Why Internet Censorship in Jordan is Bad for Business

Last week I read the sad news about how an existing Jordanian law related to anti-defamation got applied to Internet websites. As I understand the details of the law is that it links defamation with Jordan’s press and publications laws, making the publisher liable to ensure all content is within the requirements of anti-defamation (See Eyas’s excellent article to get the background). When a website is treated like a publisher, then site owners become responsible to make sure that all content adheres to the law. This means that if I am based in Jordan, I need to ensure the comments on my blog are good. If I create a website that has user generated content, I need to make sure everything is in compliance.

There is a lot of discussion (here, here and here) about how this is bad from the perspective of human rights and freedoms, but I want to look at this issue from the perspective of business impact.  These kinds of laws are just plain bad for business. Let’s look at things from multiple perspectives:

Entrepreneurs

As an entrepreneur, I need to make a decision about where to incorporate and how to ensure my company is in compliance with local laws. Based on this law I need to hire staff to monitor all content on the web site. This costs money. Also, I would need to change my terms of service and privacy policies to meet the requirements of the law. This also costs money. I will need to build controls in my software to moderate and monitor content. This costs money. Surely I can pay for all this, but if I were smart, I would just incorporate elsewhere. What a headache! So, all employment, taxes, and IP benefits will get exported. Not good for Jordan!

Investors

As an investor, I am always looking for ways to maximize my investment and reduce risk. Having such laws introduces more risk to any investment, because the startup has to do additional work and needs to allocate a legal budget to deal with any issues not in the control of the startup. To make matters worse, for Internet startups investors make their money though an exit to a larger company. Would a large company want to buy a liability that would suddenly poison their assets? It is hard enough to get acquired. The law makes things harder. Further, an acquirer will probably relocate the business to a location that is more friendly. Bad news for Jordan!

Large Corporations

Think about it, would a large company setup shop in Jordan if there were other options that did not come with the baggage of censorship? Given the risks, most large companies would just setup shop in a nearby location to avoid these issues. The Jordanian market is small, but is an ideal location and has an amazing talent pool that would serve the entire region. However, when weighing the options, especially around complying with censorship laws, it just does not make sense. Bad news for Jordan!

Creativity

Anyone who has worked with creative people knows they are generally eclectic and do not always conform to the norms. Any successful Internet business is based on its in house expertise and creativity. Having censorship rules, just makes it difficult to innovate because artificial walls are put up. Creativity and innovation is one of the keys to building a successful business. How do we expect people to be creative and push the envelope when they are surrounded by virtual walls. Lack of innovation makes a business less competitive and less likely to succeed. Bad news for Jordan!

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