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What is a fair penalty for illegal file-sharing or piracy?

Posted at 05 November 2010 08:00 CET by wconeybeer

This week a federal jury handed down the verdict in the third file-sharing trial against a Minnesota mother of four who has been fighting against the charges brought by the RIAA since 2005. The jury found Jamie Thomas-Rasset guilty of pirating 24 copyrighted songs from six different record labels and awarded the plaintiffs $1.5 million in damages, or an astounding $62,500 per song.

Understandably, a lot of people are outraged by this verdict and while reading through comments about the fine on some online forums, I saw some interesting opinions on how these fines should be assessed. The point that $62,500 per song is excessively high seems to be something that everyone can agree on, but what actually is fair seems to be a big point of contention.

Much of the media is comparing the verdict to a case in Germany where a 16 year-old was fined $21 per track for illegally sharing two songs. A stark contrast, indeed, but a fine that low won’t do much to deter such behavior in the future.

A commenter on one website said that sharing a CD online is really no different than stealing one from a store, and a lot of others seemed to agree with that notion. But that comparison isn’t at all accurate. For the scenario to be even remotely similar, someone would have to not only steal the CD, but then would have to make copies and start handing them out to anyone who was willing to come and get it. What would be a penalty for that? Bootlegging doesn’t apply because the person isn’t generating any income from the endeavor.

The fines would become even more complicated when you consider how much money a record label is actually losing for the illegally-shared songs. Popularity of the tracks in question would need to be a factor because a label would lose a great deal more sales revenue on a track that is in high-demand than on one that isn’t as well-known or publicized. If you were to calculate the value of each of the tracks in question and multiply that by the number of times each was downloaded from Thomas-Rasset’s computer, I would bet that it wouldn’t even come close to a total of $1.5 million.

What is even more appalling about a judgment like this is that the artists who created the songs will never see a penny of the money. The RIAA has openly said that, “Any funds recouped are re-invested into our ongoing education and anti-piracy programs.”

The United States justice system has allowed this case to drag on for five years and three trials without a decent resolution or precedent for future cases. Yes, cyber-crimes are a relatively new thing to deal with and are difficult to judge, but isn’t it time that we started laying some sensible groundwork down for this type of thing?

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There are 25 comments

Administrator & Reviewer
Posted on: 05 Nov 10 09:14
    In my mind it should be the actual loss suffered by the plaintiff and not some ludicrously inflated figure.

    After all, if someone stole your property and it was worth $100 would you really expect to sue them and get $1,000,000 in compensation?

    Mr. Belvedere
    MyCE Resident
    Posted on: 05 Nov 10 09:35
      Originally Posted by Wombler
      In my mind it should be the actual loss suffered by the plaintiff and not some ludicrously inflated figure.
      And who just makes up that number? Not the judge.

      Kidding aside. I would like for the judge to order them to come up with absolute proof that the suspect has robbed the plaintiff from that much income. If they can prove the file was sent to 62,500 other computers by the suspect itself, perhaps then they can say they lost that much money.

      After all, if someone stole your property and it was worth $100 would you really expect to sue them and get $1,000,000 in compensation?
      Well, if they steal my very precious USB stick with unimaginable personal emotional value (256 mb and can play mp3 files), i expect nothing less than a quadrillion dollars.

      You know i will be scarred for life and my entire family will need extensive therapy for the next seven generations because of the loss. All i need to present is an expert who tells the judge it's true.
      MyCE Rookie
      Posted on: 05 Nov 10 10:55
        I think they are going about it all wrong. As long as they can prove 100% that the suspect committed the "theft" then it shouldn't be a monetary punishment. They should restart chain gangs and have them pick up trash or some other public humiliation type of work and on top of that make sure they print it at least in local papers the people's names and when/where they will be performing their humiliating work.

        This would be the best deterrent for illegal file sharers, it forces them to go outside and be in the sun and on top of that make a public spectacle of them.
        Senior Administrator & Reviewer
        Posted on: 05 Nov 10 12:11
          For music, I stand by my earlier post, as I think the future of songs will become promotional material for concerts, collector items (CD, USB, etc.) and other public performances.

          For policing other content such as video, games, software, etc. the following is a suggestion: Implement the 3-strike approach, but instead of cutting off the Internet, apply a bandwidth cap, e.g. 100MB/day upload allowance for 3 months, where the uplink is limited to 32kbps after this usage. For most Internet usage, this will not be an issue, but for a P2P tool that involves heavy uploading (e.g. BitTorrent), this would become heavily crippled.
          MyCE Member
          Posted on: 05 Nov 10 13:51
            A fair punishment for men would be to force them to watch a "Shirley MacLaine" marathon, or maybe Julia Roberts. Personally, I'd rather be waterboarded, my fingernails pulled off, or any other torture tactic would suffice. We should start making the punishments fit the crime. If you steal movies, make them watch really bad ones. If they steal music, maybe 24 hours of the "Village People", or something along those lines.
            New Member
            Posted on: 05 Nov 10 14:37
              I do not think anyone who uses a file sharing service should receive a fine. They obviously cannot pay it and it would force them to file bankruptcy. They can recover from that but the real criminals are not the file sharers, it's the companies that set up any site that allows copyrighted material to be shared. If you shut down the Limewires and Napsters of the world then the kids wouldn't have a way to do it.
              MyCE Member
              Posted on: 05 Nov 10 16:02
                I think that if someone is fined $21.00 per track which he could have paid $.99 for at, it would be a deterrent. If someone illegally downloads a 10 track CD and it costs them, $210.00 in fines, they will think twice before doing it again.

                Having said this, Peer to Peer is only one way for kids to get tracks illegally today. They are a multitude of web site from which they can download compressed files containing mp3 or FLAC tracks. as well as USERNET newsgroups. You don't even see these being discussed.

                At this point in time, it is probably more important to find a way to make music available at a reasonable cost to people who cannot afford to buy $12 - $20.00 CDs. I have a $15.00 a month Zune pass which gives me unlimited downloads (DRM resticted, of course) of a large number of albums. I don't know what Itunes offers, but I am sure they have, or will have something similar. Plus, with the Zune, I get 10 free tracks a month to keep - no DRM, so I am actually paying $5.00 for the monthly download fee, certainly a reasonable amount.

                Perhaps this is the model to look at going foraward - make the prices reasonable, and the fines realistic but not outrageous, and maybe the problem will be resolved.
                MyCE Rookie
                Posted on: 05 Nov 10 19:45
                  I can understand why the courts find this so difficult to resolve. Back in the day when I downloaded music from the newsgroups I would download every album that appeared on the country and western group. I was a leach and never uploaded any material. I would not have purchased any of the albums I downloaded had they not been available on the newsgroup. So the recording studio would not have lost any revenue from me even though I downloaded a great number of albums. I think that the penalty for UPLOADING should be stiffer and be based upon the number of things (Music, Movies, Software, etc) uploaded plus the number of downloads for that item. For example say that the fine for uploading a music CD was $1,000.00 and $21.00 per download then the person that uploaded the album would be penalized for both the uploads and all of the downloads that they are responsible for. The person that simply downloads one CD would just be fined $21.00 for that one download. If the person loses their court case then they would also have to pay for all of the court costs and attorney fees.
                  New Member
                  Posted on: 05 Nov 10 22:33
                    They will never stop file sharing ,they are millions doing it and getting away with it and dvd s cost 2 much anyway and are making millions for the Record companys and singers,if they brought the prices maybe we would buy thembut I don't think so u don't even need file sharing 2 do it either they are lots of other ways 2 ge t music, are they going 2 fine everyone don't think so.
                    MyCE Resident
                    Posted on: 06 Nov 10 00:08
                      @Vbritt you make some excellent points! Perhaps uploading versus downloading should be separated into different penalties/fines.

                      As far as the Thomas-Rasset $1.5 Million dollar judgement for sharing 24 songs goes, I think most people would agree that it is ridiculously absurd.

                      Even at 100 times the cost of each song (at $1/song), the total would be $2,400. It's beyond me how the $1.5 Million dollar award was determined.
                      MyCE Rookie
                      Posted on: 06 Nov 10 02:39
                        I'd like to see matters such as these, be taken in a few different ways.
                        If someone illegally downloads music, they should be fined 5x the price of the song, not to low, not to high, and the company is making money from the songs that were illegally downloaded and then some to cover court fees depending on the case.

                        Now, if someone were sharing the files or hosting them, then i think it should be dealt with how long they've been shared or hosted.
                        I think the sum of $10 a day should cover that.

                        But if you ask me, copyright has been taken way to far.
                        Plus, if someone wants music for a reasonable price, why not get a damn Zune Pass?
                        It's like $15 a month, and you get 10 DRM-Free songs PLUS, unlimited downloads for songs but they come with DRM.
                        They could also get a year pass for $150, and that's 10 songs a month free, so technically, you're paying $120 for music, then $30 for the service, since all songs are 80 MS Points ($1).

                        But if entertainment was cheaper these days, most people wouldn't Pirate.
                        Hell, better entertainment 20 years ago was half the price.

                        If iTunes, Zune or Napster had music up for $0.50 a piece, a 10 track album would be $5, NOW THAT, sounds reasonable to me because there is no shipping, no stocking fee, no packing material so the cost goes down even more for the company, and they make even more money if they made there products cheaper.
                        MyCE Rookie
                        Posted on: 06 Nov 10 16:03
                          I think one of the key points here is that most of the people who are downloading do not have a lot of money to begin with.

                          Their fines should be adjusted based on their income.

                          Add some community service to the sentence, and everyone wins.

                          We have to remember that there is no real cost associated with digital distribution apart from the cost to move the bits around. Any other figure is speculative and cannot be proven. The RIAA cannot prove that any of the people who downloaded a song would have actually purchased it if they had the money.

                          Add to this that many users want to have digital versions of their music collections (like from record albums or tape cassette) and have already paid for the song(s).

                          I really think the law here is on the corporations side and doesn't protect the public in any way. It needs to be repealed / revisited.
                          Posted on: 07 Nov 10 21:13
                            It is incredibly problematic to consider that the recording industry has been cheating artists and writers on royalties for years and when they actually do get caught there is almost never much of a penalty for this kind of theft. yet this same industry wants to have you believe that pirates are screwing the artists and writers by using P2P to check out their crappy products. When the RIAA members do collect they claim the cost of collecting was excessive and then they screw the writers and artists out of more money. These people make the mob look like a bunch of pussies.

                            I think the royalty tribunal should be enlarged to provide for an independent entity to deal with these copyright, royalty and piracy issues. If a record company gets near no penalty for thievery then why should some grandma somewhere get nailed because she is emotionally terrorized by the jack booted jerks associated with the RIAA?
                            Administrator & Reviewer
                            Posted on: 07 Nov 10 22:53
                              Originally Posted by loanstar744
                              If someone illegally downloads music, they should be fined 5x the price of the song, not to low, not to high, and the company is making money from the songs that were illegally downloaded and then some to cover court fees depending on the case.
                              I agree with that but I also think that the offenders should be given the opportunity to buy the tracks at a reasonable price avoiding any unnecessary court fees or legal costs.

                              MyCE Rookie
                              Posted on: 07 Nov 10 23:09
                                Originally Posted by Wombler
                                I agree with that but I also think that the offenders should be given the opportunity to buy the tracks at a reasonable price avoiding any unnecessary court fees or legal costs.

                                I completely agree with this. But I can't say the Company's would want to do this, they want money from the suspect to show hat Pirating is a big thing, and they don't want it. I think this was more of a way of scaring people then actually getting money.
                                MyCE Resident
                                Posted on: 08 Nov 10 02:22
                                  I say something like .99¢ to maybe $1.00 per song is a fair price as that
                                  is about what they would be able to sell the song for to start with on one
                                  of the pay for MP3 sites.

                                  They would never be able to sell a single MP3 for the amount of $62,500 per
                                  song and if they can get that much selling a single MP3 then dang it, I'm in
                                  the wrong business for sure.

                                  I'll have to get into the selling of MP3 music business in a hurry then and I'll
                                  just have to sell 1000 or so MP3's then I can retire with $62,500,000 maybe I
                                  can live a while on that amount.
                                  Senior Moderator
                                  Posted on: 08 Nov 10 02:57
                                    They would never be able to sell a single MP3 for the amount of $62,500 per
                                    song and if they can get that much selling a single MP3 then dang it, I'm in
                                    the wrong business for sure.
                                    That's exactly how much I charge. I figure I only have to sell one or two a year....
                                    MyCE Resident
                                    Posted on: 08 Nov 10 08:57
                                      Off with their HEADSisn't that what the king on the hill would say.
                                      MyCE Resident
                                      Posted on: 09 Nov 10 07:01
                                        1 cent per song
                                        MyCE Rookie
                                        Posted on: 09 Nov 10 08:00
                                          Originally Posted by samlar
                                          1 cent per song
                                          I'd drink to that.
                                          MyCE Resident
                                          Posted on: 09 Nov 10 08:28
                                            If I was on one of the Jury for these trails I might find someone gulty but then only give them 1 peeny per song to be paid over 100 years without interest and with each person who own the song having to come to the person house to get there penny
                                            MyCE Resident
                                            Posted on: 09 Nov 10 10:18
                                              1 kopeke?
                                              Retired Moderator
                                              Posted on: 09 Nov 10 14:28
                                                The regional court in Hamburg, Germany, seem to think the penalty should be €15 per track.

                                                In October, the Hamburg Regional Court ruled on the case of a young man accused of sharing the songs "Engel" and "Dreh' dich nicht um" over peer-to-peer networks.
                                                The Hamburg court decided that the best way to handle the issue was to consider what a comparable license would have cost an individual. In setting this amount, they relied on arbitration proceedings between music companies and current license offers for on-demand music made available for private use. The court had no way of knowing how many people the two songs were shared with, but it noted that neither song was recent (and thus would have less demand) and that the two tracks had only been made available by the 16-year-old for a short time.

                                                In Hamburg, the publishers had requested €300 per track, but the court decided that €15 was the proper per-track payment, for a grand total of €30 ($42).
                                                MyCE Rookie
                                                Posted on: 12 Nov 10 07:10
                                                  I would say the cost of the rental (regardless of the media stream) plus 10% would be fair, not unduly punishing and sensible The net result would be that it would be cheaper to just pay the original fee and be done with it. It would also eliminate the lawyer greed mill industry and most practically it would end up freeing up the courts, worldwide, to peruse justice in far more important areas. Simple. Logical. Reasonable. and by definition , impossible.
                                                  New Member
                                                  Posted on: 19 Nov 10 09:12
                                                    I don't know that much about the case. What I can see is the record industry's greed ruining lives over a few songs. I can see prosecuting someone who is bootlegging music and making a fortune off of material that he/she did not invest in creating. I could see making this defendant pay what she would pay to get those materials online along with a fee for court costs. However, the RIAA and the MPAA go too far for one small individual who isn't in the bootlegging business. The RIAA and the MPAA, along with all their little crony groups, have become the true criminals. They are ripping off the original artists and terrorizing fans. If they could, I'm sure they'd have regular house checks to be certain you aren't inviting friends over to listen to music that you bought. How pathetic is that.

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