Yesterday, I was on a “panel” discussion at the Congressional Internet Caucus’s “State of the Net” event. At some point, I believe we’ll have some video of that, which we can post. However, at one point, moderator Tim Lordan asked panelist Steve Tepp, from the US Chamber of Commerce, about the claims that SOPA/PIPA only impact “foreign” sites, and argued that under the definitions in the bill sites like Google.ca or Amazon.co.uk would be subject to the bills, and thus they would effect the American companies who run them. Tepp insisted this wasn’t true, because the bill only applies to “US-directed sites” and a site that is a .ca or .co.uk wouldn’t be considered US-directed. However, First Amendment lawyer Marvin Ammori sensed a pretty obvious problem with that. If what Tepp argues is true, he’s basically saying that SOPA and PIPA apply to no websites at all. Remember, supporters of the bills insist that they don’t apply to .coms or .orgs or any other site using a TLD controlled by a US register. So that wipes out that batch of domains. But, here, Tepp now seems to be claiming that it also doesn’t apply to any site with a country specific TLD… because those aren’t US-directed. So… um… what’s left?
First, the bills define US-directed site to mean almost any site that you can access in the US. PIPA does not have a definitive test, but it lets courts determine which sites are directed to the US based on several indicia, including whether the “Internet site has reasonable measures in place to prevent such goods and services from being accessed from or delivered to the United States.” (PIPA, page 48.) Meaning, if the site hasn’t blocked American users from accessing the site, then it’s US-directed. The whole point of the Internet, though, is that sites are globally available, and not blocked for particular countries. SOPA, on the House side, merely requires “minimum contacts” sufficient for personal jurisdiction, which is a very low standard that would touch most sites–as any law student would learn after reading the International Shoe case in the second week of Civil Procedure. (See SOPA, page 9).
Second, this argument is unconvincing because it suggests that the bills would cover zero sites in the whole world. If Amazon.co.uk and Google.ca are exempt from the bill, then so are ThePirateBay.co.uk or ThePirateBay.ca. The point of SOPA and PIPA, in theory, is to target foreign sites, who are defined based on having foreign domain names. So, the Chamber is saying, “Don’t worry Google.com won’t be subject to the bills because that’s not a foreign site.” Now it says, “Don’t worry, Google.ca won’t be subject to the bills because it’s not a US-directed site.” Does that mean neither MegaUpload.com or MegaUpload.ca is subject to the bill? By my count then, the bills don’t apply to any sites that have a domestic domain name nor do they apply to any sites that have a foreign domain name.
The Chamber is trying to convince us that the bills apply to zero websites and companies? They wouldn’t apply to MegaUpload.com or MegaUpload.ca, Google.com or Google.ca, ThePirateBay.org or ThePirateBay.fr?
This doesn’t strike me as highly convincing.Why would studios and labels spend millions trying to pass a bill that affects zero websites and companies?
Indeed. It’s this kind of duplicity that has people so fed up with the lobbyist/politician lies being spread about this bill by supporters. The language was written purposely, so that they could insist it won’t actually do any of the awful things the bill clearly allows… while knowing full well that’s exactly how the bill will be used (regularly) after it passes.
A few weeks ago, we did a step-by-step detailed debunking of the claims by the US Chamber of Commerce’s Steve Tepp. He had gone on PBS News Hour to defend the illegal domain name seizures, as well as the plans for SOPA and PROTECT IP. He made claims about how “huge” a problem “rogue sites” are, and quoted some big sounding numbers in a very serious voice. We went through the details for where those numbers came from and discovered (spoilers!) that he was being extremely disingenuous in presenting the numbers. The details actually showed that he was conflating a few different issues, using ridiculously shoddy methodology, and mixing in a few dodgy assumptions on top of that. In fact, the actual numbers suggested the real problem — that of dangerous counterfeit goods being sold, was a fairly tiny problem.
Techdirt reader Nick Dynice thought that the post would work well as a short documentary, and took it upon himself to use the post as a script to create the following video about how Steve Tepp and the US Chamber of Commerce mislead with statistics in a dishonest way to garner support for the illegal domain seizures, as well as the unconstitutional proposals for SOPA and PROTECT IP.
The issues of SOPA/PROTECT IP and censoring the internet are slowly creeping into more mainstream news sources. PBS Newshour hosted a brief debate, mostly focused on the recent domain seizures. The debate was between Steven Tepp, the former Copyright Office official, who jumped ship to the world’s largest lobbying organization, the US Chamber of Commerce (who, along with the MPAA has been leading the charge in getting SOPA and PROTECT IP approved) and Larry Downes, author and consultant, whose excellent work on both the domain seizures and SOPA/PIPA we’ve mentioned repeatedly. Unfortunately, as you might expect in 10 minutes, it’s hard for anyone to get into much depth. I think Downes made a key point early on in noting that these domain seizures are almost entirely “symbolic,” since the sites themselves aren’t seized.
But what I really wanted to focus on was how Tepp misleads with statistics. This is a specialty of the US Chamber of Commerce, and Tepp plays exactly to expectations here. First, you can watch the full 9 minute video, if you’d like:
And let’s call out the specific examples of how Tepp misleads with stats:
“The scope of the problem is unbelievably huge. Rogue websites — those dedicated to the theft of American intellectual property, our creative and innovative products — get over 53 billion visits every year. That’s 9 visits for every human being on the face of the earth. And they’ve been estimated to do at least $135 billion in harm to legitimate businesses. The products they sell are made in completely unregulated facilities, and can often be, not only shoddy, but harmful to consumers’ health.”
So much misleading in one little paragraph. Lets start with the 53 billion claim. Guess what? It’s from a US Chamber of Commerce-funded study by an anti-piracy monitoring company called MarkMonitor. And the details suggest serious problems with the study. First, the study itself was based on Alexa, widely considered the least accurate web traffic measuring tool out there. Second, the number of “visits” to any site is an especially meaningless number — especially when trying to discuss the actual economic impact of such visits. Who cares how many visits there are if we don’t know anything about what people do on those sites?
Third, a large percentage of those visits all come from three sites: RapidShare, Megavideo and Megaupload. These are three cyberlockers that the industry has declared as “rogue,” but which have significant legitimate purposes. Rapidshare, in particular, has been repeatedly ruled to be perfectly legal, both in Europe and in the US. The company follows DMCA takedown rules and has plenty of legitimate uses. Including Rapidshare in these calculations makes the whole thing a joke. And none of those sites are involved in “selling” counterfeit goods that put US citizens in harm’s way.
Fourth, that “estimated to do at least $135 billion in harm,” is a totally made up number. The US Chamber of Commerce cites a different MarkMonitor report to support that. But it’s not actually a report or a study or anything like that at all. Instead, it’s promotional “white paper” (read: sales pitch) from MarkMonitor entitled “Seven Best Practices for Fighting Counterfeit Sales Online.” That report does say that “criminals” setting up ecommerce storefronts “will likely cost legitimate businesses $135 billion in lost revenue this year.” But it doesn’t source that number. Notably, other statistics in the report are sourced. Which makes you realize that the $135 billion is basically made up. But Tepp doesn’t mention that.
Fifth, he focuses on “the products they sell.” This is the really slimy part, for which Tepp should be ashamed (if the man had any shame at all). The obvious implication of all of this is that when you tie together these disparate numbers — you’ve got 53 billion visits to sites selling counterfeit goods that may be harmful to consumers. We’ve already pointed out that the 53 billion is bogus — but it’s even more bogus when combined with this final sentence. That’s because that same MarkMonitor report that gave us the 53 billion, also notes that the traffic to sites selling counterfeit goods is a minuscule percentage of the 53 billion. Specifically, the same report says that the sites selling counterfeit goods receive merely 87 million per year… or 0.1642%. That’s not 16.42%. Or even 1.642%. It’s 0.1642% of the total. In other words, the sites actually selling counterfeits… seem pretty small.
Sixth: even that exaggerates the problem — because even then you’d have to assume that every one of those sites involves selling counterfeits that are shoddy or harmful. But that’s crazy. Most counterfeits are merely replica versions, that are passable. They’re not harmful in any way. So now we’re talking about significantly less than 0.1642% of the big scary 53 billion he’s talking about. Basically, the 53 billion, besides being meaningless in general, has no connection to the rest of the claims about losses and harm to consumers. It’s complete and utter bunk.
What you have here is that Tepp and others are taking a real, but tiny problem: mainly an exceptionally small number of counterfeit drugs, and then pretending that the “harm” is broad and applying it to sites already judged to be perfectly legal, because some people use them for copyright infringement. The reports he relies on actually show what a tiny problem this is, but tries to mask that by lumping a bunch of totally disparate things together, from the tiny percentage of fake drugs out there… to the already judged to be legal cyberlockers like Rapidshare.
Tepp’s misleading bogosity doesn’t stop there. He then goes on to claim that these sites “steal jobs.” Um, how? But beyond the rhetoric, lets get back to the misleading numbers. Later on he states:
“Another study, earlier this year, showed that 19 million Americans have jobs that rely on ‘IP-intensive industries.’ This is a huge part of the American economy. 60% of US exports are from ‘IP-intensive industries’ and $7.7 trillion dollars are output from ‘IP-intensive industries.'”
This one we’ve attacked head on before. The intellectually dishonest bit here is easy to spot. It’s the reliance on “IP-intensive industries.” Not IP. The “study,” if you can call it that, involves the biggest maximalists teaming up to fund a report that defines “IP-intensive industries” extremely broadly and then pretends that everything that comes from such industries… is because of strong IP laws. That’s ridiculous, because you know who’s included in the “IP intensive industries”? Basically every tech company — including all of those which are fighting against these crazy new laws.
Tepp is being intellectually dishonest in the extreme here, suggesting that the only reason that the broadly defined “IP-intensive industries” are so successful is because of IP law. But that’s showed to be bogus quite simply. As CCIA has done for years, it uses the very same methodology to show that exceptions to IP contribute more to the economy than IP laws themselves. You can’t except one report without accepting the other since the methodologies are identical. There are only two logical conclusions from this: (1) the suggestion that those jobs, exports and output numbers are due to IP are complete bunk or (2) Tepp and the US Chamber of Commerce really believe we should do away with IP completely, since his own favored methodology shows that the less IP laws we have, the greater the output. So which is it, Steve?
Either way, Tepp is being painfully intellectually dishonest throughout the entire interview, citing facts and figures that are misleading in the extreme, if not completely bogus. What’s unfortunate is that none of the press that lets Tepp speak his mind ever calls him on these ridiculous claims.
Steve Tepp is the US Chamber of Commerce’s (the world’s largest lobbying group) point man on PROTECT IP/E-PARASITE/SOPA. His latest move is to try attacking anyone who points out the problems of E-PARASITE/SOPA. First up? Demand Progress, who dared to call it a “blacklist bill.” According to Tepp, it’s not a blacklist bill, because the lobbyists who wrote the bill (potentially including Tepp himself) were smart enough not to write “list” in the text of the bill.
Of course the bill doesn’t actually say that there’s a list. Just as the Chinese Great Firewall doesn’t actually involve the government “listing” sites, but merely threatens ISPs with liability if they let bad sites through, E-PARASITE massively broadens the definitions of what’s “dedicated to the theft of U.S. property” such that it now includes, more or less, the entire internet, and threatens sites with the equivalent of internet death: blocking from search engines, blocking from DNS (and more!), cutting off any funding sources. No, there’s no “blacklist,” there’s just the threat of cutting off just about any internet site. On top of that, there’s an awkwardly worded attempt to force every site to proactively monitor any infringement. Is that why the US Chamber of Commerce doesn’t allow comments on its site? Or is it because it knows that no one actually believes the crap it shovels?
But Tepp’s intellectual dishonesty is worse than just pretending that without the word “list” there’s no actual blacklist. No, the really cheap move is to imply that only the “anti-IP crowd” is against this bill. This is the latest strategy of those who wish to massively regulate the internet so that it looks more like TV — a broadcast medium, rather than a communications medium. They refer to anyone who points out the massive negative consequences of their legislative nastiness as being “anti-IP.” You’ve seen it in Techdirt’s comments for the past few weeks, with certain anonymous commenters throwing hissy fits about how I’m actually “pro-piracy,” when I’m anything but. If you don’t think this is part of the coordinated marketing campaign by the largest lobbying organization in the world, you’re not paying attention.
So, Steve, let’s be clear: being against this bill is not about being “anti-IP.” It’s about being pro-innovation, pro-internet. It’s about recognizing the massive benefits of an open internet. It’s about recognizing the massive benefits to the American (and world) economy that were created from an open internet that didn’t involve misplaced third party liability.
The concerns of those about this bill have nothing to do with intellectual property and whether it’s good or bad. It’s about the collateral damage that such a vast change to the legal and technical framework that the internet has been based on for years will cause.
To brush those concerns away as being “the anti-IP crowd,” is to show ignorance of what’s at stake.
What we don’t understand, Steve, is why you would seek to shut down the open internet, killing off more jobs than ever existed in the entertainment industry. We thought the US Chamber of Commerce was supposed to support small businesses. Instead, you’re seeking to make any internet business nearly impossible, unless they’ve already hired a dozen lawyers. I guess if your goal is for full employment for trial lawyers, you’re making headway. But, seriously, if you can’t debate this subject honestly, don’t be surprised when the next generation of businesses dumps the US CoC. Pro tip: pissing off every company of the next generation that might support your bloated organization is no way to build for the future. And don’t think jobs “in the industry” will be waiting for you. Without the next generation of great startups that you’re trying to kill off, the big content companies who pay your salary these days, won’t have the new platforms they need to succeed.
The Chamber of Commerce of course (a private organization, not to be confused — as some people do — with the government’s Commerce Department) is famous for its anti-fact position on IP laws, where it always believes greater protectionism is better, despite the evidence. Of course, when all of the evidence is against the Chamber of Commerce, it came out with its own laughable study that confuses correlation with a causal relationship, and bases its conclusions on lumping together various companies and assigning their success or failure entirely to intellectual property laws. It sounds like Tepp should fit right in, though it again highlights the revolving door between the folks who make the policies and those who lobby for the policies.