By Frank Ahrens
Washington Post Staff Writer
Thursday, June 15, 2006
The U.S. government has joined forces with the entertainment industry to stop the freewheeling global bazaar in pirated movies and music, pressuring foreign governments to crack down or risk incurring trade barriers.
Last year, for instance, the movie industry lobby suggested that Sweden change its laws to make it a crime to swap copyrighted movies and music for free over the Internet. Shortly after, the Swedish government complied. Last month, Swedish authorities briefly shut down an illegal file-sharing Web site after receiving a briefing on the site's activities from U.S. officials in April in Washington. The raid incited political and popular backlash in the Scandinavian nation.
In Russia, the government's inability, or reluctance, to shut down another unauthorized file-sharing site may prevent that nation's entrance into the World Trade Organization, as effective action against intellectual property theft tops the U.S. government's list of requirements for Russian WTO membership.
As more residents of more nations get high-speed Internet access -- making the downloading of movies and music fast and easy -- the stakes are higher than ever. The intellectual property industry and law enforcement officials estimate U.S. companies lose as much as $250 billion per year to Internet pirates, who swap digital copies of "The DaVinci Code," Chamillionaire's new album and the latest Grand Theft Auto video game for free.
Such entertainment and other copyright exports -- worth about $626 billion annually, or 6 percent of the U.S. gross domestic product -- are as important to today's American economy as autos, steel and coal were to yesterday's.
More than a decade of hard lobbying by two powerful trade groups, the Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA), has convinced U.S. lawmakers and law enforcement officials that it's worth using America's muscle to protect movie and music interests abroad. Now, lawmakers are calling the trade groups, asking what else Congress and the government can do for the entertainment industry.
Efforts to stem piracy within the United States by targeting peer-to-peer file-sharing networks have produced mixed results. Kazaa -- once the most popular of them and a hard target of the music industry -- has half as many users as it did at its peak three years ago, thanks in part to the music industry's lawsuit and education campaign. At the same time, the total number of peer-to-peer users has grown in the past year, according to Internet traffic researchers.
Overseas, U.S. government officials say, it is in the national interest to work on behalf of Hollywood and other entertainment and intellectual property industries.
The United States does not offer specific dictates on how other nations handle their border controls, said Assistant U.S. Trade Representative Victoria Espinel, "but they need to have an effective intellectual property system for protecting our rights holders abroad."
The U.S. trade representative's office maintains a "priority watch list" of countries that, in its estimate, do not adequately protect intellectual property rights. China and Russia top the most recent list. Unlike the case with Sweden, U.S. government pressure has brought little change in China, home to perhaps the world's most prolific DVD and CD pirates.
An ongoing battle between Swedish authorities and an illegal file-sharing service called the Pirate Bay can be traced to an April meeting in Washington between the Swedes and the U.S. government.
Officials from the State Department, the Department of Commerce and the U.S. trade representative's office told visitors from the Swedish Ministry of Justice in April that Sweden was harboring one of the world's biggest Web sites for enabling the massive and unauthorized distribution of movies, music and games. It uses a file-swapping technology known as BitTorrent that is tougher to contain than earlier systems such as the original Napster, which the U.S. government shut down in 2001, and popular current peer-to-peer services, such as LimeWire.
A little more than a month later, Swedish police hit the headquarters of the Pirate Bay and closed the site. The MPAA crowed, saying it had helped the effort by filing a criminal complaint against the site.
The raid prompted a backlash of criticism in the Swedish press and from some members of government. Politicians and editorialists wanted to know why America was meddling in Swedish affairs.
Claes Hammar, Swedish minister for trade and economic affairs, said U.S. authorities noted that copyrighted Swedish material, as well as U.S. movies and music, was being stolen on the Pirate Bay.
"We don't like to be seen as negligent and losing out rather than cooperating with the U.S. and other markets," Hammar said.
In the aftermath of the raid, members of the Left and Moderate parties in Sweden have proposed scrapping last year's law that criminalized illegal file-sharing, reported the Local, an English-language newspaper in Sweden.
At the same time, hundreds of demonstrators have gathered in Stockholm and Goteborg in recent days, hoisting pirate flags and demanding that the government return the Pirate Bay's seized servers, according to reports.
Several attempts to reach Pirate Bay administrators through the Web site were unsuccessful. They did, however, post a defiant manifesto on a related Web site.
Shut down on May 31, the Pirate Bay moved to the Netherlands and was back up and running three days later, sporting a logo of a pirate ship sinking the word "Hollywood" with a fusillade of cannon fire and demonstrating how difficult it is to stop anything on the Internet.
Dan Glickman, president of the MPAA, confirmed that his group had asked Sweden to toughen its laws on intellectual property theft.
"What we do is look around the world to look if laws need to be improved, then we make suggestions," Glickman said. He emphasized that the MPAA respects the sovereign rights of foreign nations. As for the backlash, Glickman said, "Yes, I'm sure the pirates in Sweden are upset."
Russia's pirates may cost their country more than domestic unrest.
Entrance into the World Trade Organization would grant the country numerous trading benefits. Each of the WTO's 149 members has veto power over accession and each has key demands of applicants.
For the United States, the focus is on intellectual property. And the U.S. wants to make sure the mistake of China is not repeated.
"We let China in and China has not fully complied with the WTO requirements" for protecting intellectual property, Glickman said. The MPAA has an enforcement division in Hong Kong whose members accompany local law enforcement officials on raids. "The time to get action is now, rather than after they get in," Glickman said.
In Russia, CD and DVD pirates have established manufacturing plants on abandoned Soviet military bases, Glickman and RIAA President Mitch Bainwol said. A Web site called Allofmp3.com is selling millions of songs without authorization from copyright holders. The site looks as professional and legal as Apple Computer Inc.'s popular iTunes online music store. It claims to be licensed by a Russian agency to sell music, but U.S. trade groups aren't satisfied. None of the revenue generated from the 10-cent song downloads on the site goes to the artists, Bainwol said.
Moscow began an investigation of Allofmp3.com, dropped it, then picked it back up again after U.S. pressure was applied, said RIAA Executive Vice President Neil Turkowitz, who has traveled several times to Russia and filed criminal complaints with prosecutors there about the site.
"The Russian government is aware of all really existing problems in the [intellectual property] sphere and makes active efforts to solve them step-by-step," the Russian Ministry of Economic Development and Trade wrote in an April paper translated into English. "We will undertake a complex of additional measures in [the intellectual property] sphere in the nearest future with the intention to speed up the work in this sphere."
Two e-mails to the site administrator of Allofmp3.com went unanswered.
Assistant U.S. Trade Representative Espinel said shutting down Allofmp3.com "is right at the top of the agenda. This is a top-priority issue in terms of our discussion with Russia and the WTO."
As the bilateral talks with Russia continue, congressional leaders are bringing pressure to bear on President Bush, who has vowed to speed that nation's entry into the WTO. Working against Russia, the lawmakers say, are its plans to make intellectual property rights violators subject to civil, rather than criminal, penalties.
The U.S. government and the entertainment industry have a right to raise such issues with foreign nations, the RIAA's Turkowitz said. Movie and music piracy, he said, "is a problem that really doesn't know any borders."