Not Safe for Entrepreneurs: Is the Federal Government Scaring Away Startups?

I know I said on Fridays I would post, but I was literally singing one song too much to calm down and write.  (What song, you ask?  Well…let’s just say if I linked it here you guys would be too busy singing along for the rest of the day to read the rest of this post!  Or do anything else, for that matter…)  Anyway, I’m writing this at 2:15 am on a Saturday because it’s that important, even though I feel like a bit of a zombie right now.  Speaking of zombies, apparently SOPA is risen from the dead in the US.  We all knew they would try again, but to have the audacity to not even take a break from the bill and slip it into what feels like Congress’ very next order of business?  Kind of ridiculous, when you think of it.  I mean, didn’t our outrage count for anything?

That’s a topic for another post, however; we have something far more ominous to discuss.  As it turns out, the government might not even need the Stop Online Piracy Act to achieve the chilling effects on free speech on the internet that the legislation would have had.  Earlier this week, a popular web utility known as JotForm was effectively shut down by Washington, its domain having been seized by the Secret Service.  Wait just a minute here…this is no small-scale or obscure piracy site streaming live sporting events for free; this is a business that has more than 700,000 users, according to TheNextWeb.  Service has since been restored, but the seizure effectively caused JotForm to go out of business for a couple of days, causing a loss of revenue that’s not yet known.

With Bureaucrats Like These, Who Needs Congress?

This isn’t even the first time that a government agency has shut down a legitimate internet business because of being trigger-happy and overzealous in its pursuit of cyber-criminals.  I can’t be the only one that’s more than a little disturbed by the trend that’s getting established here.  We have a process for this, and it’s called the Digital Millennium Copyright Act; I wrote about the DMCA in my earlier posts on SOPA and censorship, but in short the government needs to actually follow the due process outlined in existing legislation before it starts trying to create new stuff that’s even worse.

Imagine, for a second, that you’re a small-business owner, say a dry cleaners.  One day, completely out of nowhere, the Federal Government decides to shut down your business because there were suspicions that one of your clients was using your business, completely unbeknownst to you, to pass notes to a Russian spy or some other illegal activity; the only connection either party has to your business is that they are both clients.  Again, you have no knowledge whatsoever of it, and would have gladly talked to the authorities yourself as a business owner if you had, and you try to tell the agent in charge of your case this.   However, the agent is busy and doesn’t sound too interested in following up or even acknowledging the harm being done to your business, and so you remain closed down.

To draw a further parallel, your business is across the street from the city’s convention center, where a major trade show is happening this week.  You have another location across town, but it’s not nearly as well-known as your main place; faced with the shutdown, you begin moving clients’ laundry over to your other site and informing them of the move.  Unfortunately, this is hugely inconvenient to many of your clients, and in addition to this extra hassle, some of them begin to lose confidence in your ability to serve them; this is the people you’re even able to reach out to, as many of them may not even see your notices or receive the messages you leave for them.  A week later, the government decides to let you re-open.  Ultimately this shutdown only affects the clients who tried to use your business in the last week, however the damage has been done due to losing all the potential revenue from that trade show, never mind the damage your reputation took in the confusion.

In a very real way, this is exactly what happened to JotForm.  Except, web businesses are not solely 9-5 entities; rather they are open 24/7 and to a global customer base.  JotForm’s main domain was shut down, so they began to shift customers over to a new one; this only inconveniences legitimate users, as we’ve seen time and again previously disabled  sources of copyrighted work pop up less than 24 hours later at some new address, potentially even in a different country.

Web startups are, according to TechDirt, responsible for much of the real job growth in the US economy for the last few years; it is trivial for a startup owner to move all its assets to another country with a much friendlier business climate than the one that US regulators seem to be creating; moving him or herself there would be a bit of a logistical hassle, but I can imagine that a country like France or Germany would be willing to welcome these “job creators” with open arms.

In fact, if I were thinking of making a web startup (I am, in fact, though not for a few years at least…have to finish learning to code first!), I would strongly consider moving to another country that has made a strong statement against the sort of legislation that the US Congress is attempting to pass through every chance it gets.  Make no mistake: I am a content creator, and I recognize that copyright protection legislation is necessary, but the chilling effect that actions like the JotForm case and the attempts to pass the  Stop Online Piracy Act in all its various incarnations are having will prove to be harmful to the US economy and potentially endanger our economic recovery, never mind the various free-speech issues I have already explored in previous posts.

I urge all of you, yes, you, to consider writing your Senators and Representatives to get these agencies to stop harming job growth in the United States by potentially scaring away such a vibrant engine of economic growth.  The anti-SOPA protests proved that we can be effective en mass, with one voice, to make a change.  Let’s continue the fight to have sensible legislation that promotes these startups and free expression while continuing to protect the rights of content creators nationwide.

The Not Safe for Entrepreneurs: Is the Federal Government Scaring Away Startups? by The New Age of Politics, unless otherwise expressly stated, is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.

Tags: ACTA, Business, chilling effect, copyright, Digital Millennium Copyright Act, economic growth, economic recovery, Federal government of the United States, Freedom of speech, Intellectual property, job creators, JotForm, Small business, SOPA, United States Secret Service