Paypal, Visa and MasterCard Discuss ‘Pirate Site’ Blacklist

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Supported by the French Government, several key players in the online payment industry are teaming up with copyright holders to ban infringing websites. The proposed agreement is a key part of the "follow the money" approach through which stakeholders hope to decrease online piracy.

pirate-cardFollowing the failed introduction of SOPA in the United States, movie studios and record labels are exploring alternative means to achieve the same goals.

The entertainment industries are lobbying the public and private sector to come to their aid. So far, this has resulted in Government supported voluntary agreements in both the United States and the United Kingdom.

It now appears that France intends to follow the same path. One of the key elements of the French approach is to strangle the revenues of pirate sites by making it harder to run ads and accept online payments.

Earlier this year Fleur Pellerin, France’s Minister of Culture and Communication, presented a paper outlining the Government’s plans. At the time, it was suggested that payments to and from pirate sites should be blocked where possible.

Yesterday several leading online payment processors including PayPal, Visa and MasterCard discussed a possible pirate blacklist agreement with copyright holders. Most services already prohibit copyright infringing services in their terms of use, but the new plan would go above and beyond current measures.

According to Minister Pellerin both parties are working on a voluntary agreement which would see copyright holders create and maintain a “pirate site” blacklist. The payment providers will then use this list to prevent sites from signing up or to terminate current accounts.

“The copyright holders will be able to report structurally infringing websites to payment processors, using their own skills and tools. In other words, the lists will be made by educated professionals and the actual blocking will follow soon after,” Pellerin said.

NEXT INpact notes that the new plan deviates from suggestions put forward in a previous report by the authorities which suggested that the blacklist would receive Government oversight.

Some opponents fear that without proper oversight the blacklist may become too broad. This could potentially destroy businesses which are not deemed illegal by any court.

This is not just a hypothetical threat.

Late last year U.S. Senator Leahy wrote a letter to Visa and MasterCard claiming Mega.co.nz and other file-hosting services have “no legitimate purpose or activity,” hoping they would cut their connections to the mentioned sites.

A few weeks later Mega was banned by PayPal, with the company subsequently reporting pressure from the credit card companies.

Whether the French blocklist will result in similar controversy will become apparent in the future.

It’s clear that payment processors have the power to severely limit the operation of sites that rely on user subscriptions. However, most torrent and streaming sites are unaffected. These sites generate most of their revenue from advertising and despite blocking initiatives in this industry, there are still plenty of advertisers who are happy to provide their services to these sites.

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