The Senate Judiciary Committee has approved a measure Thursday that would give the government additional tools to pressure other companies to not do business with domains suspected of illegally sharing copyrighted material.

Some due process for domains was added in during the markup ahead of the vote. This may mean that a domain would loose Internet access and credit card services after being found guilty of copyright violations – instead of just being suspected of them.

S.3804 would direct the DOJ to keep black lists of domains suspected of P2P filesharing and piracy. Businesses like Internet access providers, credit card companies and other contacts would then be forbidden to do business with these sites.

The due process provision could theoretically help websites like McCain’s presidential campaign stay up and running business while fighting charges it had a video on its site that contained copyrighted content. But the scope of the bill is so broad that it has been condemned by big name Internet engineers, the tech industry and civil liberties folks who say it’s not worth breaking the Internet to provide additional tools to curb copyright violations.

Sen. Dianne Feinstein, D-Calif., expressed concern about punishments on domain names and several other senators indicated the bill would need some changes and that a hearing was warranted. CCIA has been among those asking for hearings on this legislation.

Meanwhile, at another senate hearing this afternoon, a Senate Finance subcommittee was examining how Internet censorship overseas is a trade barrier for U.S. companies. CCIA President & CEO Ed Black told that committee Internet freedom must begin at home.

“Even when done with good intentions, when we create blacklists and take down domains, other governments will no doubt replicate these practices — only for more far reaching, less noble purposes,” Black said.

Chairman Ron Wyden, D-Ore., who led the subcommittee hearing on trade and Internet censorship, said S. 3804 was “almost like using a bunker-busting cluster bomb when what you really need is a precision-guided missile.”

Wyden said unless the legislation is modified he will take any steps he can to make sure it doesn’t pass the Senate.

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