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The UK's regulator of premium rate services (PRS) will pass on details of copyright infringing websites to service providers under a new "proactive" arrangement with police and music industry representatives, it has announced.

PhonepayPlus said that PRS providers notified of copyright infringing sites could be charged under the Proceeds of Crime Act (POCA) if they then subsequently made "arrangements" with operators of the illicit sites to help users pay for the pirated music.

"It is important to note that, if any provider has been put on notice that a service is illegal and either continues to provide, or subsequently provides, payment services to, or for, the site(s) in question, the provider may be criminally liable under Section 328 of the Proceeds of Crime Act," the regulator said in a notice to PRS providers. Under POCA a person is generally guilty of an offence if they enter into or become concerned in arrangements they know or suspect "facilitate (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person".

Under the new notification scheme the City of London Police (CoLP) and the International Federation of the Phonographic Industry (IFPI) will inform PhonepayPlus of "any promotional material, including but not limited to websites" that is suspected of offering illegally copied music to be downloaded through "premium rate means", the regulator said. The information will then be passed on to individual PRS providers "to ensure they are aware of the potential risks of contracting with clients associated with such promotional material," it said.

To date PhonepayPlus has received notice of 24 infringing websites and police are currently investigating 38 other "unlicensed services", the regulator said.

PhonepayPlus said it was taking the "proactive" step to notify providers of potential infringers because of the "risk" that copyright infringers would try to sell pirated music through PRS. It said Visa, Mastercard and PayPal were already working with CoLP and IFPI to prevent the sale of illegal content through their services.

"Until relatively recently, pirated music downloads were almost exclusively paid for by consumers using credit cards," PhonepayPlus said.

"However, following discussions between IFPI and CoLP and providers of credit card services, credit card companies have begun to identify and exclude merchants offering pirated music. There is therefore a risk that those who still intend to offer pirated music may now turn to PRS as a quick and easily accessible form of payment. While there is little evidence at present of pirated music being offered using PRS, PhonepayPlus has agreed to work proactively with the IFPI and the CoLP in order to prevent potentially criminal activity damaging the ongoing reputation of the overall PRS market," the regulator said.

Claire Smith, copyright law expert at Pinsent Masons, the law firm behind Out-Law.com, said that owners of copyrighted music could also sue some companies involved in operating PRS if those firms do not prevent customers paying for copyright-infringing content that they have been notified about under the UK's E-Commerce Regulations.

Under the Regulations a service provider is generally not liable for any copyright-infringing material accessed by users of its service if it "acts as a mere conduit, caches the material, or hosts the material".

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