PharmacyChecker.com found itself in a tough spot. The website evaluates online pharmacies, giving people information about how to cheaply and safely import prescription medicines into the U.S. for personal use. A network of other groups, closely aligned with U.S. pharmaceutical companies, is trying to drive Pharmacy Checker off the Internet, but Pharmacy Checker is calling them out.
PharmacyChecker is the focus of a pressure campaign aimed at Internet gatekeepers, including domain name registrars, web hosting services, advertising networks, and search engines. PharmacyChecker is fighting back with an antitrust lawsuit against these rival groups, accusing them of conspiring to restrain competition, both in lawful prescription drug sales and in information about how to save money on prescription drugs. The pharmacy groups’ influence campaign against Pharmacy Checker is a classic example of shadow regulation—the use of private agreements with the Internet’s gatekeepers to regulate the speech of others. Pharmacy Checker’s antitrust suit is an important testcase for fighting back against unaccountable private speech policing.
This lawsuit grows out of a debate over the price and availability of prescription drugs in the U.S. Even though many developed countries, including the U.S. and Canada, often obtain prescription medicines from the same manufacturers, U.S. law severely restricts the importation of medicines. This contributes to the U.S. having the world’s highest prices for prescription drugs. To make their medicines more affordable, many people in the U.S. purchase prescription drugs in Canada and bring them into the U.S. for their own use. Under Food and Drug Administration guidelines, American consumers can import up to a 90-day supply of many prescription medicines for personal use.
Pharmacy Checker helps people to do that. The website doesn’t sell medicines, but it investigates pharmacies that sell online in several countries. Its verification process looks at whether pharmacies are licensed in their jurisdictions, and whether they require a valid prescription before dispensing medicines.
Another group of organizations provide a similar service. The National Association of Boards of Pharmacy (NABP), Alliance for Safe Online Pharmacies (ASOP), Center for Safe Internet Pharmacies (CSIP), LegitScript, and Partnership for Safe Medicines (PSM) work together to provide information about pharmacies to consumers, with a key difference: these organizations treat any personal importation of drugs into the U.S. as illegitimate and harmful, even when it’s permitted under the FDA’s discretionary policy. While these efforts help to stop the importation of dangerous drugs, they also insulate U.S. pharmacies and drug manufacturers from price competition, helping them to maintain high prices. These groups collectively have close ties to manufacturers, through their trade association PhRMA. Many advisers and lobbyists from the pharmaceutical industry now work for one of these organizations. And LegitScript describes PharmacyChecker as an illegitimate service promoting “rogue online pharmacies.”
Through federal enforcement agencies, customs officials, and the court system, the U.S. government generally has the power to shut down businesses that break the law, and seize illegal drug imports. But providing information about foreign pharmacies, including advice on how to import prescription medicines safely, is protected by the First Amendment. That explains in part why ASOP, LegitScript, and their partner organizations turned to a campaign of influence over Internet gatekeepers to suppress information about foreign pharmacies reaching U.S. consumers. This is a classic example of shadow regulation: agreements between the Internet’s gatekeepers and special interests seeking to control others’ speech. Shadow regulation is pernicious because it bypasses democratic accountability. And when it happens in industries with little competition, it avoids accountability through the market, as well.
According to Pharmacy Checker’s complaint, ASOP, CSIP, and LegitScript seek to deny safe online pharmacies access to customers in the U.S., and suppress information about those pharmacies, by creating a blacklist and pressuring various Internet intermediaries to enforce it. The complaint quotes a 2010 press release from ASOP announcing a goal of “requiring Internet search engines, domain name registrars, and other ‘gatekeepers’ to stop enabling rogue Internet drug outlets.”
In practice, says the complaint, NABP tried to convince ICANN, the organization that sets policy for the domain name system, to require domain name registrars to suspend companies that appeared on NABP’s blacklist, effectively removing them from the Internet. The pharmacy organizations also allegedly persuaded vendors that maintain other blacklists used by parental controls and firewalls to list Pharmacy Checker as “not safe,” “malicious,” or “promoting illegal activity.” And, says the complaint, they convinced Microsoft to show a red CAUTION shield and warning dialog when Pharmacy Checker appeared in Bing search results and a user clicked on the link. Other initiatives included working to create a “.pharmacy” top-level domain, and excluding both Pharmacy Checker and legitimate Canadian pharmacies from that domain.
It’s easy to see parallels between this campaign and the efforts of major entertainment companies that EFF has often spoken out against, and challenged in court. It resembles efforts like the now-defunct “Copyright Alert System,” also called the Six Strikes agreement, between major Internet service providers, movie studios, and record labels. It also calls to mind the “Trusted Notifier” agreements between the Motion Picture Association of America and the domain name registry operators Donuts and Radix.
In each case, an industry that wants to suppress certain speech (infringing copies of movies and music; information about foreign pharmacies) makes agreements with an Internet gatekeeper who has that power. For Internet users, the result can be very similar to official government action (say, a court order to shut down a website or suspend its domain name) but without the transparency and accountability of public laws and legal proceedings. The U.S. government, in particular the U.S. Trade Representative and the Intellectual Property Enforcement Coordinator, have vigorously promoted these “voluntary agreements” — in part because they advance some government interests in suppressing “dangerous” speech while sidestepping First Amendment issues.
But while the First Amendment doesn’t apply to purely private actors, the antitrust laws do. One of the things the Sherman Antitrust Act prohibits is companies that compete with one another getting together (including through trade associations) and agreeing to block another competitor from the market, eliminating a lower-cost competitor and keeping prices higher than they need to be.
That’s what Pharmacy Checker’s lawsuit against the pharmacy groups alleges. Although not every attempt to use shadow regulation to police speech on the Internet will be an antitrust violation, some probably will, especially where they result in higher prices or lower-quality Internet services. And having a noble goal, whether it’s stopping truly dangerous drug imports or stopping copyright infringement of popular movies, doesn’t necessarily excuse a violation of the antitrust laws. That’s why we’ll be following Pharmacy Checker’s lawsuit with great interest.