What would you say about a piece of legislation that allows a competitor
to cut off the revenue stream to its competition based upon an unproven
allegation?
 
What would you call a piece of legislation that destroys an alleged
offender’s business without allowing it to first confront its accuser in
a court of law?
 
What would you call a piece of legislation that allows major
corporations with teams of lawyers to intimidate and drive their small
competitors out of business due to a baseless claim or even an honest
mistake?
 
Unfortunately, House Judiciary Committee Chairman Lamar Smith (R-Texas) calls this legislation H.R. 3261.
 
Smith’s bill presumes that a website operator who is accused of using someone else’s intellectual property is guilty by immediately cutting off the advertising revenue stream for the site. The legislation coerces Internet advertising companies by holding them harmless in an intellectual property dispute if they cut off the accused’s ad revenues within five days of an allegation.
 
The allegation doesn’t have to be true, and it doesn’t have to have merit.
 
It just has to be made, and the ad revenue stream gets cut off out of a sense of preservation by the ad placement company.

Apparently, some big content providers are worried that mom-and-pop websites are putting a couple of lines with attribution from a story they ran, and Chairman Smith came riding to the rescue.
 
As Chairman Smith is well-aware, if infringing content is posted on a domestic website the copyright owner can swiftly have it removed via a notice-and-takedown procedure. So no one should be fooled that this legislation is anything more than an attempt by the powerful to stifle competition.
 
Even more outrageous is that Smith’s bill turns traditional American jurisprudence on its head as it finds the accused guilty until proven innocent.
 
A small startup website with limited power and revenue featuring ground-breaking technology can find itself throttled based on the automatic revenue cutoff due to a malicious complaint by a well-funded competitor. The only defense is to hire lawyers and attempt to get the federal courts to work rapidly while the company’s cash flow is destroyed.
 
Imagine the challenges a fledgling YouTube or Facebook would have faced if every time a user posted a song or article, their ad revenue streams were cut off due to allegations of intellectual property theft.
 
Unfortunately, Washington is awash in examples of the rich and powerful manipulating the system to enrich themselves. Armies of lobbyists justify their existence by winning their clients a tax break or law changes that enrich them. Whether a Solyndra grant or an entrepreneur-killing piece of legislation, crony capitalism is an ugly thing.
 
Let’s hope Chairman Smith and his colleagues in the House put a halt to the very type of political favoritism that cost them their majority in 2006. Sadly, it seems some people never learn.

 
Rick Manning (@rmanning957) is the communications director of Americans for Limited Government.