Sometimes rogue sites actually sell counterfeits directly to consumers using a major credit card. Sometimes they give away the movies or music and sell advertising—often advertising for well-known consumer brands served by one of the major adserving companies. And all of the rogue sites benefit from search engines that indiscriminately drive traffic to their sites. Sometimes the search engine owns the adserving company it drives traffic to.
Harm from parasitic innovation is often funded by legitimate advertisers who don’t even know their ads are being served to support rogue sites—in violation of the advertisers’ own contracts with adserving companies; contracts that are designed to protect the advertisers’ brand.
After the Senate Judiciary Committee’s hearing and vote on the Combating Online Infringements and Counterfeits Act in the last Congress, and subsequent hearings in the House and Senate early this year, many companies have come together voluntarily to make realistic strides to fight parasitic innovation online.
Unfortunately, the major player in online advertising has been largely absent. In fact, Google even declined a request to testify at Chairman Leahy’s Senate Judiciary Committee hearing a few weeks ago. Now, there is discussion of issuing a subpoena requiring a Google representative to appear.
For a company like Google, which enjoys all the benefits of being a US corporation—including the public financial markets--to simply not show up is a headscratcher, if not a show of contempt.
So far, Google’s response to parasitic innovation has been rather coy. The reality is rather simple: No publicly-traded U.S. company should serve advertising to rogue sites and pay a share of that revenue to rogue site operators. Sites trafficking in goods that harm public health and steal jobs should not be included in search results by legitimate companies.
Advertisers should be told where their ads appear and be given a veto over the use of their brands to create a false veneer of legitimacy on rogue sites.
Reportedly, Google will testify before Chairman Goodlatte and the House Subcommittee on Intellectual Property, Competition and the Internet on April 6. If they do, they hopefully will announce innovative business practices to decisively protect American jobs and Americans from rogue sites. It not, it may be time for Congress to do it for them.
In the first hearing that Chairman Goodlatte held on the issue of rogue sites, the legislators expressed a willingness to follow the money funding parasitic innovation. Hopefully they will also be willing to stop the money. When they do, we will know Congress means business.
Chris Castle is Managing Partner of Christian L. Castle, Attorneys in Los Angeles and San Francisco. He works with artists, independent record companies and technology companies and is a consultant to Arts+Labs.