Piracy: a major brake on creativity

While the appropriation of products or services offered by third parties online seems to be socially accepted, the same principles should apply to both the physical and digital worlds. Piracy has a significant detrimental impact on the creative industry, leading to reduced income for content producers and demoralization within the sector.

Andrea Fabra Fernández

Andrea Fabra Fernández

Reading time: 6 min

The unauthorized use and distribution of copyrighted content has a long history that predates even the invention of cinema and recorded music.

Piracy is a practice that has been socially accepted and inadequately pursued by the authorities, with little awareness of the detrimental impact it has on the creative industry and the demoralization it causes among creators in this crucial cultural sector.

The damage of piracy to the creative industry

We remember notorious episodes such as the case of Napster, a music file-sharing platform that once had 80 million monthly users and posed a significant challenge to the powerful music industry. In response to a deluge of copyright infringement requests, Napster implemented a filter to block unauthorized songs within 72 hours. However, it ultimately failed to prove the effectiveness of this mechanism and was ordered to pay $26 million to the industry and cease its activities.

Following a reevaluation of its business and shareholding, Napster transformed into a subscription-based streaming music service that bore no resemblance to its original model. Nevertheless, this new model had already been replicated by numerous other companies beyond just the music industry.

In recent times, Getty Images, a stock image website, filed a lawsuit against Stability AI, alleging that the company had used 12 million of its copyrighted images without permission to train its Stable Diffusion AI model.

These are just a few examples that underscore the irreparable damage that piracy inflicts on the creative industry, which accounts for over 3% of the global GDP.

Piracy in a technological and digital society

This illegal practice has always presented itself as a multifaceted challenge that is exceedingly complex to solve. Addressing piracy necessitates collaborative efforts from various stakeholders, including authorities, platforms, users, and entities responsible for managing intellectual property rights.

In today’s landscape, piracy has become increasingly sophisticated, largely due to the technological capabilities available to pirates. This results in higher-quality illegal content being disseminated or reproduced, enticing many consumers to opt for these options, often without realizing that they are consuming unauthorized content.

However, these technological advancements also enable those tasked with combating piracy to implement mechanisms for detecting and removing unauthorized content from their platforms. Nevertheless, the acquisition and implementation of such mechanisms come with significant costs.

Social awareness

There is still a long way to go in terms of social awareness of this crime. For example, numerous studies show that users who misuse the shared accounts offered by many audiovisual or music platforms are not considered pirates because “someone” is already paying for them.

The broadcasting of illegal live events by pirate platforms is especially evident in sports. It is very important to point out that the cost of acquiring sports licenses is very high. Pirating these contents produces a significant decrease in the income of the holders of these sports rights.

Risk of fragmentation of the regulation

Currently, a significant determining factor in the battle against content piracy is the need for standardized protocols among intermediaries to dictate the appropriate actions to be taken when responding to requests or notifications to cease illegal activities. This challenge is not solely technical in nature but is also intertwined with regulatory conditions at both national and international levels.

Despite the European regulations that have allowed us to make progress in the field of anti-piracy with legislative tools such as the InfoSoc Directive of 2001, the IPRED Directive (Intellectual Property Rights Enforcement Directive) of 2004 or the Copyright Directive of 2019.

The lack of standardized action protocols at the European Union (EU) level has resulted in some Member States adopting their own practices at the national level. For instance, a recent sectoral agreement among internet service providers in France has proven effective in combatting piracy of live sporting events. However, such national-level approaches also pose a risk of fragmentation within the EU, potentially impeding coordinated efforts in a digital environment where jurisdictional boundaries are often blurred.

European initiatives to fight piracy

The European institutions are fully aware of the imperative to provide effective tools in the fight against piracy. They have taken concrete actions aimed at coordinating efforts among various stakeholders to combat this criminal activity.

The recent approval of the Digital Services Act by the European Parliament has introduced new mechanisms that empower users to report illegal online content. Additionally, it allows platforms to collaborate with specialized “trusted flaggers” to detect and remove illegal content while ensuring necessary safeguards.

In May 19th 2021, the European Parliament approved a Report requesting the European Commission to propose concrete measures specifically adapted to live sports events, allowing for the immediate removal of, or the disabling of access to illegal content immediately after reception of the notice and no later than 30 minutes after the start of the event.

As a result, the European Commission  launched last May 3rd a set of Recommendationson live content piracy, considering the unique characteristics of such retransmissions and their social and economic impact. Despite the expectations created with respect to a more specific timeframe, the Commission’s response has not been particularly ambitious. It establishes a monitoring period for the aforementioned recommendations which we believe is excessively long. If the Recommendations fail to effectively protect our European creative and sports industries, additional actions -which includes legislation-  will be taken after this monitorin period

We are confident that the Commission´s invitation to the EUIPO Observatory to help monitoring the effects of this Recommendation on online piracy of sports and other live events  will help in evaluating the results of this Recommendation.

The importance of public-private cooperation

It is crucial not to let our guard down against piracy. There are still many ongoing challenges, such as advertising from major commercial brands that is inserted on pirate websites, thereby funding this illegal activity, which must be addressed as a priority.

The internet has facilitated the democratization of knowledge, creative and cultural content that is now accessible to anyone with internet access. Protecting the copyright of this content requires a collaborative effort between the public and private sectors. This cooperation is essential due to the complexity of a phenomenon that prevents creators from being adequately compensated for their efforts (and resources) invested in their work. Additionally, states suffer from diminished public revenue as they lose out on taxes derived from pirated content.

According to the consulting firm Grupo Ático34, in 2021 alone, the volume of pirated or illegally acquired content reached 5,334 million units, equivalent to a market value of 32,492 million euros.

At Telefónica, we believe that fundamental principles governing Internet activities should be consistent with those applied offline. This is because there should be no entitlement to appropriate products or services offered by third parties, whether online or offline. As such, we support all initiatives undertaken by the European institutions to safeguard the rights of authors and creators.


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