Despite claims from the Australian Record Industry Association (ARIA) that online music piracy hurt sales of music in 2002, it is by no means proven that people illegally download music instead of buying music legally. A survey by ARIA which linked music piracy with decreased sales was disputed by others in the music industry, and some studies have shown that file-sharing may actually contribute to greater expenditure by participants on legitimate music.
The fact that overall music sales dropped in 2002 cannot be solely laid at the door of copyright-infringing online music activities, particularly when it is considered the music industry had experienced several years of strong growth. The continuing high price of compact discs, coupled with newer technologies for listening to music and increased competition from other markets (such as console games and mobile phones) for the consumer dollar have probably played a significant role in the slight drop in compact disc sales last year.
The record companies and Music Industry Piracy Investigations appear to have an end-point in mind, and each case they bring before the courts advances their cause one step further. What is their desired goal? I can only surmise, but I think they appear to be testing the legal framework for trading music online, both legally and illegally.
Much of Australian law is "common law", which refers to the body of legal principles which evolve through the interpretation of law by judges. The record companies appear to be testing common law to assess what sort of legal framework can be created to tackle music piracy.
For example, the first major case brought by the record companies this year was against three universities whose infrastructure had been used to host some copyright infringing material. The point of this legal action was to assert the right of the recording industry to have access to infrastructure if it suspected there was copyright-infringing activity occurring on the network.
The universities challenged the action, citing privacy concerns, but were eventually ordered to allow the record companies access to the desired files. The universities were also ordered by the court to preserve the evidence sought by the record companies until the case was decided – which they failed to do, annoying the record companies no end.
However, a bonus for the copyright owners came when a lawyer representing the universities told the court that, considering the nebulous nature of the Internet, anyone who sought evidence of activities on the Internet would be foolish not to get a so-called "Anton Pillar" order.
An Anton Pillar order allows a copyright holder to enter a premises to search for and seize material that breaches copyright, or at least make copies of it to use for evidence. Importantly, the party being searched is given no warning of the intended raid, and therefore cannot delete any copyright infringing material. Or put forward an argument to the court as to why they shouldn't be raided.
MIPI obtained an Anton Pillar order to raid Internet service provider ComCen, and then sued them for copyright infringement. The case was the first time in Australia a copyright owner had taken an ISP to court for allowing its infrastructure to be used to trade files illegally.
The record companies upped the ante by including two directors and an employee in the suit, although one of the directors has since been dropped from proceedings and the other individuals are fighting the inclusion.
This case is important to the music industry because it will establish whether Internet service providers are responsible for how their networks are used, and whether directors and employees are legally liable for any copyright infringing activity on the network.
The case will also test another principle: Whether the act of hyperlinking to copyright infringing material is itself a crime. ComCen didn't host any of the copyright infringing music files accessed through the Web site in question, and the ISP claimed it was just a search engine akin to Google -- although a more accurate analogy would be a directory, akin to Yahoo.
Whether or not MIPI knew the server didn't host any music files itself became a moot point as the litigious representative of the record companies didn't even pause for breath before declaring that linking to copyright infringing material was also a crime, and they were prepared to proceed with the case. That case is still before the courts, so the outcome is undecided.
The final piece in the music industry's puzzle is the criminal prosecution of three students who were running a Web site distributing illegal music files. The significance of this case is that it was a criminal prosecution brought by the Commonwealth Department of Public Prosecutions, rather than a civil matter brought by the record companies. The defendants plead guilty, but MIPI was not impressed with the suspended sentences handed down.
The upshot of this year of litigation is that there appears to be nothing network providers can fall back on to prevent copyright owners searching their infrastructure for copyright infringing material, and making available copyright infringing music files is a criminal offence. Although the offence was created through legislation in the Copyright Amendment (Digital Agenda) Act 2000, which came into effect in March 2001, the three students were the first to be convicted for that crime.
The record companies are obviously hoping the case against ComCen will create a responsibility for Internet service providers to monitor their networks for copyright infringing activities, although that decision has yet to be made.
MIPI has been involved in other investigations, including a 'sting' operation on jukebox hire companies for using copied CDs in their products, as well as tracking more traditional pirates who sell burned CDs.
So what will the record companies do once they've destroyed the myth that the Internet is a wild-west type frontier with no laws? Hopefully they'll offer their entire catalogue of music online for less than a dollar a song, confident that the database won't be copied wholesale and made available free of charge. If they did that just about everyone would be happy.
Of course, they may make a small selection of their catalogue available for AU$3-5 per song, which I suspect will raise the ire of a lot of people who will then go out of their way to pirate the music.
The major record companies receive no sympathy from the public, or indeed most musicians, and this is unlikely to change if they keep overcharging for music.
