Original URL: http://www.theregister.co.uk/2011/11/03/prs_copyright/

Premium-rate calls watchdog to join battle against pirates

Copyright cop pledges total British intolerance

By OUT-LAW.COM

Posted in Law, 3rd November 2011 08:18 GMT

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".

How to stay out of trouble

In order to avoid any liability for unlawful material, the service provider must, upon gaining "actual knowledge" that the initial unlawful source has been removed or access to it has been disabled, act 'expeditiously' to ensure that the information is deleted from its cache or ensure that access to it is disabled.

Under the PhonepayPlus Code of Practice companies that provide a "platform" or "any other technical service" enabling consumers to access PRS services and companies that control or are responsible for "the operation, content and promotion" of PRS "and/or the use of a facility within the PRS" are considered to be subject to the rules set out in the E-Commerce Regulations.

Those companies that help PRS providers operate their services could also face investigation under the Code if the providers are found guilty of the POCA offence, the regulator said.

Under the Code PRS network operators, consumer platform providers, and those companies in control or responsible for the "operation, content and promotion" of the PRS are required to conduct a risk assessment of their involvement in the service.

Those companies must "assess the potential risks posed" by entering into contracts for the provision, promotion, marketing and content of PRS which they help provide or facilitate "and take and maintain reasonable continuing steps to control those risks", the Code states.

Network operators and the consumer platform providers for PRS must also "perform thorough due diligence on any party with which they contract in connection with the provision of premium rate services and must retain all relevant documentation obtained during that process for a period that is reasonable in the circumstances", according to the Code.

PhonepayPlus can issue a range of sanctions for breaches of its Code, including handing out fines and barring companies from being involved in helping provide PRS for defined periods.

The regulator said that it was "pleased" to be helping in the fight against copyright infringement.

"We are working with PRS providers and the trade bodies who represent them to make sure a clear message goes out – there is no place in the UK PRS market for illegal content that infringes copyright," Paul Whiteing, chief executive of PhonepayPlus said in a statement.

The IFPI, which represents 1400 artists and recording companies in 66 countries, said PhonepayPlus' "commitment" would make it difficult for copyright infringers to obtain payment for pirated music.

"Pirate websites hoping to use phone payment services as a replacement for the credit card facilities withdrawn from their sites will find they are unable to do so," Frances Moore, chief executive of IFPI said.

"These illegal business that rip-off artists, songwriters and record producers are finding it ever harder to continue to ply their lucrative trade," Moore said.

CoLP said that the "collaboration" would help "clamp down" on illegal file-sharers.

"By working in close collaboration we are making sure that payment avenues previously open to fraudsters to facilitate digital piracy are being blocked even before they have had the chance to exploit them," Detective Superintendent Bob Wishart of CoLP said.

"This proactive approach also sends out a clear message that copyright infringement will not be tolerated in this country," Wishart said.

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