Leading Online Ad Networks Agree to Voluntary Piracy Program

2012-25 REP Marissa Mayer P

Yahoo's new CEO, a longtime Google exec, becomes one of Silicon Valley's most powerful female figures even as she faces big challenges in crafting a content strategy for the troubled web giant.

An industry effort to stop advertisements from appearing on websites primarily devoted to piracy is winning applause from the White House and a mixed reception from the Motion Picture Association of America.

AOL, Condé Nast, Google, Microsoft and Yahoo are among the companies that have voluntarily agreed to best practices on this front. Each of the companies will maintain internal procedures designed to ensure that third-party websites deemed to be bad actors on the piracy front do not benefit from ad revenue.

As spelled out in the guidelines, an informal complaint process will be set up whereby rights holders will be able to inform an ad network of a troublesome website. After notice comes, Google and other ad networks will investigate the flagged website and make a determination. Although no specific appeals process is mentioned, the best practices suggest that websites will be given the opportunity to make a counter-notice.

PHOTOS: 10 Most Pirated Movies of All Time

The multi-company effort to do something about pirate sites is similar to the industry cooperation that fostered the adoption by ISPs of the Copyright Alert System. This effort comes in lieu of legislation. During the debate over the Stop Online Piracy Act, there was great talk about legislating an approach that would cut off the financial support of websites that facilitated copyright infringement.

The Obama administration is throwing its support behind the plan:

"The Administration strongly supports voluntary efforts by the private sector to reduce infringement, and we welcome the initiative brought forward by the companies to establish industry-wide standards to combat online piracy and counterfeiting by reducing financial incentives associated with infringement. We believe that this is a positive step and that such efforts can have a significant impact on reducing online piracy and counterfeiting."

Meanwhile, MPAA chairman Chris Dodd has issued a statement acknowledging that advertising shouldn't be used to support illegal activity. But he's concerned about the onus on copyright holders and fears that the establishment of best practices doesn't go far enough:

"An incremental step forward that addresses only a narrow subset of the problem and places a disproportionate amount of the burden on rights holders is not sufficient. Absent meaningful proactive steps by players in every sector -- advertisers, ad agencies, ad placement services, online ad exchanges and rights holders -- the results will be similarly incremental. It is our hope that all parties will work together and build upon today's announcement. We encourage the Administration to continue its leadership and convene a meaningful and transparent multi-stakeholder process, with a goal of developing a comprehensive and effective response to significantly reduce the presence of legitimate advertising on illegal Internet sites."

Others in the industry are waiting to see more.

"The real test will come as these practices are implemented, and whether they have a demonstrable impact," said RIAA CEO Cary Sherman. "We will be monitoring closely."

E-mail: Eriq.Gardner@THR.com
Twitter: @eriqgardner