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IFPI Boss and CEO Accused of Tax Evasion in Germany

Drew Wilson — Sun, 03 Jul 2011 12:16:29 +0000

The IFPI (International Federation of the Phonographic Industry) may be quick to denounce others for breaking the law when it comes to downloading copyright infringement, but now the shoe is on the other foot. After incriminating documents surfaced about the organization, some very interesting questions about the IFPI are being raised.

High ranking members of the IFPI might be a little more red-faced these days, but not because someone is downloading KISS albums. According to Heise Online (Google translated, original), the IFPI (like a European version of the RIAA) are being accused of tax evasion. Late last month, incriminating documents surfaced (Google translated, Original) about IFPI "boss" Ivo Sacchi and IFPI CEO Beat Högger may have been involved what some are calling "tax fraud". From the translated Heise article:

The reason for the investigation of German tax investigators, the suspect that it is located in the German-owned corporation is a shell company, which primarily served the purpose, the German tax authorities unlawfully withhold income. Should not involve manipulation of documents and business books have arrived, this would also punishable in Switzerland. That IP gate actually a shell company, there are several clues to Swiss media reports: The company was reported, for example, by 2009, as the IFPI in the Zurich Toblerstrasse 76a. Since then, it resides in the power Strasse 30 - an address that refers to the same building. And the next two Högger only employees of the company are two secretaries who work strangely well with the IFPI.

These revelations are largely seen as a black eye for the organization and some wonder if the scandal is isolated to the two higher ups or if others in the IFPI are involved in this scandal. The reports don't suggest that German authorities are investigating, but given how cash strapped some European countries are these days, it might not be too far fetched to think that authorities might be interested in pursuing the case. The IFPI has been known for pushing for things like a three strikes regime in Britain amongst other anti-piracy efforts across a number of countries. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Euro Cops Raid Kino.to, Among Largest Anti-Piracy Raids Ever

Jared Moya — Thu, 09 Jun 2011 18:11:39 +0000

Police in Germany, Spain, France, and the Netherlands carry out joint raid against people suspected of involvement with Kino.to - one of Germany's most popular video streaming site. At least 13 people have been arrested.

Yesterday, police in Germany, Spain, France, and the Netherlands conducted a joint raid against homes and businesses of people suspected of involvement with German video-linking site Kino.to. In Germany alone, the raids involved 250 police officers and tax inspectors as well as 17 different specialists to search 20 homes, businesses, and data centers. 13 people were arrested. Following the raids Kino.to was shutdown and now displays the following message:

The Criminal Investigation indicates the following: The domain was the site chosen by you closed on suspicion of forming a criminal association for the professional commit copyright infringement. Several operators of KINO.TO were arrested. Internet users who illegally pirated copies of films produced or distributed may be subjected to a criminal prosecution.

The raids were a result of a complaint filed by the German Federation Against Copyright Theft (GVU) which called the site a "parasitic business model that was based on systematic violations of copyright and related rights established for the sole purpose of providing all stakeholders permanent income from illegal profits." In a press release, the Dresden General Prosecutor said the action was a result of "suspicion of criminal association for the commercial commit copyright infringement." Unfortunately for those involved with the site it didn't matter to authorities that Kino.to didn't actually host any copyrighted material, but rather linked to third-party sites where it could be found. The fact that that they were making "substantial revenue" from the site, as alleged, GVU, is what the Dresden General Prosecutor seemed to focus on. Authorities have reportedly seized the Kino.to domain name as well as several sites that illegally hosted the copyrighted material that streamed on the site. Kino.to was among the most popular video streaming sites in Germany. In response, supporters of the site have launched a DDoS attack against the GVU site, which at this moment is still down. Stay tuned. jared@zeropaid.com

German Copyright Holders Targeting 300,000 Infringers Per Month

Jared Moya — Tue, 31 May 2011 17:32:37 +0000

German Internet Industry Association ECO says that combined with increasing consumer use of legal download services proves there is no need for ISP-level site filtering legislation that could violate the "basic rights of the population."

According to ECO, the German Internet Industry Association, copyright holders are having a field day in the war against illegal file-sharing as ISPs have been identifying 300,000 suspected infringers per month. It said this increased likelihood of being identified along with an expansion of legal download services have helped to decrease the number of illegal file-sharers by more than 20% since 2008, proving the fight against P2P has been "successful." ECO divulged the figures to make the case that a proposal for ISP-level filtering is unnecessary, especially considering it could violate the "basic rights of the population." "The increasing availability of digital content on the German market shows that one can combat Internet piracy effectively without deep intervention in the basic rights of the population," it said in a press release. "Barrier methods such as by the European Commission planned and advertised last week at the G8 Forum in Paris are unnecessary." Last week the European Commission released a new Intellectual Property Rights (IPR) strategy that combines a mixture of increased copyright enforcement and reform. On the enforcement side the leading cause for concern is discussion of ISP “cooperation” in the fight against online infringement. ECO believes the German method of fighting online infringement has already proven its effectiveness. "First, there is much more legal and user-friendly products than it was several years ago," said ECO president Michael Rotert. "On the other hand, shows the consistent approach on illegal downloads without blocking effect. " Board member Oliver Süme added that a warning letter is usually enough in "most cases" to deter illegal file-sharing, and that settlement letters demanding several hundred euros are "excessive." In any event, US ISPs are nowhere near identifying that many individuals per month. Stay tuned. jared@zeropaid.com [Hat Tip]

Google Fixes Android Public Wi-Fi Security Flaw

Jared Moya — Fri, 20 May 2011 08:08:04 +0000

Flaw allowed hackers to imitiate public Wi-Fi hot spots that the phone has accessed before to capture an authentication token and access user data, and Google responds with Android version 2.3.4 to address the problem.

A few days ago researchers at Ulm University in Germany found that it was “quite easy” for hackers to intercept data from Google’s photo-sharing, calendar and contacts applications, as well as potentially other Google services including Gmail, and already Google says it has "fixed" the problem. The flaw affected Android version's 2.3.3 and older, which comprise 99% of all Android phones currently in use. The flaw worked by allowing unsecured wireless access points that imitate public Wi-Fi hot spots that the phone has accessed before to capture an authentication token. That token could then be used by attackers to access and modify personal data in calendar and contacts, as well as Google photo site Picasa. "The information flaw works particularly well when the network name of a known provider, eg T-Online is similar to [one used prior], " write researchers Könings Bastian and Jens Florian Schaub. If the smartphone was ever associated with the original network, it would "recognize" the service and automatically dial. "Stay away in the near future of open wireless networks is perhaps the most practical advice," they add. The problem may be short-lived, however for Google says the security flaw has been fixed in Android’s 2.3.4 version. "Today we're starting to roll out a fix which addresses a potential security flaw that could, under certain circumstances, allow a third party access to data available in calendar and contacts," said a Google spokesperson. "This fix requires no action from users and will roll out globally over the next few days." For those concerned they may have been the victim of the flaw it's recommended you change your Google account password. "This will render all existing token authorizations for this Particular account useless," said the researchers. Stay tuned. jared@zeropaid.com

Open Licensed Music Movement Gathers Momentum In Germany

Drew Wilson — Thu, 26 Aug 2010 03:38:07 +0000

Open licensed music isn't entirely new. Artists seeing the pitfalls of copyright isn't entirely new either. But what is interesting is to see a German music outlet distribute over 345,000 free songs in one month.

In some music circles, there is the well-founded argument that good music is actually a dime a dozen, the only thing that makes a difference is what is actively promoted thanks to the major record labels stranglehold on the various traditional channels to promote their music. Whether or not this is still holding true in Germany is unclear. What is clear is some impressive numbers coming out of one music service. What is clear is that the free music movement (free as in open license music such as Creative Commons) has been quietly rolling along online for the last several years, gradually gathering steam wherever possible. One sign that the open license movement is gathering steam was when ASCAP attacked Creative Commons not once, but twice. It certainly says a lot when a movement gets this kind of attention from such a well-known organization - even if the attacks against it seem to be ill-conceived. Over in Germany, there is a new sign that open licensed music such as Creative Commons licensed music is gathering momentum. According to German site, Darker Radio, the free music charts for August 2010 topped 345,000 downloads (Google translated). A vast majority of the songs appear to be available on Archive.org and Jamendo - both sites that distribute Creative Commons music. Jamendo is a service that allows users to download music for free under a Creative Commons license through file-sharing networks such as eDonkey2000 and BitTorrent. If the user likes it, they can pay for the music after to help support the artist. Questioning the values of copyright, not to mention the real purpose of copyright, has been a topic discussed in Germany for years. One artist, Der Plan, created a music video that sings how ideas are free and copyright is slavery while blowing up various icons of intellectual property protection back in 2004. The video has been somewhat iconic to the questioning of copyright since its release in Germany. In 2008, another German artist, Johannes Kreidler, composed a 33 second song mashing up over 70,000 songs. As part of German copyright law, a form had to be filled out for each and every sample used and sent to GEMA, a German copyright collective. He filled out each and every single one of the required forms and showed up at GEMAs doors with the whole truckload of papers. Video of the event (German dialogue only): The idea was to not only protest how sampling is handled, but also question the validity of copyright in an internet age. Personally, I think it's things like this that major corporations who profit handsomely off of mainstream artists are deathly afraid of - alternative methods of obtaining music that offers music they don't own or control. Questioning copyright is one thing, but if both artists and consumers start to think that copyright benefits neither artist nor consumer and work to cut the major record labels out of the equation, that has the potential to really impact labels who refuse to use alternative business models. This is not to say something like this happens overnight because many large movements take time to build up. Still, it is interesting to see how much the open license movement has grown over the years in different countries around the world. [Hat tip: Gulli] Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

German Court: Rapidshare Does Not Have to Filter Content

Jared Moya — Fri, 23 Jul 2010 08:13:53 +0000

Scores another victory against copyright holders trying to hold the site liable for illegal file-sharing.

Cyberlocker RapidShare AG has won its appeal of a copyright infringement case brought against it last year by movie distributor Capelight Pictures. The Düsseldorf Regional Court had granted Capelight Pictures a preliminary injunction against the site, but the Higher Regional Court of Düsseldorf has now reversed that decision. The dispute centered around the issue of whether or not RapidShare had undertaken all reasonable measures to counter the illegal distribution of the film Inside a Skinhead, which is distributed by Capelight Pictures in Germany. The court had initially ruled that RapidShare needed to use a word filter however, the court has now decided that such a filter system could prevent people from the legally saving private copies. It also found that RapidShare had no obligation to stop the sharing of download links, and reversed its previous injunction. It said the saving of works that are protected by copyright under their clear work title is admissible for private copies by German law, so that a word filter would also lead to the deletion of lawful private copies. “The ruling is a further step in the right direction," said Rapidshare's attorney, Daniel Raimer. "The previously common practice of copyright holders to sue RapidShare on the off-chance there might be something to be gained from it, misunderstanding the realities it is operating within and showing contempt for its business model, will no longer bear fruit. The newest court rulings in Germany and the USA indicate this very clearly.“ This past April Rapidshare won an appeal of an earlier ruling that it immediately begin blocking the uploading of copyrighted material to the site. The Court of Appeals Düsseldorf found that Rapidshare is not liable for the copyright infringement committed by third parties using the service, and that the site itself doesn’t make copyrighted material “publicly available.” Rather, its business is based on providing confidential access to content. In this case the court determined that a word filter, consisted of descriptive terms taken from the English language, would include the possibility of too high a number of false hits. "We are also pleased with the ruling because it is connected to a claim for compensation of costs," said Christian Schmid, founder and CEO of RapidShare. "Copyright holders should therefore think very carefully in future about whether they wouldn’t prefer to save themselves some time and above all the expense of suing RapidShare for something for which the company cannot be held liable.“ Rapidshare also scored another court victory of sorts this past May here in the US when the District Court of the Southern District of California threw out an application for a temporary injunction against the site that was submitted by the adult entertainment company, Perfect 10.

German Court Holds Internet User Liable for Open Wi-Fi

Jared Moya — Fri, 14 May 2010 14:36:05 +0000

Fines user for failing to properly secure his wireless connection, and allowing an unidentified third-party to illegally download copyrighted material - a sign of things to come in the UK after passage of the Digital Economy Act?

A few days ago, Germany's top criminal court ruled that Internet users can be fined up to 100 euro ($126 USD) for failing to properly secure their Wi-Fi connections in order to prevent third parties from illegally downloading copyrighted material. "Private users are obligated to check whether their wireless connection is adequately secured to the danger of unauthorized third parties abusing it to commit copyright violation," said the court. Thankfully it made the ruling with the caveat that users are only required to password protect their router, nothing more. Expensive equipment upgrades and top of the line encryption methods are not required, only a simple password to "protect" from intruders. The case came about after a music artist sued an Internet user for illegally downloading one of his songs that was later made available on an unnamed P2P network. It turned the person registered with that IP address was away on vacation at the time of the incident, but the court still found him liable for not doing enough to protect his Internet connection from unlawful use by others. It's a sign of things to come in the UK after recent passage of the Digital Economy Act (DEA), which in addition to website filtering, and a “three-strikes” graduated response system for dealing with illegal file-sharers, includes a ban on public access Wi-Fi. It was already reported by UK ISP TalkTalk in a Wi-Fi survey last October that more than 41% of connections in some locations were vulnerable to hijacking and illegal use. "The prevalence of Wi-Fi hijacking will result in innocent people being disconnected,” warned Andrew Heaney, its Executive Director of Strategy and Regulation. Last week's news of simple and cheap USB Wi-Fi crackers being sold on the streets of China should also make people nervous. Trying to prove to a judge that your connection was hijacked by an unauthorized third party may be difficult to prove in a court of law, especially if you lack the resources to do so. None of this will matter to copyright holders however, and the rest of us will have to deal with the consequences. Stay tuned. jared@zeropaid.com

German Appeals Court: Rapidshare Not Liable for User Uploads

Jared Moya — Wed, 05 May 2010 15:40:52 +0000

Wins appeal of earlier court decision that had ordered the file-hosting site to prevent users from uploading copyrighted material, ruling that the links aren't public, and that it's users who are responsible for illegally share copyrighted material with others, not Rapidshare.

The German-owned file-hosting site Rapidshare won a stunning victory in court yesterday, winning its long-running appeal of an earlier court decision that it proactively remove copyrighted material from the site and begin preventing users from uploading it as well. " We are very happy about the judgment. The court has confirmed that RapidShare is not responsible for the contents of files uploaded by its users," says the site. "The judgment shows that attempts to denounce our business model as illegal will not be successful in the long run. With its 1-click-filehosting model, RapidShare responds to legitimate interests of its users and will continue to do so in the future." The Court of Appeals Düsseldorf found that Rapidshare is not liable for the copyright infringement committed by third parties using the service, and that the site itself doesn't make copyrighted material "publicly available." Rather, its business is based on providing confidential access to content. Links to copyrighted files are not made public, and it's the user themselves who make the conscious decision to make them available to others in violation of copyright law. Hence, Rapidshare does not distribute copyrighted material, its users do. The court also took aim at the lower court ruling that ordered Rapidshare to begin proactively remove copyrighted material. It says that a "manual checking of uploaded files is not reasonable for Rapidshare and the automated verification of files is largely inappropriate." It says the reason why is that it wouldn't work. Filtering risks false positives on on a number of levels, that based on file name is "inappropriate" and "arbitrary" , and that based on file type is also "inappropriate" because there's no "compelling indicator" it contains illegal material. Blocking IP addresses was even rejected because it doesn't identify the user responsible for the illegal conduct, only the location where it occurred. Most compelling of of all is that the court cited the fact that the country's Copyright Act allows people to "save a legally acquired copy of (a) film on external servers for private purposes." Whether this person does or does not decide to "reveal the corresponding 'location' in public" is entirely up to him and not Rapidshare. Stay tuned. jared@zeropaid.com [Hat Tip]

Global IP Watchlist on Global Consumer Rights Released

Drew Wilson — Wed, 28 Apr 2010 00:17:49 +0000

The US's Special 301 report which tries to paint several countries as piracy havens has always generated sceptical interest - with increasing emphasis on 'sceptical'. Now a new kind of report which shows human rights with respect to access to knowledge has been released.

Every year, there is always the increasingly controversial special 301 report which targets countries for not tightening down on copyright laws. The report is noted to have significant ties to major record labels and movie studios and their demands on other countries. Now, a new kind of report which the Electronic Frontier Foundation has described as being "created to highlight how countries' laws actually fare in facilitating A2K and to act as a counterbalance to the annual Special 301 Report produced by the US Trade Representative." A2K is short for Access to Knowledge. The report says that "in this survey we use a composite measure of 60 criteria, developed and weighted by experts from around the world. But in simple terms, we are interested in how balanced the country's copyright law is, whether it is enforced in ways that impact consumers' interests, and whether the country fosters the exchange of knowledge in forms that are not encumbered by exclusive rights." In short, how well are your rights protected in different countries with respect to intellectual property laws and knowledge? The report certainly demystifies consumer rights on the world stage and even ranks the surveyed countries by a grading system similar to that of a standard school system grades. The report explains, "A represents a good score, that shows that consumers' interests are being observed in this area. B, C and D are progressively not so good... and F is a fail." As a feature, they ranked the top ten best countries and the top ten worst countries. The report ranked India as the best ranked country for protecting consumer rights while Chile was ranked as the worst country for protecting consumer rights. We looked for countries that have been making their way in to the headlines here and the United States ranked at number four for protecting consumer rights. No doubt, the concept of fair use has played a roll in boosting that countries rankings. The US got a B overall boosted by a strong access to knowledge online, for libraries and the disabled. However, there was room for improvement as the US got a 'D' in the category for administration and enforcement as well as 'c's in education access, press access and freedom to share and transfer information. The fair use regime has been a topic for quite some time in Canada's copyright debate for some time. Many argue that Canada needs a much stronger fair dealings regime as seen in the United States, but Canada wasn't seen on either list. While it's both good and bad news for Canada, there were some interesting highlights in Canada's ranking. Overall, Canada scored a 'C' with high marks for access to knowledge for the press and the disabled. Canada lost major marks for access to knowledge for public affairs, for home users and content creators. Canada even received an 'F' for the category 'Freedom to share and transfer' content. The United Kingdom scored a C- while Sweden, Spain and Australia scored B-'s respectively. France and Germany were not surveyed. The report also noted a few patterns saying, "the category in which most countries bombed out was in ‘Freedom to share and transfer’. This means that no countries are doing very much to promote consumers' freedom to share information and knowledge with their neighbours. They could do better if they devoted resources towards maintaining and promoting public domain material (to which no copyright applies), encouraged the take-up of Creative Commons licences and open source software, and helped to unlock the value of ‘orphan works’." The report further explains, "The category in which most countries did best, on average, was in freedoms to access and use by the press. Whilst that's certainly nice to know, it must be said that this is the probably the single category which has the least direct relevance to consumers." Fair use in the United States was a topic discussed in depth. From the report:

There are many uses of copyright materials that are allowed under US law as ‘fair use’, that would not be allowed under the more specific exceptions of other countries. These include new and innovative uses of copyright works, such as the production of audio and visual collages or ‘mash-ups’, as well as more prosaic uses such as transferring music to an MP3 player, or recording your favourite television show to watch later. Businesses, too, can benefit from fair use – for example, the way in which an Internet search engine operates, by providing short excerpts from websites and thumbnail pictures of images, relies on this exception. The fair use exception of US law is not perfect. Because it is by nature so imprecise, it is difficult to be certain whether a given use falls within the exception or not (in fact, fair use rights have been more cynically described as ‘the right to consult a lawyer’). For this reason CI advocates the adoption of a fair use exception as a supplement to existing more specific exceptions, not as a substitute for them. Fair use, in other words, should operate as a ‘catch-all’ exception, to ensure that consumers do not become unwitting infringers when copyright laws fall behind.

This certainly rings true for Canadians for instance. Supporters for consumer rights have long been advocating that if copyright laws were to be amended, then Canada's "Fair Dealing" regime should be more closely aligned with the United States 'Fair Use' regime, however, lobbyists and others who represent the opposition to consumer rights have long argued against it saying that this move would be a disaster. So really, for as many faults the US has about its copyright system, it at least has a more reasonable approach for use of various works through the system of Fair Use, however many ways it could become undermined by anti-circumvention laws. As an example, just image when satirical examination has been pretty much wiped out of fair use and it would be more in line with Canada's fair dealings because it's much harder to argue parody in Canada for use of copyrighted works.

Music Industry Study Claims Warning Letters Decrease Filesharing

Drew Wilson — Sat, 24 Apr 2010 06:27:33 +0000

There's a German study that was released that suggests that file-sharing is dropping thanks to the warning letters being sent to users.

A study by the music industry claims (Google translation) that file-sharing has dropped from 316 million from last year to 258 million.

"The study refutes the widespread view that it is in sharing users mostly children and teenagers who can not afford the desired products," says association director Stefan Michalk. The parts in pre-release study that is the "typical file sharers" male and 20-39 years old. Among the 10 - to 19-year-olds do not even use each in ten (9 percent), the illegal deals.

The industry argues that this was a clear sign that sending out warning letters is having a clear effect in the file-sharing world. So we decided to take a look at the study (Google translation, original with graphics, but in German) which was apparently conducted by GfK Media. The sample size was 10,000 people being followed for 10 years and representing 63.8 million users. The information was based on, of all things, a survey. With the numbers the German industry tries to show is that most people agree that file-sharing is immoral and that people are leaving the networks entirely. When reading the study, there is one very noticeable thing that is completely absent, how many people are going on to purchase content afterwards. The big question this particular study does not answer is are people leaving unauthorized sources for authorized sources or are they so sick and tired of mainstream content that they are not even bothering entirely? If one wants to celebrate that file-sharing is decreasing in Germany, wouldn't it be suitable to, in the same stroke, praise how authorized sources are increasing in customers? While this study touts a victory, it's, at best, a hollow victory because it shows that the industry has way bigger problems then people downloading illegitimately. When people won't download your stuff for free, that's not only a failure, but a real catastrophe for the industry. The problem would be worse then in France where the three strikes law is actually increasing file-sharing. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.