Spain Steps Up Protection of Digital Content

MADRID – As if  to pay tribute to a legacy inherited from the pirates of the Spanish Main, Spaniards nowadays are famous for pillaging intellectual property rights on the Internet, boasting one of the most vibrant piracy cultures in the world. More than 77 percent of the digital content consumed in Spain in the first half of 2011 was pirated, worth an estimated €5.2 billion ($7.2 billion)  to the music, film, publishing and videogame sectors.

American diplomacy has repeatedly highlighted the issue with Spanish officials and voiced anger at reluctance to act decisively, with a reported letter from U.S. Ambassador Alan Solomont in December leaked to Spanish daily El Pais threatening to put Spain on a U.S. trade blacklist.

So last week’s passage of SOPA-style legislation, known as the Sinde Law, that enables judges to crack down on Europe’s worst offenders by empowering them to shut down websites offering illegal content was hailed by many in the industry as pivotal. The law will go into effect March 1.

“Now we have a line that defines what’s legal and what is not and linking providers are on the other side of the law,” said Federation of Anti-Piracy General Manager Jose Manuel Tourne.

Linking’s legal ambiguity – with judges ruling that to facilitate access to files was not a copyright infringement until 2011 –  coupled with prolific peer-to-peer usage in Spain has made fighting pirates challenging.

The most controversial aspect of the new law is the creation of an Intellectual Property Commission that will sift through the registered complaints and have the power to proceed with an administrative decision against individuals with fines, closing down sites or blocking access to sites outside Spain. If the complaint is against a company, a judge will decide whether to order access to data to identify and shutter operations.

Internet consumer rights groups defending a libertarian position on property rights are vociferous in Spain. While the official Pirate Party has no parliamentary representation, the groups have been effective in accessing political parties, making their positions clear in the media and  even sitting down to negotiate with former Spanish Film Academy president Alex de la Iglesia, before his resignation last year over the Sinde Law.

“Instead of judges deciding, now it’s going to be bureaucrats. That’s a danger because the law will effectively be decided by politicians, not judges,” said one of Spain’s premiere hackers Txarlie Axebra of Hacktivista.net.

According to Axebra, it will be easy to finesse around the new law.

“The measure is aimed primarily at sites, not  peer-to-peer. If it is applied with imagination, it could reach P2P, but it’s mostly torrents that can be affected,” Axebra said. “A very possible effect is that sites will use hosts outside the country where the law can’t reach them or will use intermediaries like TOR, which is the system used in China and Iran. If China can’t beat it, neither will this law.”

Indeed, Redtel – which groups Spain’s heavyweight telecoms Telefonica, Vodafone, ONO and Orange–reacted immediately to the law’s passage saying they did not want to foot the costs.

“It must be clarified who will pay the cost of executing the measure when the Intellectual Property Commission, following judicial authorization, orders the collaboration of the telecommunication operators,” a spokesperson said.

But for the content industry, derivative costs are secondary. Plummeting ticket sales at movie theaters stand in contrast to upswing in other European territories. Box office takings dropped 2.7 percent to €628 million ($823 million) in 2011 and admissions slumped 2.2 percent to 95.5 million, according to provisional figures from Rentrak.

Will the new vigor in addressing piracy arrest the fall? End users aren’t sure. Spaniards haven’t flocked to mainstream online content services such as iTunes, PlayStation and Xbox. Legal options like EGEDA’s Filmotech account for miniscule consumption.

“I’d be happy to buy good quality films on line,” said one consumer who asked not to be identified. “But, going to the movies with a family is far too expensive to consider right now and I can’t find the movies I want in legal channels.”

The next step-most say – has to be education.

“There has to be education,” Tourne said. “And in the end, it all depends on how the law is enforced. It’s a first step. It’s very significant because it’s the first, but only with high fines that are consistently enforced will people respect it.”