Online piracy: an emergent segment of the shadow economy. Empirical insight from Poland

DOIhttps://doi.org/10.1108/JFC-04-2015-0022
Publication Date04 Jul 2016
Pages637-654
AuthorBogdan Mróz
SubjectAccounting & Finance,Financial risk/company failure,Financial crime
Online piracy: an emergent
segment of the shadow economy.
Empirical insight from Poland
Bogdan Mróz
Department of Management and Finance,
Warsaw School of Economics, Warsaw, Poland
Abstract
Purpose – The purpose of this paper is to investigate the underlying causes, scale and scope as
well as the effects of piracy as a form of the shadow economy throughout Poland, drawing on the
ndings of secondary studies and author’s questionnaire survey conducted in summer 2013.
Design/methodology/approach An online questionnaire survey was accomplished using the
computer-assisted Web interview method and real-time sampling technique, in June 2013. The survey
involved 1,000 persons aged 15 years and older.
Findings Polish consumers use pirated content, products and services primarily for nancial
reasons: 73 per cent of respondents point out to high prices of original products, while more than half (56
per cent) points at low incomes of Polish consumers. A signicant percentage of respondents (over
one-third) indicates the easiness of access to pirated goods and services. The most common activity
among Polish internet users is to copy pirated music les (almost 40 per cent of internet users admit to
that) and lms (including watching the series in the network to which approximately 35 per cent of
respondents confess to). These two kinds of les are also copied the most often – about 20 per cent of the
respondents copy them once a month or more often. One-fourth of the respondents admit to copying
pirated computer programs. The ndings from the survey reveal that young Polish internet users
demonstrate a rather permissive attitude towards online piracy that involves downloading music les
or video and sharing them with other network users.
Research limitations/implications The questionnaire survey did not cover all aspects of
online purchasing behaviour of Polish internet users. The ndings of the survey should be
approached with some caution, given the intricate and sensitive nature of the research
problématique.
Practical implications – Regulations regarding online purchases of goods and services are not
attuned to the digital reality, which is exploited by online intermediaries. The research ndings
highlighted the motivational and behavioural aspects of Poles’ online consumer behaviour, thus
providing useful tips to curb online piracy.
Social implications – The implementation of relevant regulations to ensure respect and protection
for intellectual property rights on the internet in Polish as well as EU legislation has acquired a rare
immediacy and may reduce the scope of online piracy and other manifestations of shadow economy in
the cyberspace.
Originality/value An empirical insight into the online piracy among Polish internet users
providing rst-hand knowledge regarding their motivation and behavioural patterns.
Keywords Poland, Shadow economy, Internet, Online piracy, Product counterfeiting
Paper type Research paper
JEL classication – H3, H26, O17, O34
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1359-0790.htm
Online piracy
637
Journalof Financial Crime
Vol.23 No. 3, 2016
pp.637-654
©Emerald Group Publishing Limited
1359-0790
DOI 10.1108/JFC-04-2015-0022
1. Introduction
Piracy proves to be one of the key segments of the shadow economy occurring in
varying forms and concerning diverse consumer goods (e.g. luxury goods, clothing,
footwear, music, lms and computer software). A spectacular growth of cutting-edge
technologies combined with internet expansion provides new, previously unforeseen
opportunities of unlawfully exploiting the fruits of other people’s labour as well as
producing and distributing pirated content.
Dynamics of shifts occurring in the net, the cross-border nature of internet and the
huge number of transactions taking place in the internet environment give a vast area of
activity for abuses related to copyright infringement, thereby obtaining unreported
income.
According to the PriceWaterhouseCoopers report published in 2013, around 7.5
million Polish people (almost 30 per cent of all internet users) make use of illegal, pirate
internet websites offering copied video content leading to budget losses estimated at
euro 122-170 million annually (PriceWaterhouseCoopers, 2013, p. 21).
This paper attempts to give an account of internet piracy as a form of the shadow
economy across Poland based on available sources and reports coupled with a display of
the author’s ndings from empirical research conducted in June 2013.
The remainder of the paper is organised as follows. Section 2 will focus on the factors
stimulating the expansion of the online piracy in a global context and taking into
account specic Polish circumstances. Section 3 will cover the issues related to the
computer piracy. In Section 4, the ndings of the author’s empirical survey conducted in
2013 will be presented and commented. Section 5 will focus on the attempts to curb
piracy and internet shadow economy in Poland and on the recommendations for
regulators and policy makers. In the nal section, the conclusions are drawn
summarising the author’s point of view and major ndings.
2. Factors conducive to the expansion of internet piracy – in a global
context and with specic Polish determinants
The practice of counterfeiting products manufactured by well-known brands has been
commonplace for a long time. The counterfeited products may be divided into four
categories:
(1) not excessively complicated technical products of commonly recognisable
brands;
(2) expensive products technically advanced, e.g. computer games, entertainment
industry products, vehicle and aircraft parts;
(3) luxury, up-market, prestigious products of well-known and recognised brands,
e.g. brand clothing, accessories, perfumes, expensive gifts; and
(4) products being produced as a result of thorough scientic research and the
application of cutting-edge and innovative technologies, e.g. pharmaceuticals,
computer software, etc. (Mróz, 2011, p. 17).
In the remaining part of the paper, a focus will be mostly brought to internet piracy as
well as its forms and aspects that originate from expansion of new information and
communication technologies.
JFC
23,3
638

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