The Business of Infringing Content

CreepycopyrightinfringementWhen people are about to download content from the ‘net that is copywritten, many often ask ‘will I get caught doing this?’ For many, the response is ‘no’ and then continue to download that episode of Seinfeld or whatever. Given that there are so many people downloading, and that record companies in the US have claimed to have abandoned filing new lawsuits against individuals, then things (in North America) appear to be getting better.

At issue, however, is that filing lawsuits is big money, and in Europe especially it looks like Digiprotect has moved in to assume first-mover advantage. Digiprotect gets “the legal rights from the companies to distribute these movies to stores, and with these rights we can sue illegal downloaders. Then we take legal action in every country possible, concentrating on the places where such action will be profitable” (Source). They avoid demanding too much money from infringers, on the basis that few judges like the idea of imposing million dollar fines on individuals – usually opting for suits demanding in the vicinity of 500 Euros. This amount of money ‘teaches’ individuals and provides enough money to keep the employees paid. No staff member has a fixed salary – they are paid according to the ‘cases’ that are won. The actual method of determining the financial burdens are based on the business expenses, profit, and money to be distributed to artists. In effect, the company sets up a honeypot and then sues whomever it is profitable to sue.

On the one hand, you have to give the company some credit: this is a particularly innovative way of eking out an existence. Of course, various types of bacteria that eke out similarly interesting existences under rocks. This seems to be a extortion racket similar to what the RIAA has been running in the US for years; by not asking for absolutely massive amounts of money it is (almost) senseless for the individual consumer to hire a lawyer and put up a fight in court. The amounts of money are low enough that it makes more sense to pay Digiprotect and get them to go away. At the same time, however, it means that an individual who has been falsely identified (which is highly likely, given that Digiprotect performs their backwards trace using the IP address alone) is in a tough situation where they either fight the charge and build up their own legal costs, or pay out to avoid an escalation of costs. This isn’t just speculative theorizing: the BBC has an article that discusses that people who clearly haven’t infringed on copyright are being sued on a regular basis by Digiprotect.

There is no indication of how the IP address is maintained, what information the company links it with, how long data is stored, etc. In effect, it’s unclear whether the company is adhering to German data protection laws – I presume that by participating in a P2P session an individual is not ‘consenting’ to a collection of their personal information that extends beyond the mere technical requirements of sharing data. On this basis, I cannot see how it is reasonable for someone operating in a privacy regime that espouses the need to minimize data collection and retention, while maintaining consent, can let a company obfuscate their actual business practices that depend of the capture of personal information under the auspice of honeypot activities.

Further, since copyright holders are licensing the content to be distributed on P2P systems it is unclear to me how an individual is ‘infringing’ on content where distribution licenses have been secured; licensing content to be shared, and then suing individuals for taking advantage of that sharing seems obtuse. The companies that are using Digiprotect are aware that their content is being put on P2P networks; the aim is to ‘catch’ people and sue them after the company intentionally puts itself in a position of being ‘harmed’ by virtue of sharing their content. This is particularly snakey; companies claim that P2P damages their industry, and to prove their point have their own contend seeded on P2P networks and sue people as ‘proof’ of the harms caused by P2P. In some senses their actions remind me of skits where individuals throw themselves in from of cars, claim that the driver injured them, and then sue them for this harm that the individual put themselves in. I guess it’s a good thing that there isn’t a file sharing insurance packages – the might of insurance companies opposed to payouts would surely shut down companies like Digiprotect like they do claims submitted by people throwing themselves in front of cars.

Of course, companies like MediaSentry have been engaging in these sorts of actions for year, but the difference between them and Digiprotect are:

  1. MediaSentry works for the RIAA, and thus is an instrument of the labels rather than a semi-autonomous profit-making company (MediaSentry makes a profit, but through far more direct relations with labels). There isn’t an attempt to keep MediaSentry at a significant arms length, whereas Digiprotect has their own network of law offices who are receptive to this technique, and just pay a portion of their suit-earnings to labels. The labels get a cut without having to ‘smear’ their own images in court;
  2. MediaSentry doesn’t have to worry about EU privacy laws

As for the second of those claim, I’d need more time than I can devote to break down all the differences between American and German data protection law, and then see if Digiprotect is in violation of law by developing databases containing people’s personal information without their consent. Given that Germany, at least, is far more sensitive to that issue it would be interesting to see how/if Digiprotect has gotten past that privacy block. More broadly, I wonder if Digiprotect is in any way worried about DPI appliances that are sensitive to copywritten files’ signatures as potentially endangering their operations? iPoque could be their worst foe in the sphere of competition; could DPI ‘save’ consumers from this nasty business model where DPI appliances pre-emptively prevent the sharing of tagged copywritten files?