In the months leading up to the now infamous raid on Kim Dotcom’s New Zealand mansion and his cloud storage site Megaupload, the entrepreneur and his associates were under surveillance.

Between December 2011 and March 2012, New Zealand authorities used the Government Communications Security Bureau (GCSB) spy agency to snoop on the private communications of Kim and former wife Mona Dotcom, plus Megaupload co-defendant Bram van der Kolk.

Since the GCSB is forbidden from conducting surveillance on New Zealand citizens or permanent residents in the country, the spying carried out against Dotcom was illegal. The GCSB admitted liability and will at some point pay damages, but Dotcom also demanded access to the recordings.

In 2017, however, the High Court rejected Dotcom’s access request, stating that the release of the intercepted communications would not take place. Citing security concerns, the Court said that the public interest in not disclosing the information outweighed the benefits of disclosure.

This denial triggered a claim by Dotcom to the Court of Appeal. The result of that process is now in and it’s more bad news for the Megaupload founder.

“The intercepted communications are relevant, and there is a public interest in them being disclosed so they may be put to use in and for purposes of this proceeding. Natural justice and open justice are the two dimensions to the public interest in favor of disclosure,” a Court of Appeal statement reads.

However, the Court believes that disclosure is not absolutely necessary for justice to be done in this particular case. Furthermore, it must also weigh the broader public interest and potential fallout that could harm national security, if the GCSB’s methods are compromised.

“The GCSB has admitted liability; what is in issue is the quantum of damages for dignitary losses. Summaries of information already disclosed will permit a fair trial in this case. The GCSB’s claim that disclosure would harm national security and international relations is well-founded. The balancing exercise favors non-disclosure,” the Court concludes.

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Increasingly, people are canceling their expensive cable subscriptions, opting to use cheaper Internet TV instead.

While there are plenty of legal options available, there’s also a broad offer of easy-to-use set-top boxes, sites, and apps that are specifically configured to deliver pirated content.

There are some free alternatives, but high-quality pirate IPTV services are often sold through a monthly or yearly subscription. This has created an industry that’s worth a lot of money. According to a new report from the EU Intellectual Property Office (EUIPO), nearly €1 billion in Europe alone.

This is the result of an in-depth study of the IPTV ecosystem published by the EUIPO this week. The research reveals the prevalence of IPTV piracy, who the main players are, how they operate, and what business models are used.

EUIPO looked at hundreds of allegedly illegal IPTV services and combined this with data from the Eurostat household survey data. Based on these figures, it estimates that pirate IPTV services generated €941.7 million annual unlawful revenue in the EU during 2018.

The research further finds that IPTV piracy is a problem across all EU member states. On average, 3.1% of the EU population access these unauthorized services. This translates to a customer base of 13.7 million users.

However, the scale of the problem varies from country to country. The Netherlands and Sweden have the highest percentage of pirate IPTV users, with 8.9% and 8.5% respectively. In Romania and Bulgaria, it’s far less common with 0.7% and 1.3% respectively.

The average subscriber pays a little over five euros per month for a subscription, with rates varying across Europe. Most revenue is generated in the UK, France, and Germany. Together these three countries deliver more than half of the total income, €532 million.

These statistics show that IPTV piracy is a major problem. EUIPO acknowledges this and provides a detailed overview of various actors in the ecosystem, as well as the legal remedies and enforcement options that are available.

EUIPO’s definition of IPTV appears to be quite broad, as cyberlockers and the BitTorrent-powered Popcorn Time are mentioned as well. In general, however, most traditional IPTV services rely on direct streaming feeds and playlists.

Regarding enforcement, EUIPO points out that EU law provides the means to go after developers, operators, and vendors of infringing services. Through civil and criminal actions against the alleged offenders, for example, or website blocking injunctions.

In addition, facilitators could technically face legal problems as well. This includes blogs and YouTube channels that show people how to configure pirate devices, for example.

“Depending on the level of involvement in the provision of illegal services, the facilitator can be co-liable for IPR infringement and can be prosecuted for aiding and abetting,” EUIPO notes.

Whether individual IPTV users can be easily targeted remains an open question. According to EUIPO, requiring operators of illegal IPTV services to disclose information on their users could be incompatible with EU data protection law.

The study is the most elaborate research into the illegal IPTV market to date. While it doesn’t arrive at any concrete recommendations, EUIPO’s Executive Director, Christian Archambeau, believes that understanding the ecosystem will help to raise awareness.

“This is a market area in which infringing business models change quickly as they adapt to new technology and business opportunities. This research clarifies the technology used, the complex supply chains and legal issues.

“It also casts much-needed light on a hidden area of an everyday activity, which is being exploited by organized crime, and should help raise awareness among EU citizens,” Archambeau adds.

In addition to the IPTV study, EUIPO also released new data on the use of pirated content in EU countries. This reveals that there was a 15% decrease from 2017 to 2018. Music piracy, in particular, dropped very fast, 32% on average across the EU

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A copy of the report titled “Illegal IPTV in the European Union” is available here (pdf).

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If US-based anti-piracy groups needed a recognizable local icon to rival the flamboyance of Kim Dotcom, last week they appeared to get one.

Omar Carrasquillo – better known by his YouTube name OMI IN A HELLCAT – is the founder of ‘pirate’ IPTV service Gears Reloaded. Unlike his counterparts behind similar platforms, however, OMI never hid the fact that he was running one of the most recognizable brands in the business.

OMI’s wealth, which included a huge house, the most blingy of jewelry, and a supercar collection to die for, was paraded all over his YouTube channel for everyone to see. But last week it came to an abrupt end. Gears Reloaded unexpectedly closed down and hours later OMI claimed he’d been raided by the FBI and IRS, allegedly for copyright infringement and tax offenses.

When compared to any of OMI’s previous videos, his demeanor made it clear that something catastrophic had happened. Nevertheless, in the absence of any confirmation by the FBI, some people complained that the whole thing was an elaborate fake designed to generate clicks.

Today, following a TV report from Fox 29, any notion that the raid existed only in OMI’s imagination has been dispelled. In the segment, a Fox 29 reporter is seen knocking on OMI’s front door, a home that was previously owned by former Philadelphia Phillies shortstop, Jimmy Rollins.

While the TV crew appears to have received no answer, the channel did manage to speak with some of OMI’s neighbors who confirmed what the YouTuber had been saying all along.

“[The FBI] had like bullet-proof vests on and they had guns drawn and they were very slowly approaching the house next door,” said neighbor Liz Ware.

In respect of OMI’s supercar collection, which some doubters claimed were either still sitting outside or had even been moved by OMI for effect, another neighbor who saw the whole thing recalled what happened.

“They loaded them off one by one through the course of about four or five hours,” said witness John Ware, who appears to be OMI’s next-door neighbor. “They took all the cars. Probably thirty of them.”

Other than OMI’s claims, that the case against him revolves around Gears Reloaded and tax issues, there is still no official confirmation of the allegations against him.

Last week the FBI refused to confirm or deny any operation and after prompting by Fox 29 yesterday, still declined to comment. It’s believed, however, that OMI is yet to be charged.

Interestingly, in a video posted to YouTube a few hours ago by OMI himself, which shows part of the Fox 29 report, the YouTuber said that just a few weeks ago his people asked the IRS “if they were after him” and he was told they were not. However, he’s certainly not happy with the way his accounts were prepared by his tax advisor.

“Back in September when I prepared my taxes, it just didn’t look right. I’m a 100% sure of this, I have 100% proof. I’m not just saying it, it just didn’t look right. My CPA [Certified Public Accountant] …she had access to all my bank accounts. She was only filing the 1099 [forms] that I received and shit didn’t look right,” OMI says.

“I [said] ‘i’m making more money than what you’re filing’. Thank God I didn’t sign them because that would’ve been hiding money, that would’ve been way worse, way worse. We contacted the IRS to see if they were after me, the IRS sent back a letter to my CPA and said no, they weren’t after me.”

OMI says that if he hadn’t been raided last week, there would be a payment plan in place by now, with around $2 million paid upfront in taxes and the rest paid in installments. Clearly, however, time had already run out and according to OMI, the assessment that streaming is something that won’t be acted on probably doesn’t stand anymore.

“To all the other streaming services out there, this is proof that this is not considered a great area,” he adds.

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Telegram was founded in 2013 by brothers Nikolai and Pavel Durov, who previously launched Russian social network VK (vKontakte).

The messaging service has grown from strength to strength and currently has around 300 million users. However, Telegram is increasingly associated with the spread of copyright-infringing material, as highlighted in October by the RIAA.

“Telegram offers many user-created channels which are dedicated to the unauthorized distribution of copyrighted recordings, with some channels focused on particular genres or artists,” the RIAA wrote in its submission to the USTR.

While one submission to US authorities is problematic, Telegram could soon face a few more coming from Russia itself, where a court order exists to prevent ISPs from providing access to the service. The threat comes from the Internet Copyright Protection Association (AZAPI) which represents copyright holders including some of the largest book publishers.

AZAPI says it has identified at least 170 Telegram channels that help to distribute pirated content to an audience of several million users. A letter reportedly sent by AZAPI to Telegram (obtained by local news outlet Kommersant) has the anti-piracy outfit complaining that most channels, and indeed Telegram itself, are not responding to copyright complaints.

It’s a position shared by Aleksey Byrdin, Director General of the Internet Video Association.

“Since 2016, we have repeatedly encountered the absolute neglect of the Telegram administration to the claims of copyright holders on audiovisual content,” Byrdin says.

As a result, AZAPI wants Telegram to introduce digital fingerprinting technology to assist with the identification and removal of allegedly infringing content. However, the whole matter is being further complicated by Telegram’s cryptocurrency business plans.

According to AZAPI, Telegram’s upcoming TON Blockchain network (and its token ‘gram’) “will be an ideal tool for monetizing counterfeit content on an anonymous basis.”

As a result, if anti-piracy measures aren’t taken, AZAPI says it will be left with no choice but to file complaints with the US Chamber of Commerce, the SEC, the Financial Action Task Force on Money Laundering (FATF) and the American Book Publishers Association.

Whether any such referrals can deepen the quagmire Telegram already finds itself in the US is another matter, however.

On October 11, the SEC announced that it had “filed an emergency action and obtained a temporary restraining order against two offshore entities conducting an alleged unregistered, ongoing digital token offering in the U.S. and overseas that has raised more than $1.7 billion of investor funds.”

The two companies – Telegram Group and TON issuer – filed a response to the SEC just a day later, requesting that the court throw out the SEC’s case.

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Dutch anti-piracy group BREIN has targeted operators and uploaders of pirate sites for more than a decade.

The group frequently approaches alleged wrongdoers with a proposal to settle the matter privately, but it doesn’t shy away from going to court if needed.

This is what happened to a prolific uploader of torrents and Usenet files. The man was connected to Place2home, a piracy community that was dismantled by BREIN last year. At the time, several operators settled the matter privately, but the uploader didn’t.

This prompted BREIN to take the man to court where he stood accused of sharing hundreds of gigabytes of pirated films and series. These were uploaded using aliases including “Starlight” and “Serie-Team.”

According to Dutch court records, the man was also active as an operator of both Place2home.org and Place2home.net, which offered Usenet and torrent files respectively.

In his defense, the man, whose name is abbreviated to “Van S,” admitted that he uploaded files. However, he denies that this happened on the scale and with the volume BREIN claimed. According to ‘Van S,’ his role was minimal as others were posting under the same aliases.

After reviewing the available evidence, the Utrecht Court sided with BREIN. It concluded that “Van S” was more than “an occasional” uploader and that he was also involved in operating the sites.

Part of the evidence comes from a WhatsApp chat log where ‘Van S,’ using the “Starlight” alias, admits to uploading movies and TV-series totaling 500 gigabytes in February of last year. The same chat also shows that he was well aware of the infringing nature of these files.

Based on this and other evidence the Court concludes that ‘Van S’ shared infringing content on a large scale between 2013 and 2018. In addition, he facilitated copyright infringement through his role as sysop of the two Place2home sites.

The verdict doesn’t cover any damages, but ‘Van S’ is ordered to pay BREIN’s legal fees, which total over €13,000. In addition, the man is required to remove his uploads and provide information about others who were involved with Place2home. The latter is important, as it may lead to additional suspects.

Failing to comply with the order will come at a high price. The Court notes that ‘Van S’ must pay a penalty of €5,000 per day that he doesn’t come forward, with a maximum of €150,000.

BREIN director Tim Kuik is happy with the outcome. The verdict shows that, in addition to uploaders, site operators can be held responsible as well. This is in line with the EU Court of Justice’s ruling in The Pirate Bay case, Kuik informs TorrentFreak.

The Place2home bust itself has also proven to be useful in the broader scheme of things. According to BREIN, it revealed that people higher up the chain were involved as well. This includes reseller Newsconnection, which offered subscriptions to Usenet provider XSnews.

“According to statements of uploaders who already settled, the sites were financed by people up the chain,” Kuik tells TorrentFreak.

These uploaders also shared internal communication which backed this up. That includes WhatsApp conversations, which also appeared as evidence in the most recent court case.

“To us, it is evident that the various players on the commercial Usenet market are colluding to optimize the availability of popular content on Usenet. This is completely different from the original Usenet,” Kuik notes.

BREIN believes that Usenet resellers and providers profit from piracy, and not just indirectly. In some cases, they are financing pirate sites as well, in order to keep their businesses profitable. With information from people such as ‘Van S,’ BREIN hopes to document these connections.

“We believe that the money makers on Usenet who are pretending to be ignorant are in fact are fully aware of what pays the bills: access to unauthorized content. They are facilitating it and financing it,” Kuik says.  

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A copy of the verdict from the Utrecht Court is available here, in Dutch (pdf).

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