Time To Slay the File Sharing Myths

This month marks the tenth anniversary of the debut of Napster, the file sharing service that had a transformative effect on the music and Internet services industries.  While many commentators have marked the anniversary by reassessing Napster’s impact and speculating on what lies ahead, my weekly technology law column (Toronto Star version, homepage version) argues that now is also a suitable time to put to rest two myths about file sharing in Canada.  

There are far more than just two myths (see textbox below), but the ones that have dominated debate is that all file sharing is legal in Canada and, perhaps as a consequence of this, that Canada leads the world in illegal file sharing activity. Neither claim is true.
The belief that Canada is a veritable “Wild West” where it is legal to upload and download to your heart’s content has its genesis in the recording industry’s failed file sharing lawsuits in 2004.  Following the U.S. example, the Canadian Recording Industry Association filed lawsuits against 29 alleged file sharers at five Canadian Internet Service Providers.

The case was a failure as then-Federal Court judge Konrad von Finckenstein (now chair of the CRTC) denied a request to order the ISPs to disclose the identity of their customers.  Von Finckenstein ruled that the recording industry’s case suffered from evidentiary shortcomings along with questions about privacy and copyright law.  The decision garnered international attention and many mistakenly took it to mean that all file sharing was legal in Canada.  

The reality is that Canadian law features a private copying exemption that includes a levy on blank media. The Federal Court and the Copyright Board of Canada have intimated that the levy, which has generated hundreds of millions of dollars, could apply to personal, non-commercial downloading of sound recordings onto certain blank media. The law therefore opens the door to some legalized music downloading, but it does not cover other content (ie. movies or software) or the uploading of any content.

The second myth, which is endlessly promoted by advocates of legal reforms, is that Canada has the largest file sharing population on a per capita basis in the world. For example, the Conference Board of Canada recently used this argument as its lead finding in a series of reports that were recalled due to plagiarism.

The myth originates from a 2004 study by the Organization for Economic Co-operation and Development (OECD) that examined 2003 file sharing activity data in its 30 member countries. The nearly six-year old study did not consider whether the activities were legal or illegal, but rather focused exclusively on the number of peer-to-peer users.

Canada stood first in that study, yet there is ample reason to doubt its validity today. In addition to the fact that the OECD made no claims about illegal activity nor about file sharing in the more than 150 non-OECD countries, newer studies indicate that Canada is declining as a hub of file sharing activity relative to the rest of the world.

BayTSP, a U.S. firm that identifies and tracks copyright content for movie and music interests, recently issued a report that assessed the number of infringement notices arising out of peer-to-peer and Internet use. According to the report, Canada declined to 10th worldwide (it was seventh last year).  The top three countries were Spain, Italy, and France, with each having at least five times the number of infringement claims as Canada.

The decline runs contrary to Canadian file sharing mythology, but it should not surprise since it mirrors Canada’s decline in the global high-speed Internet access rankings.  This suggests that Canadians may have been early file sharing adopters due to better access, but other countries have now passed us on both fronts.

Much has changed since Napster took the world by storm 10 years ago.  As we look ahead to the next decade, it is time to ground the debate in fact rather than fiction.

The Other File Sharing Myths

Canadian Artists are Opposed to File Sharing.  While some certainly are, both the Songwriters Association of Canada and the Canadian Music Creators Coalition have expressed their support for the full legalization of file sharing through a new levy scheme.  Moreover, a growing number of artists have reported great commercial success by using peer-to-peer networks to distribute their work.

File Sharers Don’t Buy Music.  A growing number of studies indicate that the opposite is actually true. A 2007 study commissioned by Industry Canada concluded that there is positive relationship between P2P file sharing and CD purchasing, while last week Vuze, a peer-to-peer video distribution company, released a survey that found that peer-to-peer users attend more movies and purchase more DVDs than general Internet users.

Peer-to-Peer Networks Contain Nothing But Infringing Content.  Music and movies constitute a big part of file sharing, but they share space with open source software, independent films, and even public broadcasters such as the CBC, who have all employed file sharing technologies as an efficient distribution system.

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