Information Systems Management Project

O

Cyber-laws: Issues for Global Economy (India Vs Globally)

Submitted to

Dr. Preeti Khanna

In partial fulfilment of the requirements of the course

Information Systems Management

By Group o. 9 1. Shrey Agarwal (D-2) 2. Vinay Arun (D-6) 3. Archana Ashar (D-7) 4. Apar Bansal (D-11) 5. JayKaran Singh Chadha (D-20) 6. Deeksha igam (D-40) 7. Shwetank Sharma (D-55)
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Table of Contents

Abstract ...................................................................................................................................................4 1. a. b. c. d. e. 2. a. b. c. d. 3. 4. a. b. c. 5. 6. a. b. c. d. 7. a. b. c. 8. 9. 1. 2. 3. 10. Introduction .....................................................................................................................................5 Need for Cyber Laws ..................................................................................................................5 Cyber Legislations Worldwide .................................................................................................... 5 Cyber Laws in India ....................................................................................................................5 Digital Media Piracy ...................................................................................................................6 Company Analyzed .....................................................................................................................6 Problem Statement ..........................................................................................................................8 Indian Context .............................................................................................................................8 Understanding the Piracy Ecosystem ..........................................................................................8 Factors Impacting Piracy: Global and Indian ..............................................................................8 Effects of Piracy ..........................................................................................................................9 As-Is To-Be Analysis ....................................................................................................................10 Business Solution ..........................................................................................................................11 Pre Crime Stage .........................................................................................................................11 Crime Stage ...............................................................................................................................12 Post Crime .................................................................................................................................14 Global Impact of Piracy ................................................................................................................15 SWOT Analysis.............................................................................................................................17 STRENGTHS ............................................................................................................................17 WEAKNESS .............................................................................................................................18 OPPORTUNITY .......................................................................................................................18 THREATS .................................................................................................................................18 Challenges .....................................................................................................................................19 People ........................................................................................................................................19 Process.......................................................................................................................................19 Technology ................................................................................................................................19 Cost Benefit Analysis ....................................................................................................................20 Actual Scenarios ............................................................................................................................21 HADOPI (France) .....................................................................................................................21 BAIDU (The google of China) ..................................................................................................24 Facebook & Google: Internet Intermediaries under Indian Law...............................................25 Future Scope & Conclusion ......................................................................................................28 2

..................................................................................................................20 Figure E Reduction in P2P use .....................................................................................................26 3 ........ References ...................................................................11.....................................9 Figure B Business Solution .........................................................................23 Figure F India's potential ..........................12 Figure D Source: SSKI Media Research..11 Figure C Growth of subscriptions .................................................................................................................................................................................... 2007 ....................................................................................................................................................................29 Figure A How piracy works .................

digital piracy remains a critical barrier to growth and investment by record companies. is now needed to deal with the problem of piracy. anonymity. The digital music sector is pushing the limits of consumer choice. according to IFPI/Nielsen. Digital channels have overtaken physical formats to become the dominant revenue stream in the world’s largest market. Despite the big steps forward of 2011. its borderless expanse. namely ‘Cyber laws’. rapid technological advancements. The unique features of the internet.Abstract The Information Technology age has led to the emergence of a dynamic and highly specialized field of law. More than a quarter of internet users globally (28 per cent) access unauthorized services on a monthly basis. The digital music market is poised to further expand its reach internationally in 2012. from advertisers to search engines. 4 . The report also deals with the battle against digital media piracy and the various cyber laws and business solutions that exist to deal with this issue. we analyze the cyber laws from a global perspective particularly in the digital media sector. speed of communication & data transfer have posed multiple challenges to legislators of different countries who strive to adapt their existing laws for application in cyberspace or develop new laws to govern the virtual world. the US. In this report. Cooperation from a far wider circle of technology and business partners. extending its business models and reaching out to consumers across the globe. particularly.

many countries have also reviewed their respective domestic criminal laws so as to prevent computer related crimes. Cyber laws constitutes rules and regulations that govern the cyberspace. Sweden. However. As like 5 . The legislations enacted by different countries cover only few of the classified computerrelated offences. and cultural scenario of the corresponding time. Denmark. Australia. there is a need for awareness and enactment of necessary legislation in all countries for the prevention of computer related crime. Cyber Laws in India Keeping in line with other countries. Thus. Spain. Greece. Though India has a detailed and well-defined legal system in place. Canada. statutes. economic. India. looking to the dynamic and fast changing technology. France Germany. UK. Portugal. c. The rapid development of Internet and Computer technology globally has led to the growth of new forms of transnational crime especially Internet related. Switzerland. India also has passed its first cyber law. social. Turkey. Italy. Some of these countries are USA. no country has fully resolved all the issues such as legal. but at the time of enactment of Indian laws nobody could really visualize about the Internet. The Information Technology Act 2000. eed for Cyber Laws The expression ‘Cyber laws’ encompasses the legal matrix of cases. These crimes have virtually no boundaries and may affect any country across the globe. which aims to provide the legal backbone for enabling ecommerce in the country. Japan. We must remember that all the existing laws in place in India were enacted keeping in mind the relevant political. enforcement and prevention of crime. provide such access. However. Finland. However the arrival of Internet resulted in the rise of new and complex legal issues. use this space and create hardware and software which enable people to go online to experience this world. new types of offences may pop-up frequently. Cyber Legislations Worldwide To meet the challenge posed by new kinds of crime made possible by computer technology including telecommunication. To put it simply. Austria. Territorially based law-making and law-enforcing authorities find this new environment deeply threatening. Malaysia and Singapore. b.1. Introduction a. regulations & legal principles that affect persons and institutions to control entry to cyberspace.

the promise of wireless broadband. is another factor complicating the issue as a whole. Security measures continue to be developed. It is a US$ 11 bn industry growing at a CAGR of 18%. The international nature of piracy. Digital Media Piracy The Media and Entertainment (M&E) business in India is one of the fastest growing segments of the economy. d. widespread piracy is the biggest factor undermining the growth of the digital music business. The battle against online piracy. with early software manufacturers attempting novel security features to stop people from making illegal copies of their software. e. digitization of film distribution. or at least electronic piracy. as do the techniques used to break them. 95 percent of the music downloaded via the Internet is pirated. growing internet use are all prompting strategic shifts in the way companies work. and the fact that different countries have very different laws about it. nor the fight against it seems likely to go away anytime soon. aggregating and disseminating outstanding 6 . has been going on since before there was an Internet. However. India's first integrated global media and entertainment Company. The entire UTV focus is on creating. Worldwide. has seen recent expansion. The industry landscape is now undergoing a significant shift. Company Analyzed UTV Software Communications Ltd (UTV).the rest of the world. Neither piracy. the existing laws of India also could not handle the various cyber space activities. Cable digitization. the industry federation says. and distribute copyrighted material freely. Traditional business models are evolving for the better as a host of new opportunities emerge. As such the need arose for a Cyber Law. increasing DTH penetration. both in existing businesses and into new growth sectors.

technology resellers and general consumers.content. UTV is a diversified media and entertainment company with content creation abilities across platforms and genres.2 billion over the next two years to create a combination of Internet space with a portfolio of 10 portals targeted at specific need groups.1. The company plans to invest around Rs. Motion Pictures Games Content Interactive Broadcasting UTV Verticals TV Content The company has acquired a controlling stake of 76 percent amounting to Rs. 7 . India's leading online infomediary that focuses on technology markets.150 million in IT Nation. covering enterprises.

like DesiTorrents. Factors Impacting Piracy: Global and Indian Factors Impacting Piracy Market Need Business Environment Political & Regulatory Lack of Consumer Awareness Accessibility Profitability Legal Framework Product Pricing Technology Law Enforcement Ease of Content Acquisition Industry Support 8 . No suits against Indian P2P sites. Indian Context India is well behind the curve when it comes to fighting digital piracy. Understanding the Piracy Ecosystem c. adherence to prevent piracy in the media sector and generate the revenue lost to piracy? b.2. outside India. Infringing sites are hosted DCTorrent. DCTorrent have been filed till date. Problem Statement a. conferring some protection from the relatively disorganized international protection enforcement efforts of Indian rights holder The problem: How can India enforce copyrights holders.

Effects of Piracy Figure A How piracy works 9 .d.

it removed > 15 million tracks. rights holders in the UK were in discussions with the govt. As-Is To-Be Analysis TO-BE (I DIA) EXAMPLE (GLOBAL) Jan 2011.3. Singapore. due to its robust legal framework and no corruption. the City of London Police and payment providers has prevented 62 illegal websites in Russia and Ukraine from abusing payment since March 2011 In May 2011. improving security of promotional copies of new music. and search engines on a draft code of conduct for prioritization of legal sites in search results & online advertising A partnership between IFPI. and if a leak happens. 10 STAKEHOLDER AS-IS(I DIA) Websites Search engines are linked to unauthorised content or sites which regularly infringe copyright Search engines should link to legal music Payment Providers No action against Illegal Sites Payment providers need to act on illegal sites Hosting Providers Enable websites to illegally distribute copyrighted material Need to block illegal distribution of copyrighted content Consumers Low Awareness More consumer awareness and action needs to be taken Government In spite of The Indian Information Technology Act and other initiatives taken up by individual states. In 2011. no strict l legal framework or enforcement is currently happening Urgent need to strengthen Indian Copyright and cyber law enforcement . Fear of the law of the land is the most effective tool to fight piracy. in spite of its proximity to Malaysia. it removes the infringing links online. a court in Luxembourg ruled against a leading hosting provider for providing services to illegal websites IFPI works with its member labels to prevent leaks occurring. has piracy levels at 30%.

U2 11 . Business Solution The biggest crisis that media companies face today and that can be addressed by an effective legal structure is the piracy issue. Hence. Blueprint to fight piracy in the media sector Stakeholders involved Techniques used Actions performed Government/Legal Review and update laws that enable criminalisatio n of piracy Increase consumer awareness. Pre-crime involves activities that enable the facilitation of piracy. manager. The social problem primarily gives rise to the belief that it is acceptable to download content for free when it is easily available. a social problem and a technological problem. Ineffective cyber laws can facilitate creation of channels to create and deliver 1 Piracy: improved cooperation from online intermediaries by Paul McGuinness. The crime stage is the carrying out of the act and the post-crime stage is where prosecution and follow up occurs. The problem has been identified to be occurring in three stages. a solution has to be a multi-pronged approach and it is seen that such approaches have worked1. The solution proposed here takes into account all the stakeholders that are affected by the piracy issue. The technological problem gives rise to the ease and anonymity that pirates use to carry out pirate activities. Provide legitimate alternatives Music Industry (Awareness and Education) Awareness Campaigns Legitimate services ISPs to monitor and warn infringing subscribers Artists/publishers to provide infringer details to ISPs for action ISPs Artists. Piracy can be viewed as a combination of two problems.4. Pre Crime Stage In the pre-crime stage the major stakeholders are the players in the media sector and the government. Publishers & Search engines (Monitoring and Reporting) Graduated Response Website Blocking Database of violators maintained Legal Department Prosecution and rights enforcement Payment Gateways Legal Prosecution Sanctions On transactions Figure B Business Solution a.

The solution proposes at this stage to carry out awareness campaigns by both ution stakeholders. As technology changes both laws and services to consumers must keep up. which This scale makes it very difficult to deal with piracy. The government should emphasis the illegality of piracy and the media players must emphasis the availability of legitimate sources through these awareness campaigns. The subscriber is made aware of the possibility of prosecution. Peer).pirated content. Figure C Growth of subscriptions b. 2 Digital Music Report 2012. IFPI 12 . A major problem has been the scale to which piracy takes place. The ISP can also throttle the bandwidth to the subscriber. The internet and ease of information sharing has made it very easy to propagate piracy especially through P2P networks (Peer-to-Peer). This IP address is then mapped with the ISP’s subscriber list to identify the subscriber. Graduated Response This is carried out by the ISP (Internet Service Provider). It has been seen that nations that have implemented such an approach have seen positive results2. These are continuous process and the activities column describes how this has to be performed. The ISP then calls the subscriber with a first warning that informs the subscriber of the illegality of the usage. If no improvement is seen the ISP will inform the concerned authorities. All these activities are performed with due regard to the privacy of the subscriber. The ISP identifies IP addresses which are downloading illegal content. The solution proposes to use two techniques that have shown progress in the countries where they have been implemented. Crime Stage The crime stage is when the act of piracy actually takes place. If violation is observed again the s calls are repeated.

IFPI 13 . the biggest torrent site in Italy.In Germany. scanning and blocking questionable websites has also shown to be effective in countries that have used the technique. usage of the service fell dramatically and it is still down by 74 per cent (IFPI/Nielsen). In Belgium. It is known that most search engines readily yield results of 3 Digital Music Report 2012. in September 2011. The website blocking technique requires that the internet is scanned for questionable websites that illegally distribute content. Once the blocking order was passed. In South Korea. In Italy. ISPs were ordered to block access to The Pirate Bay in February 2010 . A similar pattern is found on receipt of the second n notice. Data from comScore shows that this reduced the service’s audience by 84 per ce between August cent and November 2011. 14 per cent of P2P users aware of it claimed their behaviour had already changed • Most P2P users that had already changed their behaviour as a result of the law (62%) avoid particular unauthorised services altogether • New legal measures have the ability to significantly impact P2P as seven in ten users claim they would stop on receipt of a notification with a sanction attached Website Blocking Along with the graduated response technique.at the time. February 2011). 81 per cent of consumers that download media content illegally believe that warnings with the prospect of consequences would make people stop their illegal activity consequences (GfK. with 70 per cent of users ceasing to use their account to infringe.”3 Consumers heed graduated response: Ipsos MediaCT findings in New Zealand (August 2011) • Half of all online adults aged 15-50 agree that 50 internet suspension or fines for repeatedly downloading content without the copyright owners’ permission are acceptable • Although the law was not yet in place. the Antwerp Court of Appeal ordered ISPs Belgacom and Telenet to block access to The Pirate Bay by way of domain name service blocking. government officials report that 70 per cent of infringing users stop their activity on receipt of a first notice.

these websites if searched for. MasterCard etc. Eventually piracy will be reduced to a great deal using such an approach. Apart from the ISPs. c. Post Crime Once crime has been established and identified. In Ireland. Payment gateways like VISA. hence search engines can be used as a way of finding such sites. October 2011). It will need a continuous process and the first few stages of implementation will see illegal sites shut down and new ones mushrooming. A law that mandates responsible behavior on part of search engines will be very effective in blocking out illegal websites. Search engines can and should play a big role here by not featuring illegal websites as search results. Harris Interactive found that 23 per cent of consumers regularly download music illegally using Google as their means to find the content (September 2010). This database should ideally be at the ISP level with a protocol in place for prosecutors to have access as the need arises. The trick however is to involve multiple stakeholders. Further research in New Zealand by Ipsos MediaCT (August 2011) also highlighted that search engines direct a significant number of users to unauthorised sources. this figure was 49 per cent (Ipsos MediaCT. artists and media distributors must also be able to play a role in scanning through a complaint mechanism. Web hosting providers must also play a role in the post-crime scene by pulling down websites of violators. It is also recommended in this solution that a database of violators be maintained to identify repeat violators and take quick action. Special courts can help with this regard. must deny services to accused entities. 54 per cent of users of unauthorised downloads said they found the music through a search engine. this can go a long way in hampering the activities of pirates. but this is not sustainable in the long run. Advertisers must also refuse to advertise with such websites. With such a comprehensive situation in place the legitimate media industry can successfully fight piracy. laws must be in place to be able to quickly prosecute the violators. 14 . Advertising is also a beg source of revenue for pirates.

Greece: With a physical piracy rate of 50 per cent and legal sales falling by a fifth in the past five years. Organized crime networks are playing an ever-increasing role in the black market trade in music. Indonesia: A major source of imported pirate discs in Australia. Global Impact of Piracy Brazil: One billion tracks were downloaded or swapped illegally on the internet in Brazil last year. It is hoped the new government will take intellectual property more seriously. The judicial system is weak and the Fiscal Police remain largely inactive in the fight against piracy. Indonesia has failed to control its optical disc plants. An Intellectual Property Taskforce was established in March 2006 and it is hoped this may lead to a coordinated response to enforcement that has so far been lacking. The government’s recent anti-piracy laws and increased police action may help. Italy: Italy is one of the biggest sources of piracy in Western Europe. It is hardly surprising against such a backdrop that the music industry has lost 80.000 jobs in the country since 1997. There are more than 40 plants in the country and half of them are not even registered with the Ministry of Industry as required. The previous government failed to fulfill its long-standing pledge to ratify the 1996 WIPO Treaties. Canada: Outdated copyright laws have helped digital piracy flourish. while the physical piracy rate was 40 per cent.5. There are signs though that the newly formed National Anti-Piracy Council is starting to make an impact. Greece is a new priority country and one of three priority countries inside the EU. At 15 . The country also has 64 million broadband lines which is facilitating a rapid growth in digital piracy in a culture where paying little or nothing for music is ingrained. but the problem is so big it will need a concerted and continuing campaign to have any effect. with over one billion songs being downloaded illegally in 2005. Annual retail sales of music fell by 42 per cent 1999-2005 and 20 per cent of music industry jobs have been lost. China: The largest producer of pirate discs in the world with a physical piracy rate of over 85 per cent. The government has made positive noises about protecting intellectual property but they need to be translated into hard action.

but a more sustained and widespread approach is needed. Internet piracy is beginning to take off however with nearly 500 million tracks downloaded illegally in Spain last year. which sell music around the world without the permission of or payment to rights holders. The government’s antipiracy campaigns remain sporadic due to the lack of a centrally coordinated enforcement agency. Spain: Major police actions have led to a small significant reduction in physical piracy. The authorities have been working with the industry to tackle physical piracy. The Spanish government needs to close loopholes in its antipiracy laws to take action against digital piracy. South Korea: Internet piracy is rife in South Korea so it is not surprising that revenues from legal music sales have halved in five years. At the same time. the country also has a developing digital piracy problem with 2. Russia has a lamentable record of prosecuting the criminals behind this trade with only one in four cases resulting in a prosecution. 16 .the same time. Mexico: There were nearly 110 million physical pirate products sold in Mexico last year. such as allofmp3. Digital piracy is also beginning to take-off with more than 570 million tracks being downloaded or swapped illegally in 2005. the country is host to a large number of copyright infringing websites.com. New technology has enabled the establishment of digital broadcasting services that transmit high-quality music videos to mobile phones via satellite without the rights holders’ permission.7 million illegal music file-sharers. although the rate remains unacceptably high (22%) for the sixth consecutive year. Russia: One of the major sources of pirate discs found across Europe.

Till date ISP’s have been protecting their customer. Consumer will be more aware of their action and know about the consequences because in most cases they don’t know that they are breaking law. a. This dedicated cell led by a retired SP of the state(currently led by Mr. But by including the ISP’s in the cost structure of system and forcing ISP’s in implementing in second stage will significantly reduce piracy • • Solution is in sync with worldwide measures that are being taken Sharing of information between various players in the industry would go a long way in consolidating and replicating successful initiatives. the Andhra Pradesh Film Chamber of Commerce has created an Anti-Video Piracy (AVP) cell since May 2005. which would benefit all players in the long run. So by educating them about the lawsuits and advantages of using services from legal websites it is helping the music industry as well as consumer. Keshava Reddy) along with 59 other retired police officers works in tandem with the Government and the law enforcement agencies to fight piracy 17 . SWOT Analysis After looking at various steps taken by companies and governments in various countries this solution has been proposed. As an illustrative. STRE GTHS • • The solution takes the positive part and tries to minimize the negative impact The solution is more progressive in nature: o It talks about educating the consumers.6. Companies want the piracy to be reduced but they also don’t want to lose the customers. Due to piracy government is also losing revenue. Consumer will get better product and services. Companies will get more revenue and will look to improve their services • Working in collaboration with government: o Government needs to play the part in controlling piracy at each stage. Since downloading from illegal sites results in only black money. The owner of the illegal sites doesn’t pay any taxes • Forcing ISP to maintain database: o The following step helps in tracking the people who are doing illegal activities.

Implementation of the law is more important than just laying down them and has to constantly invest in infrastructure so as the solution works d. Today DRM is available as one form of technology but it increases cost of product substantially • Government needs to keep assessing the Cyber law. OPPORTU ITY • • The solution has a scope of improvement With time it is needed to give better IT infrastructure to agencies monitoring piracy. Majority part (75%) of the cost they have to give in the initial stage when they are just starting. WEAK ESS • Solution wants partnership between company. Only way block the website • New ventures or startup have to bear the cost of the solution. government. THREATS • People involved in illegal works will try to find other ways to do piracy. They will try to find loopholes in the system and exploit them for their gain 18 .b. And add new features if conditions of market demand. If any of them doesn’t perform its duties then the solution may not be effective • Cyber laws are not uniform throughout the world so it is difficult to catch hold of website owner outside the country. ISP’s and customers. They needed regular investment in R&D for improvement in technology. This makes the venture more expensive • IT infrastructure cost of ISP increases and their liability also increases c.

payment providers. The loss is both in terms of monetary as well as creativity. ISP. freedom of expression. As pirates find newer and cleverer ways of pirating. Technology Stakeholders like search engines. c. ISPs and legitimate service providers have a huge role to play. etc. Challenges a. The real challenge for the local legislators will be to protect the intellectual property by introducing reasonable remedies and proportionate measures. Educating people about the benefit of using services that are legal is important.7. People The biggest challenge is the people themselves. Process It will also be crucial to support education programs finalized to promote the respect of intellectual property rights which often are not perceived as a product of an industry but as a good infinitely available and transferable without any particular restraint or fee.) and in general to adopt a prudent strategy which takes into consideration the different interests of all the parties involved: content industry. Making people realize downloading from illegal sites is equivalent to stealing will be a challenge. search engines. 19 . Technology must be able to address the anonymity of P2P networks that are today the biggest platform for pirated content. The sharing of technological resources among the stakeholders is of importance if a database of repeat offenders is to be maintained which is an integral part of the solution proposed. They need to realize the loss due to piracy. b. The engagement between stakeholders mentioned in the solution will have to be streamlined through a predetermined process with everyone’s signoff. end users. content technology must keep pace and be able to track and block such illegal services. etc. The goal should be to strike a balance between the fundamental rights involved (privacy.

8. the enforcement of these laws allow the perpetrators of this crime to get away scot-free. Awareness campaigns assumed to cost 5% of incremental PAT 3. Infrastructure cost Rs 25 lakhs 5. 64% of all music which is downloaded is illegal and even though the Indian government is making serious efforts to counter this intellectual property theft.000 per month 4. Cost Benefit Analysis India is one of the top countries in the world facing a threat. 2007 (Figures in I R million) Source: UTV financial statements Assumptions: 1. Figure D Source: SSKI Media Research. Due to this rampant piracy. the lack of proper patent laws or more correctly. jobs are lost and research and innovation never takes place. with the music industry losing between US$600 billion and US$650 billion a year due to piracy. Miscellaneous cost Rs 10 lakhs 20 . 30. the government is deprived of tax revenues. 65% of the 38% loss in the industry is been assumed to be recoverable 2. Monitoring cost is of 3 employees at a salary of Rs.

To date there have been more than 700. The agency is vested with the power to police Internet users and is headed by a board of nine members. HADOPI may initiate a 'three-strike' procedure: 21 . The “Creation and Internet” law established a new agency.500. HADOPI. HADOPI (France) Situation Overview France became the first country in Europe to introduce graduated response legislation.9. HADOPI can notify a criminal court. which sends notices to internet subscribers whose accounts have been used to infringe copyright. which can suspend the internet account for up to a month and levy a fine of up to €1. Details of law • HADOPI -Government agency The law creates a government agency called HADOPI (High Authority for Transmission of Creative Works and Copyright Protection on the Internet). The composition includes: 3 members appointed by the government 2 members by the legislative bodies 3 members by judicial bodies 1 member appointed by the Superior Council of Artistic and Literary Property 1 government council responsible to the French Ministry of Culture • Goal To ensure that internet subscribers "screen their internet connections in order to prevent the exchange of copyrighted material without prior agreement from the copyright holders" • Law Enforcement On receipt of a complaint from a copyright holder or representative. Actual Scenarios 1. which IFPI estimates to have reached around 10 per cent of P2P users in France.000 notices sent. If a subscriber ignores two notices within six months and infringes copyright law for the third time in a year.

a repeat offense is suspected by the copyright holder. The internet access subscriber is blacklisted and other ISPs are prohibited from providing an internet connection to the blacklisted subscriber. the third step of the procedure is invoked. the second step of the procedure is invoked. • Stakeholders involved P2P users French Government (HADOPI) ISP’s Stakeholders Consumer associations Entertainment industry Copyright owners 22 . the internet access subscriber is invited to install a filter on his internet connection. The email specifies the time of the claim but neither the object of the claim nor the identity of the claimant. in the 6 months following the first step. his representative. The ISP is then required to monitor the subject internet connection. Appeal to a court is possible only during the third phase of the action (after the blocking of internet access) and an appeal can result in shortening but not cancellation of the blocking. and upon accusation of repeated offenses by the copyright holder. for a specified period of from two months to one year. A certified letter is sent to the offending internet access subscriber with similar content to the originating email message. the ISP or HADOPI. however. The burden of proof is on the appellant. the ISP or HADOPI. In the event that the offender fails to comply during the year following the reception of the certified letter. In addition. a representative. The service suspension does not. If. and the offending subscriber is liable to meet any charges or costs resulting from the service termination.An email message is sent to the offending internet access subscriber. The ISP is required to suspend internet access for the offending internet connection. that which is the subject of the claim. derived from the IP address involved in the claim. interrupt billing.

conducted in November 2011. with overall P2P use down by 26 per cent since notices started being sent in October 2010 (IFP (IFPI/Nielsen). The use of unauthorized P2P networks has sharply declined. cy Approximately one in six P2P users (16%). which IFPI estimates to have reached around 10 per cent of P2P users in France A separate study by Ipsos MediaCT.000 notices sent. supporting the view that P2P piracy has seen a significant drop. found 90 per cent of P2P users in France were aware of the law and 71 per cent would stop the infringing if they received a notification with potential sanctions as part of th the graduated response programme Half of P2P users aged 15 to 50 (48%) claim the law has or will have a deterrent impact on their illegal behavi act behaviour. According to Peer Media Technologies.• Impact & Benefits To date there have been more than 700. Figure E Reduction in P2P use 23 . data on the number of infringing movie downloads initiated on P2P networks in France also shows a dramatic decline since notices started. There are good indications of the impact HADOPI has had on piracy in its first year of operation. claim the roximately new law has or will encourage them to use legal services more. around one million people.

More than 70% of music sales in China are digital. Yet it had suffered from an estimated 99% digital piracy rate in recent years. In 2010. making it a smaller market than Ireland. 50 per cent said knowledge or receipt of a notice made them stop their illegal activity and a further 22 per cent said it reduced their illegal consumption. meaning the legitimate market had operated at only a fraction of its true potential. BAIDU. (Figures are rounded). but the market had achieved a tiny fraction of its potential.a joint venture between 3 major record companies Universal Music Group Sony BMG Warner Music Group 24 . • Solution In July 2011. 2. 80 million images and offers multimedia content including MP3 music and movies. BAIDU is a Chinese web Services Company headquartered in Beijing. but digital music revenues per user were about 1% of that of the US. Source: The Effect of Graduated Response Anti-Piracy Laws on Music Sales:Evidence from an Event Study in France. China’s largest search engine created a milestone in the music industry’s development in China by striking a partnership with One Stop China . China had nearly twice as many internet users as the US. BAIDU provides an index of over 740 million web pages.A study commissioned by HADOPI in May 2011 found that among those who had either received a notice or knew someone who had received one. BAIDU (The google of China) • Situation Overview China. People's Republic of China. China’s overall music sales were worth only US$67 million. was a market with huge potential for the music industry.

S.000 songs. a new legitimate service supported by advertising revenues It allowed the labels to license 500. TV and newspapers in India receive more than 80% of ad 25 . creating crucial new opportunities for artists BAIDU had agreed to remove all its infringing “deep links” to music belonging to any of the One-Stop China labels The deal would allow China-based web users to legally download and stream hundreds of thousands of songs for free Under the agreement. Facebook & Google: Internet Intermediaries under Indian Law • Situation Overview Digital ad spending reached $291 million in India last year.4 billion in China and $32. 10 percent of which will be in Mandarin and Cantonese 3. compared with $7.• Stakeholders Involved Chinese Music industry One Stop China Stakeholders Digital music buyers BAIDU • Impact & Benefits This deal connected One-Stop's world-class repertoire of licensed music to a massive audience.2 billion in the U. BAIDU would pay a fee to the music labels each time a song is downloaded or streamed BAIDU would remunerate music content owners on a per-play and per-download basis for all tracks delivered through the BAIDU MP3 Search service It allowed consumers to download tracks for free from Ting.

• Issues Information Technology Act of 2008 states that intermediaries like blog-hosting platforms and social networks are protected from liability for hosting “prohibited content” created by their users as long as they “remove or disable access” to this content within 36 hours of acquiring actual knowledge that it is accessible via their sites or services. the social-networking giants are set to begin trial in March. 2012 to face charges that they hosted material that "seeks to create enmity. hatred and communal violence" and "will corrupt minds. while digital services get less than 5%." The complaint refers to obscene content and material that depicted Hindu.. Muslim and Christian religious figures in a mocking or offensive manner putting on stark display the legal risks for Internet companies chasing growth in India.5 million jobs and $45 billion in wealth for investors in the next few years if companies aren't bogged down in litigation Figure F India's potential 26 . Google Inc.spending. The rules further state that actual knowledge can be acquired through self-investigation or notification submitted by others. These companies are Internet intermediaries as per the provisions of Information Technology Act 2000 (IT Act 2000).5 million jobs and $45 billion in wealth for investors in the next few years if companies aren't bogged down in litigation. and Facebook Inc. But India's nascent Internet industry could generate 1. • Impact India's nascent Internet industry could generate 1.

such companies and their websites should not be allowed to operate in India A stringent liability for Indian subsidiaries dealing in information technology and online environment must be established by laws of India More stringent online advertisement and e-commerce provisions must be formulated for Indian subsidiary companies and their websites 27 .Stepped-up regulation of social networking is seen as a particular threat to India's Web growth which is the biggest driver of Internet adoption in India It might propel India to follow China’s example in blocking citizens’ access to Facebook — that would amount to one third of the world blocking access to the social network • Suggestions All subsidiary/Joint ventures companies operating in India that deal in information technology and online environment. Otherwise. must mandatorily establish a server in India.

All stakeholders need to be educated and involved to fight cyber crime and a professional analysis of their cyber security and cyber risk needs to take place. 28 . indeed every business owner. insure against losses to the greatest extent possible. Further. including crisis management in the event of a worst case scenario. has to face up to their vulnerability and do something about it. it is not going to be curbed that easily due to lack of technological infrastructural support and weak cyber laws prevalent in India.10. and implement and promote a well-thought out cyber policy. The digital media sector particularly is largely affected due to lack of stringent regulations and policies in the cyber crime domain. Future Scope & Conclusion Cyber crime ranks among the top 4 economic crimes of the world and is third on the list of economic crimes in India. it is highly likely that cyber crime and its perpetrators will continue developing and upgrading to stay ahead of the law. In fact. The media industry in collaboration with the government needs to replicate the successful global models and engage in a prophylactic plan to minimize the liability. sharing of information between various players in the industry would go a long way in consolidating and replicating successful initiatives. which would benefit all players in the long run. The Indian media industry industry needs to act as a facilitator and coordinator of anti-piracy efforts and Every franchisor and licensor. However. The risks of cyber crime are very real and too ominous to be ignored. The real reason why so many youths are attracted to the world of cybercrimes is the lack of transparency regarding this issue.

M.nytimes.11. http://hothardware.com/cmsDocuments/Agenda_October2011/Music%20piracy.radioandmusic. US facts by Institute for Policy Innovation (IPI)IPI's figures are based on the RIMS II mathematical model maintained by the U.pdf 9.pdf 7. http://bbs.stardestroyer.S. M.oxera. “The United States and International Copyright. Bureau of Economic Analysis.php 11. http://www. References 1.sethassociates.pdf 12. http://www. 1947. www. 29 . http://www.htm 5.wisegeek. http://www.pdf 2.com/content/editorial/news/piracy-costs-indian-musicindustry-325-mn-ey 10.com/what-is-online-piracy. http://www.” American Journal of International Law 41 (2): 406–29.org/chapters/c12454.net/viewtopic.com/2010/01/22/business/global/22music.html 3.in/downloads/reports/March2008EffectsofCounterfeitingErnst&Young.aact. http://www.com/News/Whats-the-Real-Impact-of-Piracy-on-Music-Sales/ 4.aact.x 13.com/wp-content/uploads/Evolving-Strategies-for-theEnforcement-of-Cyberlaws. http://mattbrundage.in/Reports.nber.php?f=22&t=147229 8.com/publications/online-piracy/ 6. http://www. Kampelman.

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