beginning to take notice of IP issues and request “Further” information.

In the end. I do personally believe. That a judge in the US will combine the sherman anti-trust act and the copyright clause in a judgement. Stating something along the lines of …

“In the past the united states had several monopolies. Rail, Telephone, (insert more monoplies here). Each of these was broken up. Today we have a government whose only goal seems to be supporting monopolies.

This government was founded on the words “We the people”. Today it is we the corporations that fund the elections…”

For those of you who have never read the copyright clause, or the sherman act …

Article I, Section 8, Clause 8 of the United States Constitution, it reads …

“To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Sherman anti trust act

Go Judicial branch … its what you are supposed to do!!

Okay, I’m on a horse again, not a milk crate ๐Ÿ™‚

MrWilson says:

Re: Re:

“It is amusing to see the pirates getting worried, after all, isn’t file sharing suppose to be free, not a business model?”

Aside from the fact that this statement has nothing to do with the article or even what you said before it, you’re assuming that “free” and “business model” are mutually exclusive but many companies have made a lot of money (even before the internet existed) by including “free” as a part of their business models.

And why would pirates be worried about this issue anyway? They rob ships on the sea and as far as I know, don’t use Visa or Mastercard to bankroll their operations.

Anonymous Coward says:

U.S. pharmaceutical corporations have been known to buy drugs from Canada and sell them for three times as much in the U.S. Might as well just directly buy them from Canada. But U.S. pharmaceutical corporations used to argue that it’s somehow safer to buy them from U.S. pharmaceutical corporations, and not Canada, despite the fact that U.S. corporations get them from Canada (at least I used to see this argument on the news a long time ago)

Anonymous Coward says:

Even though we do have medical insurance, one of my wife’s prescriptions is name brand only and not covered. So it costs $250 to have filled here.

I have been buying it from an offshore pharmacy that doesn’t ask for a prescription (though she has one) and the price is 90% less. The drugs that came are from the UK, but are the same name brand she would get here. A big US drug manufacturer’s UK subsidiary.

Now, all those legitimate pharmacies that are in places that do not enforce prescription requirements are being forced out of business, probably by BIG PHARMA.

We are going to have to pay $250 for a prescription we could get for $30. Made by the same company. Ridiculous.

The solution to all this would be for the US government to refuse to buy any medicines for VA/military/medicare/medicaid for any more than the lowest amount that same company sells for in other countries. Clearly those levels are profitable or they wouldn’t sell there.

Anonymous Coward says:

This is great for the FDA!

With all the new accountable (and taxable) revenue coming in from licensed pharmacies, I hope this will result in FDA job growth.

With all the pharma lawsuits filed in the past 10 years, there’s obviously a quality control problem. Growth at the FDA will surely result in better clinical testing of pharmaceuticals before they come to market.

Anonymous Coward says:

We’re talking about spammers who sell viagra. That’s probably all illegitimate and should be stopped, or at least the spam. But these tactics will never work on them. Whack-A-Mole is right!

There are also pharmacies that are in jurisdictions that do not require a prescription, so it’s not illegal for them to sell to US buyers.

US Customs understands this and does not intercept drug shipments to individual buyers in the US.

These pharmacies sell US or European made legitimate drugs for much less than BIG PHARMA to people who need them.

Some powerful forces want them all gone, so everyone would have to buy from BIG PHARMA at inflated prices.

By lumping illegal viagra sellers with the legitimate operations the government is hurting those that are not doing anything wrong while trying vainly to control that which they will never be able to stop.

Anonymous Coward says:

Re: Re:

Actually, this really puts an end to the whole whack-a-mole situation, because it stops these companies from having income. They can move websites all the like, they will end up with the same problem, the inability to conveniently collect money from potential customers.

I don’t see any indication where the processors are stopping to process for legitimate pharmacies. Can you please point that out for us?

Anonymous Coward says:

Re: Re: Re:

An end to Whack-a-Mole?
I doubt that.
If the cost savings for medications for uninsured people in the US are very great through off-shore pharmacies, how long do you think it will be before people start using Western Union, or online money orders, or how about good old “checks in the mail”.
If there is a will, there is a way.

LennyP says:

Re: and these pharmacies are critical for many with chronic illnesses

The medicine my MD prescribed for me that my insurance company won’t cover and has a Maximum Suggested Retail Price of $0.27 per pill (according the package) in India, and I get from Canada for $1.47 per pill because in a US pharmacy I would have to pay $16.00 per pill. Without these medications to help alleviate some of my symptoms there’s no way I could be useful or productive or work.

Pharmacology/Health Care: A prime example of America’s finest capitalist ingenuity — who else would have figured out how to get blood out of a stone?

Anonymous Coward says:

I question payment processers logic on this from a business perspective. Now you are creating a ‘blacker’ market where visa and MasterCard become irrelevant, and customers now question whether MC/visa is worthwhile an investment. Why use them if the loss risk to your revenue is high. I have no qualms using cash for as many transactions as possible to protest, hope others’ do as well.

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