Google vs. Washington: What Really Happened, and What Will Happen Next?

As the dust settles on January's e-protest of SOPA and PIPA, two bills built with a mind toward wrestling American intellectual property out from the grip of online pirates, a tidy narrative has emerged in its wake. If you sympathize with the opponents to the bill -- which, by modest estimates, more than 5 million of us did -- then the story goes something like this: We won.

Sensing, in the form of proposed legislation, a threat to the fiercely unrestricted Web experience that the American people hold so dear, the stewards of that experience raised a war cry and took to the streets. From a blacked-out Wikipedia to a dramatically censored Google (NAS: GOOG) logo to millions of mini-campaigns waged every hour in the Twitterverse, the Internet stepped up to bat against a Congress that, while earnest in its intentions, was perilously misguided in its approach.

From the top down, the protest was heavy with the assertion that Washington did not fully understand what it was attempting to meddle with; as the signatures piled up and the politicians (and indeed, even the White House) backed off, there was a sense of logic prevailing. The Internet, we were told, was safe for now.

Cute story, right?

Here's the problem: It isn't real.
Tempting though it may be to paint the SOPA/PIPA ordeal as a strictly ideological struggle in which right bested might, to do so is to sentimentalize what is, at the end of the day, a corporate war. Consider the problem: Movies, television shows, music, and other forms of media that should be paid for are freely available on the Internet. Consider the solution: Enact policy that makes online piracy, and any act of complicity therewith, harshly punishable. Now consider what's at issue: a whole lot of money, either gained or lost, by two major sectors of American commerce.

Much has been made of the role played by the MPAA, the RIAA, and the entertainment industry as a whole in the creation and pushing forward of these bills, and it's safe to say that their motives here are fairly transparent: When people steal their products, it hurts their bottom line. In the case of Google, though, decidedly less of the conversation has been devoted to business -- this, it turns out, is less sexy than waxing poetic on the power and importance of online innovation.

If, however, we turn our attention away from "cultural warrior" Google and on to "big business" Google, the conversation shifts tones. By putting into play legislation that would hold Google accountable for yielding pirate sites in their search results, Congress would also do the following:

  1. Oblige Google to discourage, or even block, its users from searching for pirated material. That means actively dissuading people from engaging in the company's primary revenue-garnering activity.

  2. Oblige Google to devise and maintain, at its own expense, comprehensive policing measures on its search engines, social networks, and related products.

In other words: SOPA and PIPA put Google between a rock and a hard place
Whatever gain Hollywood stands to make in Washington will almost certainly be a loss for our friends in Mountain View. By adopting a grassroots tactic that tapped effectively into the digital-age ethos ("Get your hands off my browser!"), Google was able to simultaneously protect its business interests and accrue a fair amount of goodwill -- after all, it's a lot easier to root for the company that gathers millions of constituent signatures than the one that sends hoards of lobbyists to K Street.

In the immediate sense, then, Larry Page and company dodged a bullet. If, however, you consider the long view, in which the entertainment industry is justifiably persistent in its quest and increasingly critical of whomever opposes it, the question is not "Will Google dodge this one?", but rather:

When will Google get hit?
Tersely put, Google has not seen the last of the intellectual property issue, and will not be able to levy popular support in defense of its bottom line indefinitely. This will especially be the case for issues in which its bottom line and the public interest are not so conveniently aligned. I, for one, imagine that S.913, or the "Do-Not-Track Act," a newly conceived bill aimed at giving consumers greater control and choice in how their data is collected, will present Google with a bit more of a challenge on its next trip to the Capitol.

Popular opinion has a way of changing with the weather, and the government has a way of involving itself in big business. So while the story from last week -- "The good guys won" -- may be simple for now, don't expect it to stay that way forever.

At the time thisarticle was published Lyons Georgedoes not own shares of any companies mentioned. The Motley Fool owns shares of Google.Motley Fool newsletter serviceshave recommended buying shares of Google. The Fool has adisclosure policy.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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