BREIN Demands $70,000 Per Day Penalty For Usenet Community

Founded in 2001, FTD is the largest Usenet community in The Netherlands with around 450,000 members. FTD and its software allows members to report material they find on Usenet along with its location. This material could include movies, music and TV shows and this made it a target for notorious anti-piracy outfit BREIN.

BREIN says that FTD operates illegally but the Usenet community and its specialist IT lawyer, Arnoud Engelfriet of Ictrecht law firm vigorously deny this and are now taking legal action the Dutch anti-piracy outfit. The background to the case can be found in our earlier article, and a more detailed report on the action against BREIN here.

Yesterday, while BREIN’s site was still supposedly out of action following an alleged (or Hoaxed) DDoS attack from Pirate Bay fans, it published a further report about FTD, which was hidden on its site away from easy public viewing. Strangely the same page at the time of writing is password protected and the report unavailable, but we have a copy and translation.

Entitled ‘BREIN Demands Closure of FTD’, the anti-piracy outfit went on to say that if FTD does not close it will require a penalty of 50,000 euros ($70,000) per day against the service, in addition to compensation and full reimbursement of costs. BREIN said that FTD “organizes and promotes” Usenet content, most of which is illegal.

BREIN then refers to earlier discussions it had with FTD, noting that it asked FTD to cease its “structural use of illegal content” in early 2009. The two sides had entered discussions to see if they could iron out their difficulties. Following on, FTD pro-actively modified how they operate to ensure that there could be no doubt as to their legality.

“After we made the changes, we got complete radio silence from BREIN. No confirmation, no rejection, nothing,” Arnoud explained. “Only after several days we found out what BREIN thought – but only by reading the online news. That was a huge disappointment.”

The news saw BREIN declare that FTD was a criminal operation in an article titled “You do not pay for it, it’s unlawful” and this led to FTD taking legal action against BREIN to try to clear their name by having their operation declared legal by a court. Now BREIN is counter-claiming against FTD.

Tim Kuik from BREIN now says that it is clear that FTD “continued their abuses unabated” and that the modifications they made were only made to hide the “true nature” of the site.

“It is a wolf in sheep’s clothing,” said Kuik. “FTD earn money with a system that exists by virtue of the huge supply of illegal content to Usenet.” Mirroring the disappointment felt at FTD, Kuik added: “It is disappointing but illustrates that BREIN’s outstretched hand has been cut off.”

So what exactly does this claim for 50,000 euros per day mean for FTD? Lawyer Arnoud Engelfriet told TorrentFreak that BREIN did not ask the court for damages. Legally they are barred from asking for damages – article 3:305a of the Dutch Civil Code says that an organization that represents the interests of a certain group can never ask for damages. They asked instead for a penal sum of 50k euros if FTD were ordered by the court to shut down but it refused.

“The idea is that a court can order you to shut down but you can ignore the court,” said Arnoud. “With the penal sum, you risk that the court will then sell your house or seize other assets. In principle that’s legal, but the amount is of course ridiculous.”

“Ridiculous also sums up my view of the BREIN counterclaim. Instead of addressing any of the points we raised, they simply repeat their standard rhetoric. Nowhere is the distinction made between uploading works and telling people that someone has uploaded a work for (legal) download. And downloading illegal uploads is legal in the Netherlands,” notes Arnoud.

“BREIN is not known for its careful handling of the truth,” he added. “They are a propaganda organization after all.”

Post from: TorrentFreak

TorrentReactor Users Suffer Rootkit Attack

Aside serving torrents the TorrentReactor team launched TorrentPrivacy last year, a service that allows BitTorrent users to download torrents anonymously. Unfortunately, the site itself now poses a security threat of its own.

Websense reports that TorrentReactor has been injected with an IFrame that connects to a malicious site full of exploits. The exploits affects various applications including Internet Explorer and Adobe’s Shockwave and Acrobat Reader.

Once the user is successfully exploited a Trojan Downloader with an extremely low anti-virus detection rate will download and install a rootkit on the user’s system, after which more evil is bound to happen.

TorrentReactor’s founder Alex told TorrentFreak that they are looking into the matter and hope to fix the vulnerability as soon as possible. Alex further told us that he has no clue who’s behind the attack.

This is not the first time that TorrentReactor has suffered from an IFrame injection as The Register points out. Last year it dealt with a similar security breach.

Needless to say, TorrentReactor users may want to avoid the site for the time being if they’d rather not have a rootkit on their system.

Update: Alex told TorrentFreak that the problem has been addressed. “It was sql injection which was fixed the same day. Now we do everything to prevent it in the future. We’re very sorry.”

Post from: TorrentFreak

Mininova Demands Rectification from Dutch Parliament

In common with most other European countries The Netherlands is trying to find a solution to the ever increasing use of file-sharing sites to share copyrighted material. Presently, downloading movies and music for personal use in The Netherlands is seen as “fair use” and not punishable by law.

In their advice to the government, a working group consisting of four members of the Dutch parliament looked into the matter. They suggested criminalizing downloading once the entertainment industry has come up with sufficient legal alternatives.

The conclusions of the report were widely debated in the Dutch press. Worryingly, also some of the factual errors about Mininova that the parliamentarians dreamed up were recited in the media, which may hurt the BitTorrent site in the ongoing court case against the local anti-piracy outfit BREIN.

For instance, the report claims that Mininova ignores complaints form copyright holders and refuses to remove torrents from their site. This nonsense of course, since the site has had a copyright policy for years and is known to follow up every complaint.

Another inaccuracy in the report is the claim that Mininova adds “reviews” to the torrents their users have uploaded, something we’ve never heard before. The rumors that they actually host copyrighted content and that they filter porn from their site pro-actively don’t hold up either.

The Mininova staff are not happy with these allegations, especially since they are currently involved in a lawsuit against the entertainment industries that covers the same issues. “We are very displeased with the fact that the working group didn’t contact us prior to releasing this report, or even took a look at mininova.org,” Mininova co-founder Erik Dubbelboer said.

“We demand that the spreading of false information related to Mininova will be stopped. In addition, we demand that the working group removes the name Mininova from the report and places a rectification on the website of the Dutch parliament and in several national newspapers,” Dubbelboer added.

“We take this very seriously,” Erik Dubbelboer said. “If these demands are not met, we’ll consider to take legal steps,” he said to emphasize the seriousness of their demands.

Arda Gerkens, the head of the parliamentary working group pointed to her parliamentary immunity when she was confronted with the news. However, legal experts said that parliamentarians don’t have any immunity when they speak out in public, which she did.

Mininova demands that the rectifications are made before the verdict in their case against BREIN is due, so it wont influence the decision of the judges.

Post from: TorrentFreak

A Glimpse at The Pirate Bay’s Uncertain Future

The sale of the largest BitTorrent tracker in the world to Global Gaming Factory X (GGF) blasted like a shockwave though the BitTorrent community yesterday. For years The Pirate Bay has been a synonym for free file-sharing, something that many fear will change in the near future.

However, thus far GGF’s plans for the site and tracker are rather vague and uncertain. First of all there is a huge divide between what the Pirate Bay co-founders think will happen to the site and what GGF is telling the public.

TorrentFreak has spoken with Pirate Bay co-founders Peter Sunde and Fredrik Neij who both think that the Pirate Bay will stay pretty much like it is now for the time being. The only difference in the short term, according to their knowledge, is that the site will link to torrents hosted on a third party domain tracked by a third party tracker.

Both the torrent hosting service and the tracker they are referring to are still in development, the co-founders said. They are not aware of any concrete plans to turn the site into a legal venture. In an attempt to find out we asked GGF to elaborate on their future plans and the response we got was remarkable.

GFF told us that most of their recent comments to the press were nothing more than “corporate bla bla.”

So let’s take a look at some of the bla bla that surfaced in the past day, to see if it makes any sense at all. Here are some of the key proposals.

1. The new Pirate Bay will put a halt to illegal downloading.
2. The Pirate Bay will compensate rights holders who publish their content on the site
3. The Pirate Bay will pay users for sharing files.

This sounds very impressive but, to put it mildly, it raises a few concerns.

It’s basically the same as saying that iTunes would pay its users to share music. When GGF has to pay both file-sharers and content providers they will undoubtedly have to raise huge sums money from a third party. So what is going to bring in this cash?

Ads of course! GGF is predicting to sell ads like no other website in the world has ever done. They told BusinessWeek that they hope to make as much as $672 million a year from advertisements.

GGF is also planning to raise money from ISPs. Theoretically ISPs might be willing to contribute because they could save on bandwidth costs if most of the files are served locally or directly from caching services, but it wont be enough. Also, they assume that The Pirate Bay will generate a significant portion of Internet traffic once they go ‘legal’, which is doubtful.

An even more significant problem is keeping the current users on board and cutting deals with content providers, all at the same time. This is an almost impossible task since copyright holders will only join if there is no illegal content on the site, and users will only stay if there is enough free and unrestricted DRM-free content available.

This means that GGF has to cut deals with pretty much every large music and movie studio from the start to have even a chance of survival. Even if they manage that, they also have to collect millions of dollars to compensate both the users and copyright holders.

Nevertheless, only hours after they announced they would acquire The Pirate Bay, GGF claimed that the entertainment companies they’ve spoken to are already interested in teaming up with the site they fought long and hard in court. Perhaps the Big Four are more open-minded than we expected – maybe GGF will draw on the business relationship it built with Vivendi in 2007?

No further explanation is needed to see that the bright future GGF is selling will never happen. Their plans seem to be completely delusional, at least in this world, and it’s even a mystery where they will get the $7.8 million funding to actually buy the site. If they ever will….

Post from: TorrentFreak

Suspicions of Insider Trading Surround Pirate Bay Buyers

Confidence and trust in the BitTorrent community reached a possible all-time low yesterday as news broke that the world’s largest tracker, The Pirate Bay, would be sold to the corporate Global Gaming Factory X (GGF).

The acquisition for $7.8m (SEK 60 million) came as a huge shock to most people familiar with The Pirate Bay, as GGF promised that when it takes over the site it will eliminate illicit file-sharing – the base upon which The Pirate Bay achieved its worldwide fame and enabled it to gather millions of loyal users.

Indeed, most indications point to GGF being only interested in three things – the Pirate Bay’s domain name, the users and the revenue they can generate from them.

However, according to a report, the news of the acquisition didn’t come as a shock to everyone. Indeed, accusations are being made that some individuals knew what was about to happen and took the opportunity to try and cash in.

Around a week ago, equity marketplace Aktietorget shut down the trading of GGF stock after it spotted unusually large trading volumes leading to a rapidly increasing stock price, notably in the absence of any new information to explain the sudden interest in the company.

Indicating they suspect insider dealing and announcing an investigation, Peter Gönczi, executive vice president of Aktietorget told Dagens Industri: “There are reasons to suspect that information was leaked.”

After the price of GGF shares rocketed by more than 150% yesterday, at one point today they had lost 29% of their value, up to date details here.

Post from: TorrentFreak