There were different but similar copyright bills in the 112th United States Congress: The Stop Online Piracy Act (SOPA) in the House of Representatives and the PROTECT IP Act (PIPA) in the Senate. A typical route for legislation like this is to pass some version in both houses (so called companion bills), then refer the two bills to a conference committee, which would produce a single bill likely to pass both houses.
These bills were motivated by concerns of copyright holders that their copyright protection in being undermined by the illegal dissemination of copyrighted information via the Internet. Opponents of the proposed legislation say that the proposed remedies are far worse than the problem they are intended to solve.
Economic impact of SOPA / PIPA
Negative impact on web hosting services
Journalist Rebecca MacKinnon argued that making companies liable for users' actions could have a chilling effect on user-generated sites like YouTube. "The intention is not the same as China’s Great Firewall, a nationwide system of Web censorship, but the practical effect could be similar". The Electronic Frontier Foundation (EFF) has warned that Etsy, Flickr and Vimeo all seem likely to shut down if the bill becomes law. According to critics, the bill would ban linking to sites deemed offending, even in search results and on services such as Twitter. Many cloud computing and Web hosting services may leave the US to avoid lawsuits.
The Motion Picture Association of America claimed the act's effect on business would be slight, noting that at least 16 countries block websites, and the internet still functions in those countries. Denmark, Finland and Italy blocked The Pirate Bay after courts ruled in favor of music and film industry litigation, and a coalition of film and record companies has threatened to sue British Telecom if it does not follow suit.
General threat to web-related businesses
A news analysis in the information technology magazine eWeek stated, "The language of SOPA is so broad, the rules so unconnected to the reality of Internet technology and the penalties so disconnected from the alleged crimes that this bill could effectively kill e-commerce or even normal Internet use. The bill also has grave implications for existing U.S., foreign and international laws and is sure to spend decades in court challenges." It was similarly claimed that, "any US consumer who uses a website overseas immediately gives the US jurisdiction the power to potentially take action against it."
On October 28, 2011, the EFF called the bill a "massive piece of job-killing Internet regulation," and said, "This bill cannot be fixed; it must be killed."
Gary Shapiro, CEO of the Consumer Electronics Association, stated that "The bill attempts a radical restructuring of the laws governing the Internet," and that "It would undo the legal safe harbors that have allowed a world-leading Internet industry to flourish over the last decade. It would expose legitimate American businesses and innovators to broad and open-ended liability. The result will be more lawsuits, decreased venture capital investment, and fewer new jobs." A similar claim was made by CrowdFlower.
Strategy& (Formerly Booz & Company) on November 16 released a study, funded by Google, finding that almost all of the 200 venture capitalists and angel investors interviewed would stop funding digital media intermediaries if the House bill becomes law. More than 80 percent said they would rather invest in a risky, weak economy with the current laws than a strong economy with the proposed law in effect. If legal ambiguities were removed and good faith provisions in place, investing would increase by nearly 115 percent.
Civil liberties issues with SOPA / PIPA
There were concerns that the bills were too vague and could be used for prior censorship. If WikiLeaks were accused of distributing copyrighted content, U.S. search engines could be served a court order to block search results pointing to WikiLeaks. Requiring search engines to remove links to an entire website altogether due to an infringing page would raise free speech concerns regarding lawful content hosted elsewhere on the site. proxy servers, such as those used during the Arab Spring, can also be used to thwart copyright enforcement and therefore may be made illegal by the act.