Last week, rumors that Google has been in talks with major online payment processing outfits such as MasterCard, Visa, and PayPal to starve “illegal” websites appeared in an article in the UK’s Telegraph. While the search giant could certainly be asked to chill the search listings of such sites, payment processors have long been used to freeze funding to questionable content; in mid 2012 PayPal made it a policy to withdraw from major cyberlockers.
Then, as now, it seemed like a potential huge win for Bitcoin. By cutting off legitimate businesses–as many cyberlockers happen to be–PayPal opens up a market niche for alternative payment services to move in. In fact, we’ve already seen resellers for Mega turn to Bitcoin in order to make up for not having access to PayPal.
According to the Telegraph article, Google has long taken the approach that to shut down illegal sites, a follow-the-money approach has long been the search giant’s thoughts on how legislation such as SOPA should move (rather than via outright censorship.) However, illegal operations already can have their assets frozen and find themselves having payment processors such as Visa and MasterCard drop them.
This is also a favored method for much of the copyright industry to fight piracy; but the chilling effect here is that unlike legal or civil proceedings the repercussions can be without much oversight.
Even if Google doesn’t move on this sites may seek alternative processing just in case
The idea of a site being “illegal” is so nebulous when it comes to how copyright industry groups have moved in the past that it could put any site that works with media in the crosshairs. This doesn’t just mean cyberlockers, but anyone who works with cloud storage and permits their users to upload their own content.
As a result, accepting Bitcoin might become an excellent move right now.
If only as preparation for when Google’s baleful “do no evil” eye turns toward them. Unlike current traditional processors like credit cards and PayPal, Bitcoin cannot be starved out because it isn’t controlled by any central agency.
The mere expectation that someone as powerful as Google might want to team up with payment processors to starve out potentially “illegal” sites should stir a certain level of paranoia. While it’s hard to say exactly what sort of role Google could potentially even have in this so-called partnership (Techdirt questions exactly this about the rumors) it raises questions about how a website might get cited as “illegal.”
We’ve already seen sites starting to dip into the Bitcoin bucket such as reddit considering the cryptocurrency and WordPress.com jumping on wholeheartedly. Mega and resellers of that services fall neatly into the cyberlocker model so it makes sense that they’re already edging into bitcoins to insulate themselves.