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The costs of file-sharing

Silke Wünsch / slkAugust 29, 2012

A student in the US has been slapped with a $675,000 (539,000 euros) fine for illegally uploading music. German law firms now specialize in file-sharing to take advantage of the lucrative source of revenue.

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Image: picture-alliance/dpa

The US Supreme Court has recently rejected 25-year-old Joel Tenenbaum's appeal against his $675,000 (539,000 euros) fine, leaving the Boston University graduate student with little legal recourse. Tenenbaum admitted to illegally uploading 30 songs to the Internet in 2003, when he was 16 years old. That's $22,500 per song, including songs by famous rock bands such as Nirvana, Green Day and Incubus. 

Big record companies have begun doggedly pursuing file-sharers such as Tenenbaum, people who download music from the Internet illegally and then upload the illicit songs to websites where other users can download them. The case of Tenenbaum serves as a stark warning to file-sharers everywhere. 

File-sharers as felons?

Such draconian punishments are shocking to many observers, though the era is long gone when illegally downloading and uploading music was considered a trivial offense. Some particularly outraged critics claim that file sharers receive harsher punishments than rapists.

Man at computer Foto: Jana Pape dpa +++(c) dpa - Bildfunk+++
File-sharers are increasingly treated as criminalsImage: picture-alliance/dpa

"I wouldn't go that far," Christian Solmecke, a lawyer and specialist in copyright infringement, told DW. "One look at the German law book shows that rape is punished harder. Rape carries a punishment of at least two years imprisonment. With copyright infringements, fines are the norm."

Solmecke's law firm specializes in copyright infringement and even offers a hotline that people can call if they have received a written warning from the music or film industry. At the moment, the law firm represents 16,000 clients accused of pirating.

Intimidation attempts

The 30-year-old Timo (name changed by editor) has run into problems with the music industry. His case is ongoing, so he has asked not to be identified by his real name. Timo has a large collection of music on his computer and has occasionally uploaded a song - for friends.

A law firm sent Timo a letter on behalf of a major record company. The letter accused him of uploading songs by a moderately successful artist to the Internet for free. 

"The letter was pre-printed," Timo told DW. "The signature was a color copy."

The letter also included a long list of similar cases and the resulting sentences.

CD MP3 player (c) dpa - Bildfunk+++
Downloading and uploading music can carry a high priceImage: cc-by-nc-sa-bluepoke

"Apparently they wanted me to see who I was dealing with," Timo said. He was also asked to sign a form pledging that he would no longer illegally download and upload songs. If the signee breaks that pledge, he or she can be prosecuted.

"Before signing such a document, you should always seek legal advice from a lawyer who specializes in the field," Solmecke said. Under no circumstance should you ignore the letter, he said, but instead should find a way to reformulate it.

That's what Timo did. He promised in writing, without making any sort of legal recognition of guilt, that he would no longer make the songs in question available on the Internet.  He subsequently did not hear anything from the law firm or the record company for three years. The statute of limitations in this case lasts three years.

But now, just as the three-year deadline approaches, Timo has begun receiving bills for legal fees from the law firm on a regular basis. In the past few weeks, the fees have risen to extraordinary levels, much higher than what was originally demanded.

"The big joke of it all is that I didn't even have the record that they were talking about," Timo said. "I don't know it at all."

Unholy confusion

Many law firms in Germany now specialize in sending these written warnings on behalf of music companies. With tens of thousands of cases currently open, it's a quick way to make easy money for them.

Many alleged file-sharers submit to payment claims too quickly or sign ominous statements, while others agree to settlements that are much too high. For the courts, it is often difficult to find out whether the law firms even discuss the demands in the letters with the clients they are representing. 

Mistakes also happen regularly. Sometimes the IP address, behind which an alleged file-sharer is supposedly hiding, is not correct. As a consequence, many Internet users fall under suspicion for no good reason.  

Man in suit holding euro bills (c) dpa - Bildfunk+++
Law firms are making big money from file-sharing casesImage: Fotolia/granata68

"In general, one can say that the amount of money that is demanded in these warning letters is far too high," Solmecke said. "The payment claims from the German music industry are not as high as in the US, but the total costs from an unsuccessful legal procedure can still amount to up to 10,000 euros."

In Germany, the courts also decide on a case-by-case basis, with a broad range of punishments at their disposal.

"It ranges from 15 euros per song to 300 euros per song," Solmecke said. "When music albums are being shared, the amount can rise to several thousand euros. Then there are also the legal fees."

Through the back door

But why does somebody who uploads 12 songs have to pay a fine of thousands of euros?

When someone uploads music into an Internet file-sharing network, they are legally required to pay licensing fees, which does not happen during file-sharing. The copyright owner thereby loses money, particularly when the album in question is successful in the charts.

With the warning letters, the record companies can recoup some of the money that they otherwise would not have received. For the courts, it's difficult to calculate exactly how much the music company would have made if the shared record had been bought. After all, nobody knows how many people would have actually bought the music.

Money machine

Lawyers these days are earning a lot of money from file-sharing cases, either by sending warning letters or helping their clients escape the justice system with just minimal financial damage. Many law firms are enjoying a veritable gold rush as they begin to specialize in copyright law to take advantage of the huge profits. The German parliament, the Bundestag, has long been considering how to cap the costs so that the warning letters aren't so lucrative - so far without any results.

Meanwhile, the artists who Timo allegedly hurt by uploading their songs most likely do not know the extent to which their record labels and a few lawyers go in order to make a couple of hundred euros. Under certain circumstances, the artists might even be happy when a person like Timo does a little advertising for them in the Internet. But Timo says he did not willingly advertise for the artist he's accused of wronging.

"Of course I listened to it once," Timo said. "It was complete garbage."