Resource: The Pirate Bay: Searching for a Safe Haven Case Study
Read The Pirate Bay: Searching for a Safe Haven Case Study on page 46 in Ch. 1 of E-commerce 2015.
Prepare a 750 word analysis that includes the following:
•Identify the key problems or issues in the case, and describe the legal, ethical, and regulatory issues at stake.
•Explain the effects that customer demand and the unintended use of a product or software can have on SCM and e-commerce practices.
•Assess the impact of illegal websites and software/media piracy on e-business procurement processes.
•Apply one or more concepts discussed in class (covered in the readings or learned from your own experience) that would apply to the case, and provide potential solutions for the problem(s).
Cite a minimum of three resources in addition to your textbook to support your argument.
Format your paper consistent with APA guidelines.
1.4 CASE STUDY: The Pirate Bay: Searching for a Safe Haven
The Pirate Bay (TPB) is one of the world’s most popular pirated music and content sites, offering free access to millions of copyrighted songs and thousands of copyrighted Hollywood movies, television shows, and video games. It claims it is the world’s largest BitTorrent tracker. In April 2014, TPB reported that it had processed its 10 millionth torrent upload. As of June 2014, it claimed to have over 6 million registered users, and according to Alexa.com , a site that tracks Web usage, was one of the top 100 Web sites in the world in terms of global traffic, with about 20% of the visitors coming from the United States. It even has a Facebook page and Twitter feed. 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. 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 permit such networks to exist in the first place. Instead, TPB simply provides a search engine that responds to user queries for music tracks, or specific movie titles, and generates a list of search results that include 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 networks 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 Web site 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.
SOURCES: Thepiratebay.se, accessed July 30, 2014; “The Piratebay.se,” Alexa.com , accessed July 30, 2014; “Pirate Bay Launches Mobile Site, Teases More Expansion,” by Ernesto, Torrentfreak.com , July 24, 2014; “Pirate Bay Co-Founder Peter Sunde Arrested Years After Conviction,” by Natasha Lomas, Techcrunch.com , June 1, 2014; “The Pirate Bay and the Business of Piracy;” by Leo Sun, Fool.com , May 21, 2014; “Pirate Bay’s Anti-censorship Browser Clocks 5,000.000 Downloads,” by Ernesto, Torrentfreak.com , May 16, 2014; “The Pirate Bay Celebrates Its 10 Millionth Torrent Upload,” by Dennis Lynch, Ibtimes.com , April 24, 2014; “Google Asked to Censor Two Million Pirate Bay URLs,” by Ernesto, Torrentfreak.com , April 20, 2014; “Singapore Proposes Law to Block Sites such as Pirate Bay,” by Aloysius Low, Cnet.com , April 7, 2014; “Pirate Bay Docks in Peru: New System Will Make Domains ‘Irrelevant,’” by Andy, Torrentfreak.com , December 12, 2013; “MPAA Still Hunting For Cash as Pirate Bay Financier Set to Go Bankrupt,” by Andy, Torrentfreak.com , June 10, 2013; “Pirate Bay Founder Submits Emotional Plea for Pardon,” by Ernesto, Torrentfreak.com , July 7, 2012; “The Pirate Bay Evades ISP Blockade with IPv6, Can Do It 18 Quintillion More Times,” by Sebastian Anthony, Extremetech.com , June 8, 2012; “World’s Biggest Ad Agency Keelhauls 2,000 Pirate Sites,” by Natalie Apostolu, The Register, June 14, 2011; “Internet Piracy and How to Stop It,” New York Times, June 8, 2011; “The Pirate Bay: Five Years After the Raid,” by Ernesto, Torrentfreak.com , May 31, 2011; “The Protect IP Act: COICA Redux,” by Abigail Phillips, Electronic Frontier Foundation, May 12, 2011; “Pirate Bay Keeps Sinking: Another Law Suit Coming,” by Stan Schroeder, Mashable.com , June 22, 2010; “Pirate Bay Sunk by Hollywood Injunction For Now,” by Charles Arthur, The Guardian, May 17, 2010; “British Put Teeth in Anti-Piracy Proposal,” by Eric Pfanner, New York Times, March 14, 2010.
TPB has 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 TPB, or link to TPB, no matter where in the world its servers are located. In 2013, authorities shut down TPB’s top-level domains in Sweden, Greenland, and Iceland, but TPB has continued to try to operate by hopping from country to country, moving to Saint Maarten, to tiny Ascension Island, to Peru, and back again to Sweden.
In 2014, TPB has proven as elusive as ever for law enforcement, although co-founder Gottfrid Svartholm Warg is now in prison in Denmark, co-founder Peter Sunde was arrested after years on the run, and is expected to begin serving an eight-month prison term for copyright violation, and the company’s financial resources have begun to run dry. As interest has continued to accrue on financial penalties previously levied on TPB, Carl Lundstrom, the site’s primary financial backer, has declared bankruptcy. Consistently relocating operations from country to country costs money.
However, TPB has developed a Firefox-based browser it calls PirateBrowser that uses the Tor network and allows users to bypass ISP filtering and access blocked Web sites. As of May 2014, it has been downloaded by more than 5 million users. In addition TPB is developing a P2P BitTorrent browser application that will let its users distribute and store the site and others on their own computers without having to access a central host. Once it releases this application, TPB will no longer have a central location for attack, and piracy enforcement efforts may become even more difficult. In July 2014, it launched a mobile version that it calls The Mobile Bay. It also plans to develop separate television, music, and movie sites, all in an effort to make it even more resilient than it has been.
TPB has caused England, France, Malaysia, Finland, and the United States to consider strong intellectual property protection laws that will prevent domestic search engines and ISPs from linking to infringing sites, or resolving their domain names. In addition, the world’s largest advertising agency, GroupM, has put TPB and 2,000 other sites on its blacklist of copyright infringing sites where it will not buy advertising space.
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 towards digital distribution platforms. They have made striking progress, and, for the first time, in 2011 sales of music in a purely digital format accounted for more revenue than sales of music in a physical format. To do so, the music industry employed a number of different business models and online delivery platforms, including Apple’s iTunes pay-per-download model, subscription models, streaming models, and now music in the cloud.
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 are benefitted 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. 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.
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