Despite its long list of supporters who were demanding immediate legislative action against rogue websites, SOPA (the Stop Online Piracy Act), has been called a thermonuclear bomb to destroy the Internet by its opponents, who argued that free speech on the Internet would be thwarted by such regulation.
Consequently, the legislation is now considered dead. Web denizens have rejoiced, sincerely believing that free speech on the Internet was saved from almost certain destruction.
But the reality is that while the Internet has tremendous political and cultural significance and effectively encourages the free exchange of ideas and political speech, voluminous daily Internet traffic involves relatively more mundane commercial uses. Casual users generally seek to engage in routine e-commerce transactions such as holiday shopping and paying bills online, not engaging in political dissent.
Given the extraordinary number of rogue websites engaged in the sale of counterfeit goods and engaging in identity theft, casual Internet e-commerce participants are likely to miss the telltale signs between legitimate sites and frauds. Once the casual consumer becomes defrauded, her primary recourse would be with her credit card company to demand a payment reversal by filing a dispute.
Payment disputes involving cases of online fraud or counterfeiting decided in the customer's favor are often charged against the merchant's account. If the merchant becomes a repeat offender, he may become untouchable, as his merchant bank fears fines and reprisal from the credit card companies.
However, filing a chargeback is not without its fees or hassles to the consumer, fees which can be incurred for just filing the dispute itself. Anyone who has ever been involved in such a dispute can attest to what an enormous hassle it can be.
When the merchant is not solvent (as is often the case with operators of rogue websites), credit card companies may end up "absorbing" the chargeback. Internalized costs may reach $15B. Such costs are not only hits against the credit card companies' balance sheets. These ultimately profitable corporations will just pass these staggering costs along to the credit card user and to legitimate merchants in the form of higher transaction fees and higher interest rates.
So, to the extent that laws aimed at stopping online piracy can help stop thieves from defrauding the casual Internet consumer, such legislation can save consumers fees, lost time and hassles - and credit card companies billions in chargebacks - thus saving you money in the long run.
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