The White House has voiced doubt over the online piracy legislation pending in Congress.
Three advisers to President Barack Obama said in a blog posting they believed the proposed Stop Online Piracy Act (SOPA) and other bills could make businesses on the internet vulnerable to litigation and harm legal activity and free speech.
"Any effort to combat online piracy must guard against the risk of online censorship of lawful activity and must not inhibit innovation by our dynamic businesses large and small," said the officials, including White House cyber-security czar Howard Schmidt.
The House of Representatives' SOPA bill aims to crack down on online sales of pirated American movies, music or other goods by forcing internet companies to block access to foreign sites offering material that violates U.S. copyright laws.
U.S. advertising networks could also be required to stop online ads and search engines would be barred from directly linking to websites found to be distributing pirated goods.
Search engine Google has repeatedly said the bill goes too far and could hurt investment, and along with other internet firms including Yahoo!, Facebook, Twitter and eBay, it has run advertisements in major newspapers urging Washington lawmakers to rethink their approach.
Proponents of stricter piracy rules reacted strongly to the White House statement, which darkened prospects for legislation already expected to struggle to clear Congress in an election year.
"It is not censorship to enforce the law against foreign thieves," said Lamar Smith, a Texas Republican who chairs the House judiciary committee.
He estimated intellectual property industries provide 19 million high-paying U.S. jobs and account for more than 60 per cent of American exports.
"Congress cannot stand by and do nothing while some of America's most profitable and productive industries are under attack," he said in a statement responding to the White House.
Smith had earlier vowed to press ahead with the bill in spite of criticism from Google and others and said he thought it would pass the House, where Republicans have a majority.
The U.S. Chamber of Commerce said it strongly supported the House legislation as well as the "Protect IP Act" in the Democrat-controlled Senate, calling both "narrowly targeted bills designed to target the worst of the worst offenders."
"Given the broad consensus that this issue needs to be addressed, it is time to come together and adopt strong legislation that ends the ability of foreign criminals to prey on innocent consumers and steal American jobs," it said.
The Motion Picture Association of America said while the White House statement raised significant points, "protecting American jobs is important too, particularly in these difficult economic times for our nation."
And the Recording Industry Association of America, noting the United States is the world's top exporter of creative works, said it was intolerable for internet companies to be allowed "to direct law-abiding consumers to unlawful and dangerous sites."
"Hyperbole, hysteria and hypotheticals cannot change the fact that stealing is wrong, costing jobs and must be contained," it said.
Schmidt and the other advisers said the Obama administration was ready to work with lawmakers on a narrower, more targeted approach to online piracy to ensure that legitimate businesses - including start-up firms - would not be harmed.
They also said online firms and Internet providers should adopt voluntary standards to clamp down on piracy, an approach Republicans in Congress and many companies have said lacks the teeth to have an impact.
Saturday's statement did not make clear whether Obama would veto the piracy legislation if it reaches his desk, something the White House would likely spell out more formally ahead of any votes in Congress.
Sherwin Siy, deputy legal director of the consumer rights group Public Knowledge, called on lawmakers to set aside the existing bills and get to work on a new "consensus bill" responding to the White House concerns.
"The messages being sent by the public in opposition to this bill are finally getting through to Washington," Siy said.