The Pirate Bay case: Not necessarily a victory for Hollywood

Last week's conviction of the founders of The Pirate Bay did not shut down the filesharing website. Instead, it has boosted the ranks of its supporters and raised awareness of an ideological and legal battle for control of how the Internet is used.

The court ruling handed down one-year jail sentences to each of the four men and assessed $3.6 million in criminal damages. The global entertainment giants that brought the case, including Warner Bros., Fox Movies, Sony Music, and EMI, claimed it as a major victory.

But even as the founders were being sentenced, 10 million Internet users were busy downloading music and movies via their website. And the verdict has been appealed, meaning that the website may remain unaffected for years – and become a standard-bearer for those who argue for a free flow of media and information over the Internet, unfettered by state and corporate control.

"There is a growing social movement around this issue in Sweden. It goes beyond filesharing and downloading free music and movies," says Daniel Johansson, a music and Internet analyst at Stockholm's Royal Institute of Technology. "It includes people who are concerned about surveillance laws and who feel the Internet is being developed by governments and corporations instead of the common man.

"The Pirate Bay," he adds, "has a lot of sympathy right now."

Within three days of the ruling, the Pirate Party – which campaigns for copyright reform – gained more than 15,000 new members, doubling in size to become the country's fourth-largest political party. Several Internet service providers (ISPs), including Telia Sonera, the country's largest, said they would not block The Pirate Bay website and would no longer keep records of any sites visited using their networks, thereby protecting their customers from potential lawsuits.

Why Sweden?

Sweden developed a reputation as a haven for online piracy after it invested in high-speed broadband in the late 1990s and its reluctance to tackle filesharing became clear. The presence of The Pirate Bay, one of the world's largest, most brazen file-sharing operations – its founders held lectures titled "How To Dismantle A Multibillion Dollar Industry As A Hobby" – made the accusation hard to deny.

Until recently, politicians and police chiefs did little to enforce Internet copyright laws, says Jan Rosén, chairman of the Swedish Copyright Association.

"There was a laissez-faire attitude and the main political parties have been very reluctant to take a stance," he says.

That stance may be related to the tradition of openness in the country, he says. "The Internet has been seen as a media that is open and free. Politicians were reluctant to challenge that view. But eventually, criticism from overseas became too embarrassing and the government began to act more forcefully."

Pressure from the global recording industry, as well as the US and Hollywood, led to police raids in 2006. The Pirate Bay's servers were seized, yet the site was back in business within days, using other servers located in the Netherlands. The ensuing publicity doubled the number of users, which eventually reached about 25 million, including more than 3 million registered members.

Ruling being appealed and resisted

Last week's ruling was intended to send a strong signal, says Peter Danowsky, the lawyer representing the recording industry association, IFPI, in a case that sought nearly $14 million in compensation for lost revenue to artists. "The Pirate Bay is one of the most devastating operations from a rights-holder's perspective, not just because of the number of users but also because they are so clearly building and creating [public] opinion in favor of filesharing," he said.

Mr. Danowsky believes the verdict will help turn the tide of public opinion.

"Until now, many disputed whether the website was illegal. Some compared it to a car manufacturer, which cannot be held responsible if drivers don't follow traffic rules," he said.

The Internet providers' refusal to block the website from their networks is tantamount to "siding with the Pirates," argues Danowsky, adding that recording studios may consider further lawsuits to force them to act. Yet as long as an appeal is pending, it is unclear whether they can succeed.

Still, downloaders are facing at least a few more constraints.

Sweden's Internet battles opened on a wider front earlier this month when a tough new law came into force obliging ISPs to reveal the identities of customers suspected of uploading or downloading illegal content.

The day after the law came into force, Internet traffic dropped by a third, and in the months preceding it, tens of thousands began signing up for anonymizing services that hide computers on the Internet. The ISPs' recent decision to stop saving Internet traffic data is a response that will no doubt please many customers.

'A fight for the control of knowledge and culture'

Critics of new Internet legislation reaching statute books across Europe – Ireland recently introduced a "three strikes and you're out" law, banning repeated copyright offenders from the Internet, and France is debating a similar approach – claim that the measures pose a growing threat to personal integrity and will hamper development of the Internet.

"To find out whether people are downloading copyrighted material, you need to control the Internet and sift through all communications," says Rick Falkvinge, leader of The Pirate Party, who refers to the verdict as his party's "ticket to the European Parliament" in next June's elections.

"The establishment and politicians have declared war against a whole generation," he says. "This is a fight for the control of knowledge and culture."

Magnus Eriksson, a spokesman for the Swedish file sharing lobby group Pirate Bureau, a driving force behind The Pirate Bay, echoes that sentiment. "The freedom of the Internet is threatened now in a very real way," he says. "The danger is that the Internet will be turned into just a marketplace for copyright industries and the whole cultural and economic dynamic will be lost.

"Verdicts like this can scare people off developing new Internet networks and services because, if they contain links to copyrighted files, the owners could wind up in court."

Daniel Johansson, at Stockholm's Royal Institute of Technology, says that selling copies of music and movies is outdated in a digital age, and that the future of the entertainment industry lies in selling access over the Internet. He cites the example of bands such as Radiohead and Nine Inch Nails, which have successfully cut out the middle man and sold their music directly to fans.

Stricter law enforcement may even accelerate moves to new models.

"More people are getting scared of downloading illegally now, and they are signing up for paying online services," he says. "We're at the start of a major format shift that will probably last 10 years. New legal services are coming online all the time, and verdicts like this will increase pressure on the industry to start working with them and making content available."