Bitly gets caught in Venezuela's crackdown on websites that track black market exchange rates

FILE - In this Feb. 23, 2013 file photo, an anti-government protester in Caracas holds up a fake Venezuelan banknote that reads in Spanish, "This is the revolution. Poor Bolivar," with the value of 100 crossed out and 54 written next to it. Venezuelans have been scrambling for dollars as their bolivar currency is in free fall, selling on the black market for a tenth its official value. In response, the government is trying to block access to websites that Venezuelans use to track the black market exchange rate. (AP Photo/Ariana Cubillos, File) (The Associated Press)

CARACAS, Venezuela – Venezuelans have been scrambling for dollars for weeks, taking refuge in the greenback as their own currency is in free fall. Rather than address the economic imbalances behind the bolivar's plunge, the government is going after the bearers of the bad news — it's taking down websites people use to track exchange rates on the black market.

Cyber-activists say the crackdown goes to absurd lengths, even targeting Bitly, the popular site for shortening Web addresses to make it easier to send them as links via Twitter and other social media. For more than two weeks, access to the service has been partially censored by several Internet service providers in Venezuela, apparently because Bitly was being used to evade blocks put on currency-tracking websites.

The New York company says such restrictions have only previously been seen in China, which has one of the worst records for Internet freedom, and even then not for such an extended period. Opponents of Venezuela's socialist government say the restrictions are designed to obscure reporting of the nation's mounting economic woes.

"We help connect people with information and insight about their world," Bitly CEO Mark Josephson said. "When someone is standing in the way of that mission, that's not something we feel good about."

Bitly got caught in the crossfire of Venezuela's polarized politics a month ago, shortly after President Nicolas Maduro decided to block access to sites such as www.dolartoday.com that publish the black market rate for the bolivar, which is now 10 times the official rate of 6.3 bolivars per dollar.

Maduro accuses the sites of fueling an "economic war" against his government, which is facing municipal elections this weekend that will be its first political test since he narrowly won the presidency in April following Hugo Chavez's death. Many of the sites are also openly critical of the government.

But with the blocks in place, many sites managed to skirt the controls by migrating to Twitter, keeping hundreds of thousands of Venezuelans informed of the black market rate by using Bitly to direct traffic to newly created websites.

In response, telecommunications regulator Conatel sent a letter to Twitter on Nov. 19 asking it to immediately shut all accounts used to violate Venezuela's currency controls, warning that its failure to do so would be "highly damaging to the Venezuelan economy." Twitter has ignored the request but declines to comment on the matter.

Around the same time, Bitly was taken down without notice — a least for Venezuelans who are subscribers to the state-run service provider, CANTV. As a result, the average number of clicks on Bitly-generated links has fallen by half to about 1.5 million a day in Venezuela, Josephson said.

"It's like shutting down all the highways in the country because there was an accident on one street," said Luis Carlos Diaz, a cyber-activist and tech columnist for the Caracas newspaper Tal Cual.

Meanwhile, the government hasn't said how it intends to stem the bolivar's decline, a major factor fueling inflation that hit a two-decade high of 54 percent in October. Economists say the only way to stabilize the currency is by devaluing the bolivar and unwinding decade-old controls that restrict the amount of foreign currency Venezuelans can purchase. Maduro vigorously insists he will never adopt such policies.

The currency market's cat and mouse game continues, because while Bitly remains offline, other URL-shortening services haven't been touched. And Bitly can be used by Venezuelans who access the Internet through private networks.

Every 12 hours or so, the Dolartoday website tweets a message to its 350,000-plus followers directing them to a new Web address using a shortener tool provided by Google, the website's owner told The Associated Press. He spoke on condition of anonymity because he faces arrest for publishing the illegal rate.

Igor Molina, a high-ranking official for Conatel, defends the agency's actions to limit some websites. The more than 100 sites ordered blocked "don't reflect the real economy and assign an arbitrary value to the dollar," he said.

Despite one of the slowest download speeds in the world, Venezuela's online population is the fourth-most active user of Twitter in the world, according to a study this year by PeerReach, a social media research firm.

Partly fueling that is the nation's politics. The harassment of journalists, arbitrary licensing of the airwaves and the takeover of private broadcast media by pro-government owners have made the Internet the last bastion for criticism of the government. And many fear that could be the next battleground.

"Today it's Bitly, but tomorrow it could be the opposition websites," said Diaz, the columnist.

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Associated Press writer Fabiola Sanchez contributed to this report.

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Joshua Goodman on Twitter: @APjoshgoodman