Summer 2010

The European Front

Internet theft is a global problem, not just an American one. Some European countries have responded with innovative laws that could become the model for fighting international piracy.

Illustrated by Stuart Bradford

European Piracy

The common wisdom affixed to a popular bumper sticker—“think globally, act locally”— is a surprisingly apt slogan for the ongoing international fight against Internet theft. Of course, it is a global issue, and probably the most serious one facing filmmakers, authors, musicians and other creators of copyrighted material. But the battle must begin at home with both education and legislation. And nowhere is this more evident than in Europe.

In the face of widespread online theft, a growing number of European governments have recognized the need for tougher laws to crack down on illegal file sharing. In the past year, major advances have been made across Europe in the fight against online theft. France and the United Kingdom have passed legislation to deal with Internet theft, and Ireland has instituted new measures. In countries such as Spain, where online theft has devastated the market for films and TV programs, efforts are under way to pass laws that will improve the situation for rights holders.

France was the first major European country to pass legislation to deal with the problem of Internet theft. This legislation, called Création et Internet (known as HADOPI), was introduced by the French government and passed in May 2009 after a hard-fought effort that had the strong and active support of French filmmakers and other film artists. The law takes what is known as a “graduated response” approach, which puts in place a series of warnings and sanctions. Initially, a user might receive a warning for unpaid bills or other illegal activity that would escalate in severity if the warnings are ignored and the user becomes a repeat offender.

Under the French law, after three such notices a user is sent stronger warnings, which inform users they may face stronger consequences and sanctions. If that user still continues illegal activity—meaning they are clearly a repeat offender—they face the suspension of their Internet connection for between two months and a year. The government agency set up to monitor this process, also known as HADOPI, has been established and plans call for first notices going out to users by the end of July.

Speaking about the achievement of this legislation, film director and L’ARP (Société Civile des Auteurs-Réalisateurs-Producteurs) Vice President Jean-Paul Salomé said, “Throughout the incredible parliamentary soap opera, during which the position of creators was condemned and misunderstood, this bill, and the introduction of a graduated response, now means that intellectual property and copyright have been upheld as fundamental rights. It does not compromise the individual rights or freedom of Internet users, but rather acts as a regulation to the services offered
to them. The solidarity of American filmmakers provided valuable support in this fight.”

Following the action in France, the UK Parliament, despite vocal objections from “free Internet/free content” opposition, passed the Digital Economy Act (DEA). The Act toughens the penalties for copyright infringement also utilizing a form of graduated response. In addition to written notices from Internet Service Providers (ISPs), details of illegal customer activity must be supplied to rights holders on request in those cases where there is clear evidence of repeated file
sharing despite warnings. The new law also requires ISPs to block access to Internet sites that facilitate “substantial” infringement and even allows (but does not mandate) for suspension of Internet connections for the most serious repeat offenders. A draft of the code was released in June, raising expectations that the first round of notifications
will be sent to customers next January. These notifications will come from the ISP, informing individual users that their Internet connection has been identified as a source of copyright infringement (e.g. illegally downloaded music or movies would trigger such a warning). Any user who receives three letters in the space of twelve months is considered a repeat offender and is likely to face some kind of legal action. It is hoped that written notices will prove enough to deter a significant portion of online theft, since many people do not even know they are engaged in an illegal activity.

However, the legislation also states that if after a year there has not been a 70 percent reduction in Internet theft in the UK then other measures could be examined and potentially deployed, ranging from the capping of bandwidth or, in the most extreme cases, disconnection from the Internet entirely. One of the unresolved questions that is critical to the actual implementation of these measures in the UK and France is who will pay for their financially significant administration. Copyright holders in Europe currently foot the bill for all legal costs associated with actions taken against specific pirates or pirating sources. But with these new laws the formula is still unclear. “One small ISP in France has made a request to the higher court,” says Cécile Despringre, executive director of the Society of Audiovisual Authors (SAA), a new European organization set up to strengthen the economic and moral rights of content authors at the European level. “Because there are still questions about who will be responsible for the cost of sending the notifications. But that should be the last obstacle to implementation.”

Neither Britain’s Digital Economy Act nor France’s Création et Internet glided into law without overcoming serious opposition. In the UK, the ISPs, concerned about burdens the DEA could place on them, were strongly opposed to it, while in France, despite strong backing from President Sarkozy, large and vocal opposition was mounted by netroots organizations and the French Socialist Party. While consumer groups in England and France have been lobbying against the new laws, it is not considered likely that either piece of legislation will be reversed.

Meanwhile, as of May, Ireland was the first country in the EU to put a graduated response policy into effect. Under a pilot plan, the Irish ISP Eircom will give customers who illegally share copyrighted music three warnings before cutting off their broadband service for a year. Dick Doyle, director general of the Irish Recorded Music Association, has said that international research suggests 80 percent of users will stop illegal file sharing if they get a letter from their ISP warning them of the consequences. The effectiveness of the plan will be reviewed after 90 days.

This past January, Spain—a country decimated by piracy—passed a “Sustainable Economy Law” enabling judges to shut down websites that host copyrighted works in as little as four days, when it had previously taken a year. Spain’s approach is slightly different to that of the UK and France, because judges have ruled—to the dismay of creators and rights holders—that individual file sharing is “legal” as long as there is “no talk of money or any other compensation” and that files are only shared for their own sake.

In the second half of 2009, pirated online content in Spain, including music, movies, video games and books, accounted for 5.1 billion euros ($6.3 billion) according to a study by IDC Research Iberia, the Spanish arm of the U.S. consultancy IDC. The report, polling almost 6,000 Spaniards, found that piracy accounted for 83.7 percent of all online movie consumption and 95.6 percent for music. According to The New York Times, the Office of the U.S. Trade Representative has included Spain on its “Watch List” (in its Special 301 Report) for the third year running, because of its “particularly significant Internet piracy.”

Joan Navarro, head of the Spanish Coalition of Creators and Content Industries, is optimistic about the new law. “It’s a positive step,” he says. “They are going after the producers of the piracy, those who spread works without permission from the authors and not the users.” The flaw in the Spanish approach, and the reason piracy is so rampant in Spain, is that file sharers can simply switch from Spanish to, say, Scandinavian websites and carry on as before, with no fear of legal reprisal, provided users aren’t paying anyone for supplying the pirated content. So can these new pieces of legislation be effective? Despringre is careful to contain content producers’ expectations: “The objective of the HADOPI law,” she says, “has never been to eradicate piracy; it was to raise awareness among users that copyright exists on the Internet too. I believe it will succeed in reducing illegal file sharing. But HADOPI is not a protection against real pirates—those determined to get their content for free—it is for normal people who didn’t previously understand what was permissible online.”

Current debates within the EU Institutions underline how important and difficult it is to step up efforts to raise awareness about the significant economic and social impact of digital theft. The European Parliament is currently discussing a report (known as the “Gallo report”) that will determine its position on how enforcement of intellectual property rights on the Internet can be strengthened. This report has generated heated debate with political parties such as the Social Democrats and the Green Party arguing in favor of legalizing file sharing, which they say would be for “private use only.” They are also proposing alternative remuneration models for creators such as a “global license.”

The ongoing dialogue with these political groups is very difficult, says Johannes Studinger, head of UNI MEI, an organization representing 140 media and entertainment industry unions and guilds worldwide. Studinger believes that the inclusion of unions and guilds in the dialogue with EU Institutions is important so that EU decision-makers understand how unauthorized file sharing and other forms of digital theft deprive creators and rights holders of their fair share of the benefits generated by the digital economy; reduce the capacity of creative industries to invest in the production of creative content; and destroy jobs for creators, technicians and other workers. “Our sustained campaign—carried out with the support of the DGA—targeting members of the new Parliament is essential because it will co-determine EU copyright policies for the next five years,” Studinger says.

Overall, the new legislation being implemented across Europe has been warmly received by both creators and unions. Speaking about the new British law, Martin Spence, assistant general secretary of BECTU, the UK’s media and entertainment trade union, says, “There may be cases where broadband subscribers are genuinely unaware they are infringing, but the warnings about ‘rushing to legislate’ have been listened to. The draft code proposed is a reasonable set of steps; nobody approached about possible infringements will be able to claim they were not aware of what they were doing wrong and what the consequences would be for carrying on.” For Spence, the urgency of the issue has not been lost in translation to legislation. “Politically, no ground has been given over the fundamental understanding that illegal downloading and file sharing are forms of theft, and that the industry cannot stand by and watch it happen.

As part of the Guild’s effort to keep its members informed about the dangers and complex issues of Internet theft, the Quarterly continues its ongoing series of stories.

Internet Theft
As part of the Guild’s effort to keep members informed about the complex issues of Internet theft, the Quarterly has run an ongoing series of stories on the subject.
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