Regulating mediators of internet piracy: P2P websites and cyberlockers

Published date12 August 2019
Date12 August 2019
DOIhttps://doi.org/10.1108/DPRG-05-2019-0035
Pages494-509
AuthorJason M. Walter
Subject MatterInformation & knowledge management,Information management & governance,Information policy
Regulating mediators of internet piracy:
P2P websites and cyberlockers
Jason M. Walter
Abstract
Purpose Contemporary copyright infringement has significantly changed in the digital era, and
because of the unique attributes of internet piracy and method of exchange, traditional regulatory
approaches are ineffective.The characteristics of digital goods enable users to almost costlessly copy
and exchange content. Much of the contemporary research fails to incorporate the necessary
componentsof exchange that are central to digital piracy. Thispaper aims to examine the role of peer-to-
peer networkhosts and the often-omitted cyberlocker.
Design/methodology/approach A simple framework is constructedthat describes how these entities
how these entitiesfacilitate digital piracy and operatefinancially. This framework illustratesthe objectives
of piracy mediators,highlighting the avenues by which regulationcan craft policy. Additional examination
of online piracy highlights the challenges of contemporary policy to combat digital piracy due to the
secondaryconsequences.
Findings Recent policies, aimed at diminishing piracy, would infringe on consumers’ privacy, hurt
business finances orstrategically used by rivals to hurt the operations of legal entities.Trying to prevent
illegal sources (or facilitators)of pirate goods from providing access to filescontinues to be challenging.
In many instances,the blurry line between a legal platform for file exchangeand a piracy haven creates
significant regulatory problems. For known piracy promoters (host sites or cyberlockers), location and
revenuestreams continue to limit direct intervention.
Originality/value This paper discussesthe necessary path for piracy to occur by includingpreviously
omitted agents necessaryfor communication and/or distribution. My analysis incorporatesthese entities
that facilitate piracy and the unique features of digital exchange, which has industrial and regulatory
implications. Furthermore, my results highlight why regulators have been ineffective in crafting
meaningfulanti-piracy policy.
Keywords Digital piracy, Cyberlockers, Information goods, P2P network
Paper type Research paper
1. Introduction
Illegal reproduction and distribution of copyrighted or patented goods is not a new
concept; however, the medium and reproduction technology has changed significantly.
Innovation and technology have forced copyright laws and regulations to evolve.
Regulations outlining criminal penalties for copyright infringement date back to 1897
and provided narrow applications that required infringement to be both “willful” and
“for-profit” (Loren, 1999). Later, iterations focused on organizations profiting from
piracy. The introduction of copy machines and video home system meant individuals
could very easily and privately share copies of protected goods with little concern of
prosecution. Eventually, copyright regulation expanded applications beyond the “for-
profit” requirement. In 1976, the criterion for infringement loosened, dropping the “for-
profit” to “[...] commercial advantage or financial gain [...]” (Circular 92, 2011). The
original 1976 Copyright Protection Act focused on commercial applications of
copyrighted goods, not individual sharing.
Jason M. Walter is based at
the University of Wisconsin
Stout, Menomonie,
Wisconsin, USA.
Received 13 May 2019
Revised 22 June 2019
Accepted 23 June 2019
I am grateful to the editor,
Carys Morley, and two
anonymous referees for their
insightful comments and
suggestions, which led to
significant improvements to the
manuscript. All remaining
errors are my own.
University of Wisconsin-Stout,
441B Harvey Hall, Menomonie,
WI, 54751. Email:
Walterja@uwstout.edu.
The author declares that he
has received no funding for this
research and has no other
conflict of interest.
PAGE 494 jDIGITAL POLICY, REGULATION AND GOVERNANCE jVOL. 21 NO. 5 2019, pp. 494-509, ©EmeraldPublishing Limited, ISSN 2398-5038 DOI 10.1108/DPRG-05-2019-0035
The wide use of computers and the internet further influenced the cost of reproduction by
essentially changing marginal andtransportation costs to zero. The ability to digitize books,
games, software, movies and music created new problems for producers. Illegal
reproductions cost substantially less than authentic copies due to the medium used.
Because of the diminished cost of these digital “pirated” goods, reproduction is end-user
oriented, meaning that a central hub is no longer responsible for reproduction or
transportation (Lianget al.,2005;Dejean, 2009).
In the USA, it was not until the NET Act of 1997, that regulations applied to individuals
sharing goods. The NET Act required only “willfulness” with either “[...] commercial
advantage or financial gain” or “[...] the reproduction or distribution, including electronic
means [...].” (Loren, 1999). The NET Act provided criminal offences for individuals’
copyright infringement or electronic piracy. However, apprehending offenders with a
decentralized network is a significanthurdle, which prevents effective enforcement.
While regulation for downloading digital goods[1] from the internet is decades old, the
identification of individuals or users of illegal copies remains challenging. Identifying illegal
copies requires catching the recipient of the file (the downloader) or the provider of the file
(the uploader or source) in the act of transferring the file. Two main methods of transferexist
synchronous download from uploaders on a Peer-to-peer (P2P) network or asynchronous
download from a cyberlocker. Once the file transfer is complete, detecting possession of
illegal copies becomes impossiblewithout access to a user’s digital files.
Prosecution of online piracy requires catching downloaders/uploaders “in the act” and
recognizing the transfers of piratedgoods creates its own challenges. Identifying transfer of
illegal content would require monitoring online traffic, with similar privacy concerns as the
government announcing it will monitor/read every letter sent through the post office. In the
unlikely event that some type of monitoring becomes politically feasible, two methods exist:
use of third-party surveillance or management by broadband operators (Bridy, 2009).
However, a vast amount of data sent over the internet alone would make this unfeasible.
Even if monitoring traffic were possible, data encryption makes interpretation of the
monitored data impossible.
Other approaches included punishing indirect facilitators of piracy. In the USA, the Stop
Online Piracy Act and PROTECT IP Act attempted to punish search engines and allow
internet service providers (ISPs) to censor a user’s web access (Yoder, 2012). While both
acts failed to pass, their effectiveness would have been limited (Warren, 2012). The
success of streaming has further minimized the discussion surrounding digital piracy;
however, digital piracy is far from eradicated. In 2018, the International Federation of the
Phonographic Industry stated that one-third of music consumers still pirate music (IFPI,
2018). In the movie industry, Herz and Kila
nski (2018) estimate that piracy reduces sales by
4.4 per cent.
One reason that regulation has failed to provide an effective means of curbing piracy is a
failure to understand the mechanism behind digital piracy. The focus of this paper is to
provide a better understanding of digital piracy by examining the mediators of piracy that
acts as the hub between providers and consumers of pirated files. After identifying the role
and structure of these mediators, we examine the effectiveness of previously proposed
regulatory approaches to disruptthe illegal transfer of files.
2. Previous work
Contemporary piracy research primarily approaches digital piracy in three ways, namely,
from a pricing approach, a welfare approach or a regulatory approach. Several articles
(Varian, 2000;Dejean, 2009) discuss how producers of “information” or “cultural” goods[2]
can identify optimal pricing schedules to reduce revenue lost from copying or sharing. In
some cases, the appropriate price schedule increases overall welfare (Cremer and
VOL. 21 NO. 5 2019 jDIGITAL POLICY, REGULATION AND GOVERNANCE jPAGE 495

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