MasterCard’s Support for COICA Threatens A Free And Open Internet

In the last months of 2010, the WikiLeaks wars reminded transparency activists of something copyright and trademark lawyers know all too well – online speech is only as strong as the many service providers on which it depends. All too often web hosts, domain name registrars and other service providers cave at the slightest legal or government pressure, with disastrous consequences for their users.

We had hoped that credit card and other financial services would resist efforts to pressure them to stop processing payments to controversial websites. So we were dismayed to hear that not only does MasterCard support the passage of the Internet Censorship and Copyright Bill (“COICA“), but that it also appears to be signaling a willingness to voluntarily stop processing payments made to sites that allegedly offer “pirated” or other copyrighted content. Keep in mind that courts have ruled that credit card companies do not face liability for potentially infringing activities on site for which they merely process payments.

Of course, if COICA becomes law, the Justice Department would have the power to order MasterCard to stop processing payments to certain sites. That’s one reason we are worried about the effects of COICA: it offers a new process for shutting down websites deemed “bad sites” without appropriate safeguards to prevent the takedown of noninfringing content, including political and other speech. In effect, it enlists service providers as censors, necessarily hampering Internet commerce and innovation.

Any decision by Mastercard to stop processing payment voluntarily would be even more troubling. As the New York Times recently wrote in an editorial:

[A] bank’s ability to block payments to a legal entity raises a troubling prospect. A handful of big banks could potentially bar any organization they disliked from the payments system, essentially cutting them off from the world economy.

For example, MasterCard might decide to stop processing payments to popular hosting sites such as RapidShare, even though at least one court has ruled that RapidShare likely is not guilty of infringement. Given the importance of a consistent revenue streams to emerging companies, blocking payments might effectively mean putting them out of business.

The Internet only remains open, accessible and vibrant when the entire chain of providers operates together: financial transaction providers, service providers, hosting providers, content providers, and all of the other companies that keep sites online and accessible. We encourage MasterCard – along with all others who help provide availability and access on the Internet – to reverse course and choose to promote a thriving Internet by refusing to serve as private censors and standing up against COICA.

This article was written by Julie Samuels, and was first published on Electronic Frontier Foundation.

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