College of Business Administration (COBA)
MIS 433 Internet Business and Web Development
MGT 302 Internet Business
Individual Project
Marks: 10%
The Pirate Bay:
Searching for a Safe Haven
The Pirate Bay (TPB) has been one of the world’s best-known and most popular pirated music and content sites for over a decade, offering free access to millions of copyrighted songs and thousands of copyrighted Hollywood movies, television shows, and video games. This despite the fact that TPB has been subjected to repeated legal efforts to shut it down. In fact, the authorities pursuing TPB must feel as if they are engaged in a never-ending game of Whack-a-mole, as each time they “whack” TPB, it somehow manages to reappear. But the battle is far from over, and for the first time, it appears possible that the “good guys” are actually winning. The Internet is becoming a tough place for music and video pirates to make a living in part because of enforcement actions, but more importantly because of new mobile and wireless technologies that enable high-quality content to be streamed for just a small fee.
TPB is part of a European social and political movement that opposes copyrighted content and demands that music, videos, TV shows, and other digital content be free and unrestricted. TPB does not operate a database of copyrighted content. Neither does it operate a network of computers owned by “members” who store the content, nor does it create, own, or distribute software (like BitTorrent and most other so-called P2P networks) that permits such networks to exist in the first place. Instead, TPB simply provides a search engine that generates a list of search results from P2P networks around the world where the titles can be found. By clicking on a selected link, users gain access to the copyrighted content, but only after downloading software and other files from that P2P network.
TPB claims it is merely a search engine providing pointers to existing P2P net-works that it does not itself control. It says that it cannot control what content users ultimately find on those P2P networks, and that it is no different from any other search engine, such as Google or Bing, which are not held responsible for the content found on sites listed in search results. From a broader standpoint, TPB’s founders also claim that copyright laws in general unjustly interfere with the free flow of information on the Internet, and that in any event, they were not violating Swedish copyright law, which they felt should be the only law that applied. And they further claimed they did not encourage, incite, or enable illegal downloading. Nevertheless, the defendants have never denied that theirs was a commercial enterprise. Despite all the talk calling for the free, unfettered spread of culture, TPB was a money-making operation from the beginning, designed to produce profits for its founders, with advertising as the primary source of revenue.
However, the First Swedish Court in Stockholm declared TPB’s four founders guilty of violating Swedish copyright law, and sentenced each to one year in prison and payment of $3.5 million in restitution to the plaintiffs, all Swedish divisions of the major record firms (Warner Music, Sony, and EMI Group among them). The court found that the defendants had incited copyright infringement by providing a website with search functions, easy uploading and storage possibilities, and a tracker. The court also said that the four defendants had been aware of the fact that copyrighted material was shared with the help of their site and that the defendants were engaged in a commercial enterprise, the basis of which was encouraging visitors to violate the copyrights of owners. In fact, the primary purpose of TPB was to violate copyrights in order to make money for the owners (commercial intent).
Meanwhile, the U.S. government pressured the Swedish government to strengthen its copyright laws to discourage rampant downloading. In Sweden, downloading music and videos from illegal sites was very popular, engaged in by 43% of the Swedish Internet population. To strengthen its laws, Sweden adopted the European Union convention on copyrights, which allows content owners to receive from Internet providers the names and addresses of people suspected of sharing pirated files. In France, participating in these pirate sites will result in banishment from the Internet for up to three years. As a result, Internet traffic in Sweden declined by 40%, and has stayed there.
TPB appealed the court judgment and has not paid any fines. That doesn’t mean that TPB has not been affected by the lawsuits, however. In 2011, the firm moved its servers into caves in Sweden, and dispersed multiple copies of its program to other countries. In response to the lawsuits, police raids, and confiscation of servers, TPB has had stints in France, Finland, Italy, Germany, Denmark, Ireland, the U.K., and Greece within the last few years. These countries have in some cases refused to allow Internet service providers in their countries to host or link to TPB, no matter where in the world its servers are located. Authorities have shut down TPB’s top-level domains in Sweden, Greenland, and Iceland, but TPB has continued to operate by hopping from country to country, moving to Sint Maarten, to tiny Ascension Island, to Peru, and back again to Sweden. In 2014, co-founder Gottfrid Svartholm Warg began serving a 42-month term in prison in Denmark for both copyright infringement and computer crimes unrelated to TPB, co-founder Peter Sunde was arrested after years on the run, and served a five-month prison term for copyright violation, and Fredrik Neij, another co-founder, was arrested in Thailand, then transferred to Swedish custody to serve a 10-month prison sentence. The company’s financial resources also began to run dry. As interest continued to accrue on financial penalties previously levied on TPB, Carl Lundstrom, the site’s primary financial backer, declared bankruptcy.
In December 2014, police again raided the site and shut it down. The site remained offline for seven weeks, until January 2015, the longest period of time it had ever been shut down. Members of the hacker group Anonymous claimed it was now in fact an FBI honeypot designed to trap the unwary. Even if rumors about the FBI are not true, many believe that it is not a good idea to use TPB anymore for other reasons: the site is now riddled with ads containing malware, contains downloadable malware and ransomware masquerading as popular movies and TV programs, and frequently goes offline. Even one of its original co-founders, Peter Sunde, has recommended that the site shut down once and for all. Nevertheless, the site continues to prove as elusive as ever for law enforcement, using a distributed approach to minimize the impact of closures in any individual country in which it operates. In 2016, a Swedish court ruled that the state could confiscate its top-level Swedish domains. In response, the company moved back to its original .org domain from 2003, which puts it back within the crosshairs of the United States.
In 2016, several lesser file sharing sites have voluntarily ceased operations, citing falling traffic and revenues and legal concerns. Although TPB recorded increases in site traffic after each of the closures, it’s not a good sign for piracy sites in general. Nonetheless, TPB seems to have resilience that other sites lack, celebrating its 13th anniversary in 2016. TPB returned to the top spot among sites of its kind in 2016 after a multi-year hiatus due to its leadership upheaval and frequent closures. TPB has also become the largest video streaming site in the world thanks to a plugin that allows users to stream pirated content directly from their browsers. In typical Pirate Bay fashion, the plug-in behaves suspiciously like malware and is replete with bugs, but for users who are dead set against paying for content, the arrival of streaming to TPB has been a welcome addition. Those users also had to overcome many popular browsers, including Chrome and Firefox, blocking The Pirate Bay as malware.
The record industry’s struggle against TPB is just part of the battle that it has been waging for some time. In 2005, the Supreme Court ruled in the ground-breaking Metro-Goldwyn Mayer v. Grokster, et al. case that the original peer-to-peer file sharing services, such as Grokster, Kazaa, and StreamCast, could be held liable for copyright infringement, because they had intentionally sought to encourage users to share copyrighted material. All of these services have since gone out of business. But these legal victories, and stronger government enforcement of copyright laws, have not proven to be the magic bullet that miraculously solves all the problems facing the music industry. The music industry has had to drastically change its business model and decisively move toward streaming digital distribution platforms. They have made striking progress, and sales of music in a purely digital format now account for more revenue than sales of music in a physical format. To accomplish this, the music industry has employed a number of different business models and online delivery platforms, including Apple’s iTunes pay-per-download model, subscription models, and cloud- based streaming models.
In each of these new media delivery platforms, the copyright owners—record companies, artists, and Hollywood studios—have struck licensing deals with the technology platform owners and distributors (Apple, Amazon, and Google). These new platforms offer a win-win solution. Consumers benefit by having near instant access to high-quality music tracks and videos without the hassle of P2P software downloads. Content owners get a growing revenue stream and protection for their copyrighted content. And the pirates? TPB and other pirate sites may not be able to compete with new and better ways to listen to music and view videos. In 2015, traffic from the Pirate Bay and its cohorts accounted for 2.76% of Internet traffic during peak hours, compared to 36.48% from Netflix alone. And content pirates don’t appear to be particularly loyal to any of the sites they use; for all its traffic, TPB gets an average of only $9 per day in bitcoin donations in 2016, and even that paltry sum still dwarfs the amounts its competitors receive. Like the real pirates of the Caribbean, who are now just a footnote in history books, technology and consumer preference for ease of use may leave them behind.
Case Study Questions
Why did TPB believe it was not violating copyright laws? What did the Swedish court rule?
How has TPB managed to continue operating despite being found in violation of copyright laws?
How has the music industry reacted to the problems created by pirates like TPB?
The purpose of this assignment is to enable students understand the moral dimensions of Internet society.
Grading Criteria
Content
7%
Style
1%
Submission on time
1%
Word Count
1% Max: 500-600 words
Total
10%
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