Chokepoints: Global Private Regulation on the Internet

Chokepoints

Chokepoints

Global Private Regulation on the Internet

Natasha Tusikov

UNIVERSITY OF CALIFORNIA PRESS

University of California Press, one of the most distinguished university presses in the United States, enriches lives around the world by advancing scholarship in the humanities, social sciences, and natural sciences. Its activities are supported by the UC Press Foundation and by philanthropic contributions from individuals and institutions. For more information, visit www.ucpress.edu.

University of California Press

Oakland, California

© 2017 by The Regents of the University of California

Library of Congress Cataloging-in-Publication Data

Names: Tusikov, Natasha, 1974- author.

Title: Chokepoints : global private regulation on the Internet / Natasha Tusikov.

Description: Oakland, California : University of California Press, [2016] | Includes bibliographical references and index.

Identifiers: LCCN 2016023978| ISBN 9780520291218 (cloth : alk. paper) | ISBN 9780520291225 (pbk. : alk. paper) | eISBN 978-0-520-96503-4 (eBooks)

Subjects: LCSH: Internet governance. | Intellectual property. | Privacy, Right of. | Data protection—Law and legislation. | Piracy (Copyright)—Prevention. | Internet—Censorship. | Internet service providers.

Classification: LCC TK5105.8854 .T877 2016 | DDC 384.3/3—dc23

LC record available at https://lccn.loc.gov/2016023978

Manufactured in the United States of America

25  24  23  22  21  20  19  18  17  16

10  9  8  7  6  5  4  3  2  1

Contents

List of Tables

Preface

Acknowledgments

Abbreviations

1. Secret Handshake Deals

2. Internet Firms Become Global Regulators

3. Revenue Chokepoints

4. Access Chokepoints

5. Marketplace Chokepoints

6. Changing the Enforcement Paradigm

7. A Future for Digital Rights

Notes

References

Index

Tables

1. Macrointermediaries’ Enforcement Capabilities

2. U.S. Agreements

3. U.K. Agreements

4. European Agreement

5. Eight Nonbinding Enforcement Agreements

6. Processing Payments Online

7. Payment Account Termination

8. Comparison of Codes of Conduct for Search Intermediaries

9. Proposed and Actual Rules for Search Intermediaries

10. Domain Intermediaries’ Enforcement Measures

11. Key Provisions in European Commission’s Agreement

12. Transparency and Nonbinding Agreements

Preface

During my research for this book, in early June 2013, Internet surveillance made headlines globally. Edward Snowden, a security contractor for the prominent U.S. defense contractor Booz Allen Hamilton, leaked highly classified files that revealed global surveillance programs operated by the U.S. National Security Agency and its allies. The Snowden files, as they are known, reveal—among other things—how the NSA’s surveillance programs tapped into the U.S. telecommunications network, including the operations of Verizon, Sprint, and AT&T, to track and record phone communications.

Several NSA programs, with the colorful code names of Prism and Muscular, focused on obtaining information from popular U.S.-based Internet companies, particularly Google, Microsoft, and Yahoo. The NSA and its allies, particularly the United Kingdom, targeted these companies because they collect vast amounts of data from everyone who uses their services. The NSA obtained information from these services through secret court orders served to Internet firms from a previously little-known U.S. court—the Foreign Intelligence Surveillance Court—and by covertly hacking into Internet firms’ systems (Greenwald 2014). Media coverage of the Snowden files sparked heated public debates around the world regarding government and corporate surveillance and the nature and limits of digital privacy.

NSA-style total surveillance is becoming ubiquitous in the modern world, and not just in national-security circles. Surveillance is the business model of the Internet, argues leading security analyst Bruce Schneier (Schneier 2013). Former U.S. vice president Al Gore critiqued the intensity of online surveillance in 2013, characterizing the Internet as a stalker economy where customers become products (Levine 2014). Given Gore’s past extensive involvement in Internet policy making and his vocal support for Internet issues, his criticism is potent.

Internet companies like Google, Microsoft, and Yahoo, along with Facebook and Twitter, provide services that are premised upon the collection and sharing of personal information and upon their users cultivating ever-expanding social and professional networks. These firms provide free search, email, chat and messaging, and social networking services in exchange for amassing, tracking, and monetizing users’ data. These troves of personal information are valuable not only to advertisers but also to state security agencies. By siphoning information from these firms, security agencies can track users’ digital footprints, including website browsing history, their personal social networks, and location data, as well as the actual content of emails, video calls, and text messages.

The Snowden files expose enmeshed, interdependent relationships between major U.S.-based Internet firms and the U.S. government. Some scholars term this dynamic an information-industrial complex (Powers and Jablonski 2015, 47). Internet firms with large, global operations, such as Google, PayPal, eBay, and Yahoo, have developed a considerable capacity to make and enforce rules for their services that can affect hundreds of millions of their users worldwide. The information-industrial complex is partly characterized by mutual interests in extending policies and standards that preference U.S. economic interests and further the country’s national security programs over the Internet through U.S. companies’ provision of information and communications technologies (Powers and Jablonski 2015). The U.S. government is interested in expanding its surveillance apparatus at the global level to maintain U.S. economic and military hegemony. In turn, large U.S. Internet companies like Google and Microsoft are interested in allying themselves with the U.S. government to further expand and entrench their businesses practices globally.

This book focuses on a parallel but largely unknown dimension of the information-industrial complex. It traces a series of secretly negotiated, handshake deals among small groups of elite corporate actors and government officials in the United States and Europe to counter, not terrorism, but the illicit online trade in counterfeit goods, from clothing and electronics to pharmaceuticals. Although the targets of the surveillance programs revealed by the Snowden files and these anticounterfeiting agreements obviously differ, the programs share several important commonalities in terms of actors involved and, most importantly, the methods they undertake to achieve their objectives. Several of the central actors discussed in the Snowden files—Google, Microsoft, Yahoo, the U.S. government, and the U.K. government—are also key figures in the anticounterfeiting agreements. States and, increasingly, powerful corporations are turning to Internet companies that provide essential services to monitor online behavior and global flows of information. By regulating Google, the idea goes, one can regulate the Internet (Kohl 2013, 233). The agreements primarily benefit prominent, multinational intellectual-property owners like Nike, the pharmaceutical firm Pfizer, and the consumer care company Proctor & Gamble.

State-endorsed corporate mass surveillance on the Internet is a principal element of the anticounterfeiting agreements. As part of their duties under the informal agreements, Internet companies monitor how people use and interact with payment and advertising platforms, search engines, and marketplaces, in order to detect suspicious activities. These companies control and block flows of information and also disable websites selling counterfeit goods by withdrawing important commercial and technical services. The impetus for Internet companies’ expansive efforts as gatekeepers is coercive pressure from the U.S. and U.K. governments, which is fundamentally changing the companies’ regulatory responsibilities and the ways they identify and target problematic behavior.

Consequently, these anticounterfeiting processes, agreements, and methods are important not only in and of themselves but also for what they reveal about the nature of the emerging surveillance society and surveillance state. Who regulates the Internet, and how, are vitally important questions given its centrality to economic, social, and political life. Major Internet firms play principal roles in regulating flows of information on the Internet. They have considerable authority to decide what information people can access, use, and share, what items they can purchase and how, and the personal information users must divulge to Internet firms. Further, these companies also have significant discretion to determine the legality of certain types of content, such as the kinds of images that constitute child pornography or copyright infringement. These regulatory practices, however, have the potential to create surveillance dragnets that target and track millions of law-abiding Internet users. And, since Internet firms’ enforcement occurs outside of legislation or court orders, the firms are essentially unaccountable, and their efforts are largely opaque and prone to error.

My aim in this book is not to analyze the illicit market in counterfeit goods, or to evaluate the effectiveness of corporate regulatory strategies against the online trade in counterfeit goods. Rather, it is to critically trace the creation and operation of a transnational private surveillance and enforcement program that operates largely outside of legislation to control the online market in counterfeit goods. In doing so, the book provides the first scholarly analysis of the little-known enforcement agreements quietly negotiated among small groups of industry and state actors to address the distribution of counterfeit goods on the Internet.

More broadly, the book explores the complex, shifting dynamics between corporate actors and states in relation to setting rules online to control information flows and monitor users’ behavior. It asks: What can the anticounterfeiting agreements tell us in general about how corporate and state actors can set and enforce rules and standards on the Internet? In what ways can informal rules govern the way we access and use services, technologies, and applications on the Internet, and in what ways can these rules control global flows of information? Further, what are the consequences for how we understand and use the Internet? In answering these questions, the book argues that powerful states, particularly the United States, play a direct, often coercive role in shaping corporate regulatory efforts on the Internet to serve their strategic interests.

Acknowledgments

I benefited from the generosity and insight of many while working on this project. Thanks must first go to Peter Drahos, Peter Grabosky, and Kathryn Henne at the Australian Nation University for their thoughtful, critical questions and for encouraging me to look at the big picture. Ian Brown at the Oxford Internet Institute at the University of Oxford and James Sheptycki at York University generously gave detailed feedback that strengthened the book’s analysis and conclusions. Thanks to the anonymous reviewer of this book, and to Roger Brownsword and an anonymous reviewer who evaluated the manuscript proposal, for their useful critiques that strengthened the book. My sincere gratitude goes to Susan Sell for her generous review of the book. I also thank Sara Bannerman, Mamoun Alazab, and Erin Tolley for their valuable critiques and encouraging words during the final manuscript preparation.

The collegial intellectual environment at the RegNet School of Regulation and Global Governance at the Australian National University was an ideal environment in which to undertake the research that became that basis of this book. I enjoyed discussing regulatory theory during RegNet’s lovely teas, seminars, and writing groups with John Braithwaite, Val Braithwaite, Kyla Tienhaara, Cynthia Banham, Benjamin Authers, Emma Larking, Russell Brewer, Robyn Holder, Cheryl White, Budi Hernawan, Lennon Chang, Christian Downie, Sekti Widihartanto, and Jeroen van der Heijden. This book is better because of all you.

Thanks to those at the Center for Criminology at the University of Oxford, particularly Ian Loader, for hosting me as a visiting scholar. I spent many wonderful hours in the beautiful Bodleian Library and Radcliffe Camera. The Baldy Center of Law and Social Policy at the State University of New York (SUNY) in Buffalo provided an ideal space in which to finish this book. Thanks to Errol Meidinger at the Baldy Center and members of the SUNY Buffalo Law School for offering constructive feedback on my ideas. Earlier versions of these chapters profited from presentations at McMaster University and Brock University, as well as from conference papers delivered to the International Studies Association and Law and Society Association conferences in Honolulu, Seattle, and New Orleans, as well as the American Society of Criminology conference in Washington, D.C.

Thanks to all the people I interviewed who took the time to share their knowledge and experience with me. I deeply appreciate the kindness you showed me in explaining the fast-moving world of intellectual property regulation on the Internet. I am very appreciative of Maura Roessner and Jack Young at the University of California Press, who ably shepherded me through the publishing process.

To my uncles—Vit and Valdi—for providing a beachside retreat in Mollymook with wine and oysters on the stunning New South Wales coast, my sincere gratitude. Thanks to my parents, Peter and Barbara Tusikov, and my sister, Katrina, for patiently listening to discussions of transnational private regulation and counterfeit goods. I transcribed many of the interviews in the lovely B.C. Okanagan Valley and afterward sampled the local wineries. I also thank Bailey and Charles Murray, lifelong friends, and new friends Tira and Sigmund. Finally, and most importantly, my deep thanks to my partner, Blayne Haggart, for all your support. Your encouragement helped me through the roadblocks and made this book better.

Abbreviations

1

Secret Handshake Deals

January 18, 2012, has become famous in certain circles as the date of the Internet blackout, the climax of the world’s largest, most dramatic, and—arguably—most effective online protest to date. On January 18, web giants including Google, Wikipedia, Reddit, Tumblr, and Mozilla blacked out some or all of their web pages, as did thousands of smaller websites.

Over the course of several months leading up to that date, a transnational coalition of academics, technologists, civil-society activists, Internet users, and Internet companies came together to oppose Internet censorship and Draconian rules that they said would impede the functioning of the Internet. The protest focused on two intellectual property bills in the United States: the Stop Online Piracy Act (SOPA) in the U.S. House of Representatives and its sister bill in the U.S. Senate, the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, or Protect Intellectual Property Act (PIPA). These bills targeted websites (or sites) globally accused of violating U.S. intellectual property laws, which govern the production and use of creative works like movies and music, as well as the commercial manufacture of goods. Such sites offer unauthorized downloads of copyrighted content, particularly movies music, games, or software, or sell counterfeit goods, which are unauthorized reproductions of trademarked products like those bearing the famous Nike swoosh.

Protesters had reason to be concerned. SOPA and PIPA would have fundamentally altered online efforts to enforce intellectual property rights. The bills proposed requiring Internet intermediaries, which provide or facilitate Internet services, to police intellectual property rights. These intermediaries would be required to act as regulators with the goal of preventing the distribution of counterfeit or copyright-infringing goods on their platforms. Under the proposed bills, rights holders of intellectual property, like the sporting goods firm Nike, could seek court orders to require online payment providers, such as PayPal and Visa, and digital advertising firms like Google and Yahoo, to target sites distributing copyright-infringing content or counterfeit goods. These Internet firms would have been required to withdraw their services from targeted sites for the purpose of disrupting the sites’ operations.

Critics of the bills argued—and not without reason—that they would extend punitive U.S.-style enforcement strategies globally. Under the bills, U.S.-based rights holders could have singled out sites worldwide that they claimed violated their intellectual property rights. Censorship was also a central concern. The bills could have endangered free expression on the Internet if actors inadvertently—or, more worryingly, deliberately—targeted legally operating sites and stifled legitimate speech. Moreover, critics claimed the bills could potentially damage Internet infrastructure through the types of technical enforcement measures proposed. SOPA and PIPA were explicitly designed to favor rights holders, particularly large institutional copyright owners in the movie and music industries, and multinational companies like Nike and Pfizer, at the expense of Internet firms that provide essential online services. Largely absent from SOPA and PIPA was any consideration of Internet users who rely upon the Internet to participate fully in economic, social, and cultural life. In articulating their concerns, SOPA protesters tapped into wider societal anxiety over state and corporate actors’ power to determine what kinds of content we can access, share, and use, what we can buy and where, and how we can use Internet services, technologies, and platforms.

Until the Internet blackout, intellectual property was not thought of as a subject that triggered widespread public protests or generated heated debate in the mainstream media. In fact, it was generally considered to be an arcane, commercial matter of interest only to large corporations and lawyers (Haggart 2014). The groundbreaking protest against SOPA and PIPA changed that and transformed intellectual property into a topic of popular conversation. At the zenith of the protest, on January 18, over a hundred thousand web pages went dark in protest and 10 million people signed petitions against the bills. So many people attempted to contact their elected representatives in the United States that the surge in traffic temporarily took down some U.S. senators’ web pages (McCullagh 2012). Representative Darrell Issa, a Republican from California and a staunch opponent of the bills, described the protest as an Internet mutiny (Franzen 2012). Faced with an unprecedented public outcry over intellectual property bills, the U.S. Congress backed down and withdrew the bills on January 20, 2012. The protest was the first major political defeat for U.S. intellectual property proponents in over thirty years, a monumental achievement of Internet activism, particularly given the strong bipartisan support for the issue in the United States (Sell 2013). Opponents celebrated as the anti-Internet policies appeared dead, at least until the next attempt at legislation.

FROM CONTROVERSIAL BILLS TO HANDSHAKE DEALS

The anti-SOPA uprising and surprising defeat of SOPA and PIPA have been widely reported in academic and mainstream sources. Without doubt they will be the subjects of important studies of online activism and transnational social movements for years to come. What is less well known, however, is that the Internet blackout failed to kill the provisions contained with SOPA and PIPA. While protesters were campaigning against these bills, a small group of U.S. policy makers, rights holders supportive of SOPA and PIPA, and their trade associations were active behind the scenes. In closed-door meetings, they quietly drafted a series of informal, non-legally binding handshake agreements with Internet firms and online payment providers that incorporate some of SOPA’s toughest and most controversial provisions, which were opposed by tens of millions of people in the United States and around the world.

The United States is not alone in creating non-legally binding agreements to regulate intellectual property on the Internet. The United States and the United Kingdom are the epicenters of these nonbinding agreements, as each has multiple agreements. Officials from the European Commission also crafted their own agreement. As happened in the United States, small groups of multinational corporations and officials from the U.K. government and European Commission conducted negotiations outside democratic, legislative processes, between 2010 and 2013.

Government policy makers describe these nonbinding agreements as voluntary, industry-led initiatives (Espinel 2013). Industry participants refer to them as best practices. As these best practices are identified and determined by industry, however, they do not represent objectively evaluated measures. Negotiations occurred in closed-door meetings with little participation from consumer or civil-society groups, despite the fact that the agreements broadly affect how people can use popular—and indeed, essential—Internet services. Signatories are major U.S.-based Internet companies and payment providers with global operations: PayPal, Visa, and MasterCard, along with Google, Yahoo, Microsoft, and eBay.

One of the agreements’ key targets is websites and marketplaces aimed at consumers in the United States and Europe but located elsewhere, especially China. For rights holders, China is of particular concern because it is the primary manufacturer of counterfeit goods that are exported to North America and Europe. Rights holders are also concerned with counterfeit goods sold through the China-based Taobao marketplace, which is the equivalent to eBay in China. U.S. and European rights holders not only want to combat the manufacture of counterfeit goods in China, but they also want to expand sales of legitimate versions of their brands in China’s burgeoning e-shopping environment, particularly through key venues like Taobao.

At their core, the informal agreements are intended to push large Internet intermediaries to go beyond what they are required to do by law in the protection of intellectual property rights. Advocates of this position, including the European Commission, approvingly refer to it as a beyond-compliance regulatory strategy (European Commission 2013, 5–6).

The puzzle at the heart of this book is why powerful, globally dominant Internet firms and payment providers adopted non-legally binding agreements to police the online market in copyright-infringing and counterfeit goods on behalf of rights holders. At first glance, this type of regulation does not appear to be in intermediaries’ material interests. Further, why did these intermediaries agree voluntarily to go beyond what they are required to do by law? The answer is governmental pressure. Despite government officials’ use of the terms voluntary and industry-led initiatives, the agreements are neither voluntary nor wholly private. State actors—the U.S. and U.K. governments, along with the European Commission¹—threatened the intermediaries with legislation and legal action to compel the companies to adopt non-legally binding enforcement measures. These state actors did so in response to lobbying from prominent rights holders keen to expand the online enforcement of their intellectual property rights.

State pressure was necessary to encourage—and compel—intermediaries to exceed their legal responsibilities. This is because, while the intermediaries did not entirely oppose increased enforcement of intellectual property rights, they did not consider this problem to be primarily their responsibility. In addition, the intermediaries largely resisted rights holders’ efforts to revamp their enforcement efforts. Intermediaries’ adoption of the nonbinding agreements lessened their risk of being subject to legislation or legal action. However, intermediaries also had another motivation. State actors and intermediaries have some overlapping interests in exerting greater control on the Internet. Intermediaries want not only to expand their markets but also to influence state standard-setting in relation to issues important to them, such as data collection and storage policies and rules regarding privacy of users’ personal information.

More broadly, this book explores the growing practice of states designating powerful corporate actors as global regulators to set and enforce rules on the Internet. This regulation increasingly occurs in the absence of any meaningful public or judicial oversight, through non-legally binding arrangements. Such practices raise critical questions of fairness, due process, legitimacy, and the degree to which relying upon private-sector actors to deliver public-policy objectives is good for democracy. Core questions guiding my argument in this book are: what effects may informal corporate regulation have on how we access and use Internet services, applications, and technologies; and what are the associated problems?

New Global Regulators

A valuable and intriguing lens through which to examine the growing practice of informal regulatory practices carried out by corporate actors on the Internet is the regulation of intellectual property. Regulation in this context refers to the practice of nonstate organizations, including private companies and nongovernmental associations, setting and enforcing rules, standards, and policies that guide the provision of important Internet services, such as search or payment processing. The online regulation of intellectual property is an important case study because it is a key area of Internet governance, since it involves setting rules that govern the global flow of information and goods.

In terms of intellectual property, the two main areas I study are copyright law and trademark law. Copyright law lays out rules that determine how knowledge, and creative and artistic works like music, films, and books can be accessed, used, and shared, by whom, and with what technologies. Trademark law determines the entities that can lawfully manufacture, distribute, advertise, and sell trademarked products. Counterfeit goods are a form of trademark infringement. On the Internet, regulating trademarks entails making rules that determine how and on what platforms goods are sold, by whom, and in what ways, and how goods can be advertised. Rules governing intellectual property fundamentally affect what content people can access, and how they can access this content and exchange goods and services online.

Responsibility for policing those rules is increasingly falling upon Internet intermediaries that act, sometimes reluctantly, as gatekeepers on behalf of rights holders. Intermediaries are typically for-profit entities that provide important commercial and technical services that enable the effective functioning of the Internet. Some intermediaries, such as search engines or web hosts, facilitate access to or the hosting of information on the Internet. Others, such as social media platforms like Facebook and Twitter, or payment providers like PayPal, enable transactions or interactions among Internet users. Internet intermediaries vary widely in size, scope, and market share. Some intermediaries provide services across multiple sectors. Google, Yahoo, and Microsoft, for example, all operate search engines and digital advertising platforms. Certain intermediaries, such as Visa, MasterCard, and PayPal, can be used in both real-world and online environments. Other intermediaries, like domain registrars, exist solely online.

Large intermediaries like Google, eBay, and PayPal can be thought of as macrointermediaries owing to their global platforms, significant market share, and sophisticated enforcement capacities that protect their systems and users from wrongdoing like fraud or spam.² Macrointermediaries can set rules that govern hundreds of millions of people who use their services. They are in a powerful position to shape the provision of essential Internet services, such as search and payment processing, by virtue of their ability to monitor their platforms, remove unwanted content, and block suspicious transactions and behavior. Given their regulatory capacity, cooperative macrointermediaries can allow rights holders to police mass populations globally in ways that were previously unattainable, technologically unfeasible, or prohibitively expensive.

Why do rights holders want to work with macrointermediaries? These Internet firms act as chokepoints with the capacity to exert significant control over the access to and use of essential online sectors, including payment, advertising, search, marketplaces, and domain name services that enable users to access websites. People commonly—but mistakenly—understand the Internet to be a relatively ungoverned space, a Wild West of loosely connected networks that extend globally. Contributing to this perception are frequent claims by various governments and law enforcement agencies that they struggle to enforce laws on the Internet and are relatively powerless to reach outside their legal jurisdictions to target bad actors. Despite this Wild West stereotype, in many ways the Internet is a highly controlled environment. By withdrawing their services, macrointermediaries can disable sites’ capacity to process payments, thereby choking sites’ revenue streams. These intermediaries can also impede users’ ability to locate and access counterfeit goods by controlling search and domain services and restricting the operation of marketplaces, thus creating access barriers. In essence, intermediaries use revenue and access chokepoints to deter unwanted behavior and target inappropriate content.

Given macrointermediaries’ market dominance and global reach, they have a significant capacity to set rules governing hundreds of millions of people and determining how global flows of information are handled. Further, as these macrointermediaries police and sanction their users, remove certain types of content from their platforms, or withdraw their services from particular sites, they are shaping public policies in areas as diverse as privacy, data collection and retention, intermediary liability, intellectual property rights, and freedom of expression. As a result, through their roles as regulators, intermediaries are becoming de facto policy makers on an array of complex social issues, including obscenity, intellectual property rights, promotion of terrorism, and child pornography (DeNardis 2014). Internet firms’ work as regulators or policy makers, however, may not be readily apparent to or fully understood by the general public. Internet users may not realize how intermediaries have changed rules relating to their services until users are unable to access certain information or use particular features. Intermediaries’ global reach and sophisticated enforcement practices make them a valuable enforcement partner for rights holders and for states, as the Snowden files show in regard to the NSA’s surveillance programs that siphon information from Google, Yahoo, and Microsoft.

Uncovering the Informal Agreements

This book is the first to map the creation and operation of nonbinding enforcement agreements as they pertain to the online control of counterfeit goods. Informal agreements provide an ideal regulatory solution for actors who favor increased protection for intellectual property rights online. As is discussed in chapter 2, non-legally binding measures enforced by intermediaries enable rights holders and government officials to sidestep failed bills in the United States, stalled legislation in the United Kingdom, and a series of lawsuits between intermediaries and rights holders in the United States and Europe. Away from the public eye, small groups of government and corporate actors had the freedom to negotiate enforcement measures that significantly expanded intermediaries’ responsibilities for policing the online trade in counterfeit and copyright-infringing goods. The goal of the nonbinding agreements is compliance-plus enforcement, in which intermediaries exceed their legal responsibilities and undertake regulatory duties in the absence of legislation or court orders.

In this book I discuss eight informal agreements struck among Internet firms, government officials, and rights holders and their trade associations in the United States and the European Union. The agreements lay out broadly worded general principles to guide Internet firms’ regulation of websites that distribute counterfeit goods and copyright-infringing content. Within these agreements, intermediaries participate from five Internet sectors: payment providers (e.g., PayPal); search and advertising intermediaries (e.g., Google); marketplaces (e.g., eBay); and domain name registrars (e.g., GoDaddy), which register domain names, the unique names given to sites, such as www.wikipedia.org. Each of these intermediaries acts as a revenue or access chokepoint, which is why rights holders pushed them to adopt the informal agreements. By partnering with the intermediaries, rights holders are able to strengthen their online enforcement of their intellectual property rights.

REGULATING INTELLECTUAL PROPERTY

My goal in this book is to illuminate often-opaque interdependencies between corporate-state regulatory practices on the Internet and the little-known practice of governing through chokepoints. Consequently, it is vital to appraise how these corporate-state regulatory efforts may affect the way we use Internet services and technologies and, more broadly, the online environment as a whole. To understand why prominent industry actors and government officials are devoting significant attention to the illicit trade in counterfeit goods and copyright-infringing content, it is important to first appreciate what intellectual property rights are, as well as why certain companies and governments are keen to strengthen the online protection of copyrights and trademarks.

Intellectual property is an issue of significant economic and political importance. In the modern globalized economy, ownership of intellectual property rights is central to economic dominance. Economic benefits from intellectual property primarily flow to those who own these rights. Individuals and corporations in industrialized countries, particularly the United States but also countries in Europe, own the greatest proportion of intellectual property rights.³ In the case of trademarks, this means that rights holders in the United States and Europe receive considerable revenue from the manufacture of products, even though the production of those goods increasingly