Imagine you started an online business to help diversify your income. You worked for months—even years—to build a customer list, develop products and finally achieve the dream of quitting your job and becoming your own boss.
Then one day Google sends you a notice saying that your ads have been pulled due to a complaint. The next day, you receive an e-mail from PayPal stating that your business account has been cancelled. Customers start contacting you, saying they can’t get to your website. You type your domain name into your web browser and get an error: “not found.” Frantically, you contact your web-hosting provider and they tell you they were instructed to cancel your account due to a single possible IP [Intellectual Property] infringement.
Your livelihood is destroyed in just a few days. Welcome to the possibly not-so-distant world of PROTECT-IP and SOPA.
The PROTECT IP Act and SOPA Act bills were introduced earlier this year in the US Senate and House of Representatives to provide companies with IP concerns new powers to take potentially “IP-infringing” materials offline. Unlike the existing DMCA legislation that has been signed into law, these acts intend to take available enforcement actions to the next level. Instead of just removing individual content, web providers can be compelled to shut down the entire website. Court orders can be sent to search engines such as Google to force them to remove your website from search results. Ad networks can be forced to remove your ads, and payment processors such as Authorize.net and PayPal can be forced to close down your accounts.
In short, if either of these acts gets signed into law, media companies concerned with potential IP infringement can totally destroy your online business — all with the full force of US law.
It is no surprise that Hollywood is excited about the potential passage of these laws as it gives them immense control over the Internet (potentially destroying “fair use” commercial law provisions.) While you can try fighting these companies in court, your website could be offline for months or even years. The media companies claim these acts are being pushed to allow them to more easily target sites that pirate their intellectual properties. But those sites can quickly reappear in another place with another host and domain name. The online business you have built cannot.
Even less of a surprise is the news that two congressional staffers who helped write these abominations moved into the “private sector” and are now working for major entertainment industry lobbyists. (Who says that there is no money to be made in government work?)
Neither of these acts may pass into law. Organizations such as the Electronic Frontier Foundation are fighting the passage of these acts, as are several members of Congress. However, even if they do not pass, it is likely that senators and representatives who are friendly with the entertainment industry will introduce similar legislation in the future (just as they did in 2010.)
Note that both acts will affect not only US-based websites, but also US-based search engines, payment processors, ad networks, and other resources that website owners might use for their businesses.
So how, then, do you protect yourself from future US laws that might affect your online business?
The Internet is Global, Your Business Should Be as Well
Every single component of your online business can be diversified internationally. You can protect your business from abusive US intellectual property enforcement while making your business more successful by reaching new customers around the world.
Here is how to internationalize the three main technical components of any online business:
- Domain Name: The domain name is an important, yet inexpensive resource you need for your online business. Many people automatically default to getting a “.com” address for their website. However, .com/.net and other “common” domain names are fully under the control of the US government. For example, US Customs can pull/remove these domain names from your business without a court order. (In fact, US Customs have even been bragging about having and using this power.) You can get around this by looking for domains that are not located in the US. For instance, the “.co” domain is run by a corporation in Columbia and the “.bz” domain is run by an entity in Belize. For a few extra dollars per year you can get domain names for your business that the US cannot easily seize.
- Hosting: The next most important resource for your website is where you host the site. There are many solid companies where you can host your website that are located outside of the US. If your web business is focused in North America, there are hosting providers in Toronto, Panama City, and Bermuda who can provide great response time for your customers. Outside of North America, investigate Switzerland for European focused sites and Malaysia or Hong Kong for Asian focused sites. Hosts in these sites will generally not respond to US website takedown requests without an accompanying court order from the government of the country the host is located in.
- Payment Processors: Every business, online or not, needs to get paid. There are many quality payment processors located outside of the US that will allow you to take payments online. They can settle payments from customers using Visa, Mastercard and other popular payment types in a variety of currencies and transfer funds to your international business bank account. More importantly, these processors can give you access to entire payment networks (similar to Visa and Mastercard) that are not located in the US. In Asia, networks like AliPay and UnionPay service billions of Chinese consumers and in Europe net debit networks like Monnet and PayFair are becoming popular. If you are not using an international payment processor you are not only ignoring a very important aspect of business diversification, but you may also be preventing new customers from buying your products.
The Next Steps
Start by examining your current online business and the resources you are using. If every component of your business (incorporation, domain name, hosting, merchant account, e-mail, etc.) is located in the US, look for ways that you can logically diversify these components internationally. Perhaps you can start a mirror of your current website that could focus on a different market (i.e. Asia or Europe) and use international components so as not to disrupt your current business.
If you are planning a new online business, make sure that you look at all of the available options for every aspect of your website. Begin with the jurisdiction where you want to incorporate your business, followed by where the site is hosted and the location of the domain name. Many popular international jurisdictions have a wide choice of suppliers for each component of your online business structure.
While you may not be able to control whether acts like SOPA and Protect IP get passed into law, if you follow these simple steps, at least you’ll be able to ensure your business still goes on.
[If you don't have a strategy for dealing with the dangers of the online world, download our Online Privacy report, which will share some common sense steps you can take to protect yourself and your family from the dark side of the Internet. Available to International Man Network Members. If you are not yet a member, you can join here.]
About the Author: Kyle Gonzales is a self-taught, self-made business professional with 13 years of experience in the IT industry. Over that time, he has assumed leadership positions ranging from corporate networking to technical sales. In 2011 he launched JumpShip Services, a firm that offers "multi-flagged" e-mail solutions that offer enhanced security, privacy and peace of mind for your digital communications.