MasterCard willing to cut off pirate sites

MasterCard, is willing to stop processing transactions from sites trafficking in pirated music, movies, games, and other digital copyrighted content.

Lobbyists working for MasterCard have told trade groups from the entertainment sector that the credit card company is supportive of The Combating Online Infringement and Counterfeits Act, an antipiracy bill introduced into the Senate last September, sources with knowledge of the talks tell CNET.

Backed by Sen. Patrick Leahy (D-Vt.), chairman of the Senate Judiciary Committee, and committee member Sen. Orin Hatch (R-Utah), the bill would authorize the Department of Justice to shut down domain names of U.S.-based Web sites judged to be dealing in pirated content and also have the power to order Internet service providers, payment processors, and online ad networks in the United States to cease doing business with overseas pirates sites. Opponents of the law say it will give the government sweeping powers to censor U.S. citizens.

Representatives from MasterCard, Visa, and American Express did not respond to interview requests.

When asked for a comment about the ongoing talks between MasterCard and the entertainment sector, the music industry's trade group, the Recording Industry Association of America, issued a statement from Mitch Glazier, executive vice president of government and industry relations.

"MasterCard in particular deserves credit for its proactive approach to addressing rogue Web sites that dupe consumers," Glazier said. "They have reached out to us and others in the entertainment community to forge what we think will be a productive and effective partnership."

The antipiracy strategy of large Hollywood studios and music labels is evolving and is now less about filing lawsuits against site operators and individual file sharers. Big media companies now seem intent on cutting off sources of income for illegal file-sharing and streaming sites. Many of these operations make money by posting ads from U.S. ad networks, including Google. They also charge for "premium services" such as larger storage capacity.

One of the sites the entertainment industry says offers access to unauthorized copies of films is Megaupload. To obtain a membership to the site, one can pay with PayPal, Visa, MasterCard, or American Express. There are certainly other ways for sites to accept payment than these and the entertainment industry knows this. They also know that many people are still leery of online transactions, even with stalwart payment methods.

The goal of the entertainment sector is to discourage as many people as possible from doing business with pirate sites.

To that end, the MPAA, RIAA, and other trade groups have pressured payment services, ad networks, and ISPs to do more piracy fighting. For some of these companies, Leahy's bill seems to have helped spur people into action.

Two weeks ago, Google announced it would improve antipiracy efforts, including a promise to do more to keep Web sites that provide infringing materials out of AdSense, the company's advertising program that pays Web sites for hosting ads.

In addition, the Interactive Advertising Bureau, the trade group representing 470 members that account for more than 86 percent of U.S. online advertising, says it also wants to work with the entertainment industry and lawmakers on cutting off pirates.

But according to Mike Zaneis, the IAB's general counsel, the group wants to find a way to thwart "rogue sites" without harming the ad business. He said one thing that all the parties must understand is that serving ads online is complicated and that often a company serving ads has no idea where the ad will end up.

"There's a commitment here to work with the content community and senators Hatch and Leahy," Zaneis said. "We want to find the best option and do what everybody wants, which is to cut off funding to the rogue sites."