Virtual Theft Real Repercussions

Published Date: 02 Nov 2017

Spending a few dollars today could save you millions in the long run or even save you from spending time behind bars. Internet piracy is a crime, which is easily committed and is assumed to be virtually impossible to track, but these common misconceptions are a few reasons more and more piracy teams are facing thousands to millions of dollars of fines and in some cases jail time. The lack of education on the repercussions seems to be the main reason internet piracy continues, therefore the purpose of this paper is to enlighten readers on what is to follow if they continue on this path and why it is time to stop virtual theft before it leads to real consequences.

This paper will start by giving a brief overview of peer to peer file sharing, along with the advantages and disadvantages. Then it will discuss the economic impacts of this technology and how it has negatively affected the economy. Following that, it will discuss past law suits that have risen from peer to peer sharing and how it has affected the guilty party’s lives. Lastly, common misconceptions surrounding this technology will be deliberated.

Overview

Background

The early beginnings of internet piracy are associated with one name, Shawn Fanning. After learning from his friends about the trouble they had finding music they enjoyed, Fanning starting developing a concept for software that would allow him and others to share music files by searching for the music in the software itself (Taylor, 2002). This software relied on friends sharing among each other and fittingly the phrase P2P or peer to peer was developed (Tyson, 2000). Shortly after, BitTorrent was created by Bram Cohen in April of 2001; after being frustrated by slow download speeds of P2P programs, Cohen developed his own protocol, building on Fanning’s work. Before Cohen, file sharing between peers was a one to one interaction, the BitTorrent protocol differs from this by allowing users to download from multiple peers rather than relying on an individuals internet speed (which could be slow if multiple people are downloading from them) as it takes a piece of the file from multiple sources, greatly speeding up the process (Cohen, 2003).

Advantages

There are many advantages to this technology, the main being a fast way to share content to a large audience. Another advantage of peer to peer file sharing is allows artists, musicians, actors, programmers or anyone trying to gain exposure to release their content to the world for free and with little effort. People who have no interest in the movie, or would not buy the c.d. may watch the movie or listen to the music simply because it is free. Then if that person likes the fee content, there is a greater chance that they will go watch the next movie in theaters, buy the DVD or Blu-ray when it comes out, or even go to the artist’s concert and purchase their merchandise.

Another advantage is there are sites that offer legal ways of downloading content such as movies, which an average person would pirate off the internet. Through these legal ways, the consumer pays for the content, but at a subsidized price and receives the content on demand. Consumers can already buy and rent movies over the Internet for computer viewing from a handful of legal sites, such as Intertainer, SightSound, and CinemaNow, which offer films as rentals to viewers who pay-per-view or as monthly subscribers (Levack, 2002). When you are pirating a file you never really know what you are getting. It can be mislabelled, it can be incomplete, and it can even be a virus (Levack, 2002), the hope is for the lack of security in the content will drive consumers to purchase it legally.

Disadvantages

One of the many disadvantages of internet piracy is the lack of income generated from sales of the content that is being stolen, while the cost to produce the content remains the same. The producers are left to account for the difference, and overall makes it difficult to calculate how successfulness of the content. The majority of artists, actors and actresses are against internet piracy because it directly affects how much they earn. According to the Directors Guild of America, Spain Italy and France are the three most impacted countries when it comes to retail revenue losses in Europe (2008) due to piracy "375,000 [is the] number of jobs lost each year because of piracy, costing American workers $16 billion in earnings" (DGA, 2010).

Possibly the most important disadvantage to individuals that otherwise only seem to be affected by the advantages of internet piracy, by illegally downloading music, movies or software you are breaking the law and are at risk of being caught and charged with copyright infringement (Cheunga, 2013). Members of the creative industries have long expressed the belief that they are unable to compete with "free" copies of their content made available through new information technologies. Their argument is intuitive: Once a consumer is able to consume and potentially retain a copy of free content, why would they consider purchasing that content?

Statistics

Peer to peer file sharing is responsible for 27-55% of all global internet traffic and 22% of bandwidth daily, while 98.8% of this traffic is copyright protected (Wilder, 2013). Logically, if even half of the people stopped downloading illegal software, it would free up 13-27% of internet traffic and 11% bandwidth allowing for faster browsing for everyone.

If you look at music alone, the average iPod contains $800 worth of fraudulent songs (Bender, 2009); looking at the iPod touch alone, Apple sold 46.5 million from 2007 to the first quarter of 2012 (Cheng,2012), which amounts to $37.2 billion worth of stolen music files. These losses don’t just affect the record producing companies, the people at the top will remain at the top, the workers underneath are the ones that suffer. Approximately 71,000 jobs are lost every year in the U.S. alone from internet piracy, which totals $2.5 billion in earnings. The total economic impact is approximately $12.5 billion for the US alone, which most torrent host’s don’t realize. Majority of illegal piracy teams are out to make an impact against large corporations, but what they fail to see is that these corporations lay off employees much lower in the rankings to try to balance the books. Additionally, 70% of all torrent downloaders find nothing wrong with the process, they see that they are getting something they need for free, but fail to realize the impacts of their actions. The impacts from their actions are not limited to economic losses, sometimes the host or even the downloader is affected personally.

Past Lawsuits

RIAA vs. Napster

In December of 1999 [Bailey, 2000], the Recording Industry Association of America (RIAA) sued the newly formed company Napster Inc. along with its financial backings for allowing millions of computer users access to copyrighted music for free (Bailey, 2000). The outcome eventually defined the rules of online, peer-to-peer file sharing networks.

According to Cheunga (2013), Napster was liable for indirect copyright violations, because it was allowing millions of users to download music for free and therefore lost the court case and the appeal. Napster declared bankruptcy, unable to claim their rightful owing’s the RIAA turned to the global German media corporation Bertelsmann that supported Napster financially. Overall, Bertelsmann paid: the Universal Music Group, $60 million to settle the allegations; EMI got an undisclosed amount in 2007; Warner Music Group settled that same year for $110 million. The lawsuit finally ended in August 2007, after a $130 million settlement between Bertelsmann and the National Music Publishers Association (Cheunga, 2013).

FBI vs. IMAGiNE

The infamous piracy group IMAGiNE was tactically picked apart by the FBI in 2011. The Motion Picture Association of America started to take notice when IMAGiNE began releasing large number of movies on to the internet, shortly after the MPAA who launched an investigation (Sandoval, 2012).

According to Sandoval (2012), a total of four members of IMAGiNE have been prosecuted so far and one by one they have been receiving their sentences. Here are their sentences in ascending order:

In November 2012, Sean Lovelady of California, a moderator with the group, received a 23 month sentence.

In November 2012 Willie Lambert of Pennsylvania, an administrator, received a 30 month prison sentence (Ernesto, 2012).

53-year-old group sysop Gregory Cherwonik of New York received 40 months by a Virginia District Court Judge and is ordered to pay $15,000.

Jeremiah Perkins, a sysop with IMAGiNE, was sentenced to a record-breaking five years in federal prison and ordered to pay $15,000 restitution. After his imprisonment ends Perkins will be subjected to a further three years of supervised release and will be banned from possessing "any electronic device with the capability or reproducing and distributing copies of copyrighted materials." (Ernesto, 2012; Sandoval, 2012)

From the last two examples it is apparent that internet piracy though peer to peer sharing eventually leads to a lengthy court battle at the end of which a large cheque is due. Evidently, unlike Napster which had financial backing from a much larger corporation, the majority of other torrent hosting teams lack the financial sponsorship needed to survive such a lawsuit. Besides monetary ramifications, jail time is also a factor that must be taken into account when deciding to commit internet piracy, as publicized by several members of IMAGiNE.

Misconceptions

There are two common misconceptions surrounding illegal peer to peer file sharing: "they can never find me" and "I am just downloading, not hosting myself". Significant amounts of the time, these statements are true, but there a constantly growing population that is getting caught and penalized for these actions.

"They Can Never Find Me"

By sitting at home hiding behind a computer, people believe committing theft is okay, but as companies are getting frustrated with their products being stolen they turn to internet service providers (ISP) for help. The companies are starting to ask the ISPs for data regarding which of their clients has illegally downloaded their products; under court order the ISPs have to hand over this information. With the proof from the ISP, the companies sue the individual for copyright infringement. ISP’s are also taking action, a number of ISPs are starting to block sites that host and track torrents to prevent their customers from engaging in this illegal activity.

An easy way to be tracked down is through your IP address, usually this information is tough to acquire, but if you host a torrent your IP is attached to that torrent for anyone to see. Instinctively, the company Logistep designed a program to search torrent websites and track illegal uploads. Once this program finds an illegal torrent, it instantly contacts the host from their open IP address and sends a cease and desist letter (Glorioso, 2010). Logistep has been hunting illegal torrents by the thousands in the past few years, and in doing so aiding with the trial of the criminals by supplying evidence to the prosecutors. These lawsuits have been most predominant in Germany and the U.K., but U.S. corporations are embracing similar techniques (Glorioso, 2010).

Lastly, other pirating teams will turn you in to save themselves as crime has no honour. As discussed earlier, IMAGiNE was caught by the FBI, but they were actually turned in by a rival piracy group that the FBI threatened to prosecute unless they helped track down the members of IMAGiNE (Sandoval, 2012). So, it is safe to say in such a career choice you can’t trust anyone.

"I’m just downloading not uploading…"

Just because you aren’t hosting, doesn’t mean you are safe. In the 2010 case of Microsoft vs. the torrent tracking website TorrentFreak that uploaded MS Office, Microsoft proceeded to sue 106 other individuals for merely downloading their copyrighted software from TorrentFreak (Ernesto, 2010). MS Office retails for $139.99 U.S.; most of the 106 cases were settled in out of court settlements for a few thousand dollars. Another example of this is the illegal download of the movies: The Expendables and The Hurt Locker. The producers of these two movies sued a combined total of over 48,000 people for the illegal download of the DVD; most of these cases settled out of court for a few thousand, which could have been avoided if the defendants just bought the DVD for a mere $24.99 (Ernesto, 2010). This structure of litigation was initiated in the U.S. by U.S. Copyright Group (USCG), but recently it has been replicated by several other lawyers across the country (Jinyoung, 2012).

Summary

From the examples and history provided, it is evident that internet piracy or virtual theft is as real as any other crime. Piracy groups are slowly being taken apart and are not only receiving fines, but jail time as well; is that something you want to go through? It is also clear that producers are targeting downloaders along with the hosts, so no one can claim just because they aren’t putting the content up that they are safe. Companies have found ways to track illegal distribution of their products and will not take it lying down anymore, so now might be a good time to get out while you still can. As you finish reading this, take time to recap your past decisions and put some thought into deciding your future ones as they may save you from spending time behind bars.