The article concerns Pierre Lescure and his team, who have been charged by the French government with coming up with ways to help the world of culture in France adapt to the Internet economy. One idea, kindly suggested by the French recording industry, is to replace Hadopi's court procedures for those accused of unauthorized file sharing with an automatic fine of 140 euros after three strikes. That is, from being guilty until proven innocent, as now, under the proposed scheme those accused would simply be found guilty without any further discussion. And then there's this:

In parallel, no de-penalization for non-commercial sharing, but a desire to "increase the value" of free licences of the Creative Commons kind. The Lescure team believes that letting works circulate freely (as they do now...) would hinder the development of legal offers, particularly VOD [Video On Demand].

We shall have to wait to see what he has in mind. But it would be hard to find a better symbol of the French establishment's attitude to the Internet and its extraordinary new possibilities than trying to make people pay for works that could be shared freely (because their creators want that), on the grounds that it might hinder a service that turns the Net into television.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

This interpretation is supported by the other notable fact to emerge from Dotcom's tweet: that after French users, it is Spaniards who are signing up for Mega's premium membership in droves -- another group who have had a punitive copyright infringement law imposed on them recently. This means that in about a year's time, we can probably expect the Spanish department tasked with implementing Ley Sinde to publish figures showing that the number of P2P users is falling -- omitting to note, of course that they, like their French counterparts, have simply moved to alternatives instead.

Now, some will doubtless use these trends to argue that Mega should be shut down just as Megaupload was. But the correct inferences to draw are that HADOPI and Ley Sinde are just an expensive waste of time, and that people don't expect to get everything for free, as the popularity in France and Spain of Dotcom's paid-for Mega service shows. It's just a matter of the recording and film industries offering the public what they want, in a form they want, at a reasonable price. Is that really too much to ask?

Follow me @glynmoody on Twitter or identi.ca, and on Google+

UPFI, (Union of Independent Phonographic Producers), said that it agreed with the opinion of French music rights group SACEM that a disconnection regime should be replaced with warnings along with fines of 140 euros.

PCInpact contacted Jerome Roger, Director General of UPFI, who confirmed the group is indeed in favor of such fines.

This leaning towards cash penalties is also endorsed by Warner Music President Thierry Chassagne. In recent comments Chassange suggested that not enough punishments have been handed out under Hadopi and that a deterrent is necessary.

Hadopi hasn't been going too well. Despite putting out some dodgy statistics, the Hadopi agency hasn't really been able to show that the three-strike approach is doing anything to reduce the number of unauthorized downloads. In the two years that Hadopi has been running, only one person has been brought to court -- and he was innocent, but fined anyway.

As we reported, with Sarkozy gone, the new French President and his team are looking for ways to cut the cost of this scheme. Numerama has details of a recent presentation from the French Minister of Culture and her advisor, Pierre Lescure, about the future of Hadopi (original in French) that confirms the "three strikes" approach is likely to be dropped:

[Lescure] strongly suggests that the graduated response will be abandoned, because it is considered illegitimate and ineffective. "It is likely that a significant proportion of Internet users who have stopped P2P downloads have turned to other types of unmonitoried methods (streaming, direct download) rather than legal offerings, whether free or paid," writes Mission Lescure. Sending out e-mails may be not stopped, but it seems certain that the criminal sanctions will be shelved.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Not all of the facts of the case have been released, but we do know that he received and apparently ignored the statutory three warnings from HADOPI, and then was summoned to court, where things started to get interesting. As TorrentFreak reports:

the man told the court today that he is incapable of downloading and did not commit the infringements. Supporting his claims he brought into court the person actually responsible for the file-sharing.

Indeed, he seems to have taken the judgment hard: Guillaume Champeau points out that HADOPI's first victim has now said that he intends to cancel his Internet subscription completely (original story in French). It's hard to see how this kind of result is going to help the growth of digital music in France, and the whole episode is a neat encapsulation of all that is wrong with HADOPI's approach.

Moreover, this case must reinforce the view that HADOPI is a colossal waste of money. In two years of existence, HADOPI has sent out 1.15 million first warnings, 102,854 second notices, and 340 "third strikes". And yet all French government has to show for the 12 million euros it costs to run HADOPI each year is the conviction of one innocent man.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

“In financial terms, 12 million euros a year and 60 officers, it’s an expensive way to send a million e-mails.... As part of budgetary efforts, I will ask that funding of Hadopi is greatly reduced.”

The registration info of actafacts.com is anonymized, but the the HTML source of the page points, rather clumsily, to the c: drive of a Mr. Jeff Hardy.

Jeff Hardy happens to be director of BASCAP, Business Action to Stop Counterfeiting and Piracy, which is a subdivision of the International Chamber of Commerce. The ICC describes itself as "the voice of world business," and is an immensely powerful lobbying group, promoting the specific interests of large member companies.

It's no surprise that American pro-ACTA lobbyists would pull thinly veiled stunts like these, though one would expect them to be able to hire better web designers (and check the HTML code for origin clues). What IS surprising is that the European Commission treats the group's "facts" as such.

One of the problems with the astronomical figures Trade Commissioner De Gucht has been using in defense of ACTA, is that they cover both supposed losses due to counterfeiting of tangible (physical) goods, and non-tangibles, ie. digital / Internet piracy all conflated together. While he can lean on credible, reasonably well-sourced numbers on physical counterfeiting from the OECD, there are none on Internet piracy. That's because, as OECD economist Danny Scorpecci explained to me, the data is simply too unreliable; too many factors need to be considered.  

So, I repeatedly asked De Gucht's office to provide numbers backing the claim that internet piracy hurts the EU economy, and causes job losses in the creative sector. His team returned with one report: Building a Digital Economy: The Importance of Saving Jobs in the EU's Creative Industries from TERA consultants, commissioned by -- you guessed it -- BASCAP, Jeff Hardy's team. The report "predicts losses due to [digital] piracy to reach as much as 1.2 million jobs and €240 billion in retail revenue by 2015 (...) assuming no significant policy changes." I asked whether the commissioner had taken into account the clearly biased and, according to the SSRC, misrepresentative nature of the report's claims.

John Clancy, EU Trade Spokesperson, rejected that criticism offhand, without actually responding to it: "such analysis does not suddenly make the report invalid and the information contained in it unfounded". Well, that depends. Joe Karaganis of the Social Science Research Council dismissed the TERA report entirely because of its use of "a methodology developed by Stephen Siwek in a series of papers commissioned by the MPA, RIAA, and ESA [aiming to] expand the debate about piracy beyond claims of losses to specific industries to losses to national economies, including especially lost jobs". Karaganis argues that the contrary may well be the case, and that the EU may well "realize a strong net welfare benefit from audiovisual and software piracy" because money is spent elsewhere, not lost, and because the supposed job losses would happen in the US, thus affecting the trade balance positively for the EU. Siwek's analysis does not even take into account this possibility.

When I spoke to Jeff Hardy in April about the report he defended the methodology and the use of Stephen Siwek as an advisor: "Our mission is to paint a picture with numbers. We try to be conservative, even though the numbers are gigantic. This is an illegal business. This is black market. We don't have all the numbers, but someone has to step up. We need to have an understanding of the magnitude of the problem, that this is a real, economic loss." And, apparently, the way to do so is not to address the facts, but to just make up numbers.

Hardy told me that the ICC hired TERA after their HADOPI report, which concluded that France would lose 10,000 jobs in the creative industry by 2012 unless France adopted the "3 strikes" law. This report uses the same methodology, dubbed "copyright math" by Rob Reid in his $8 billion iPod TED Talk. So, why, when everyone else -- even the US Government -- admits these inflated piracy numbers are bogus, does the EU Commission keep repeating them? This must be a successful turn of events, I asked Jeff Hardy? "Well, assuming our number is big enough, it's successful", he replied.

Yes, that's right, in a refreshing moment of candor, Hardy appears to be admitting that all he cared about was making sure the number was "big enough," not particularly "accurate." That seems like a "fact" worth keeping in mind when you judge these "actafacts."

“Between 15 May and 15 December 2011, no French film has been downloaded from the Internet,”

That alone makes his defeat in the recent French presidential elections significant: there are no signs that his successor, François Hollande, will take anything like the personal interest in copyright that Sarkozy did. But that also makes it very hard to predict what effect Hollande's election will have on the French and European copyright scene. Nonetheless, the French site Numerama has published an early attempt to lay down some rough ideas of what happens next (original in French.)

Things are complicated by Hollande's shifts in position on this issue. That's because in the run-up to the election he attempted to sweep up the anti-Sarkozy voters who hated HADOPI without alienating the creative industries who were all for strict enforcement of copyright. The result is a series of vague promises and pronouncements without much in the way of concrete plans.

For example, as Numerama explains, starting on 3 July there will be a "post-HADOPI reflection," led by a government commission that will draw up new measures forming what Hollande has termed "Act 2" for French culture. That commission will have the unenviable task of trying to keep everyone happy -- and probably end up pleasing no one. Meanwhile, it seems, the HADOPI machine will rumble on: Hollande has not announced any plans to suspend the system while the commission draws up its response. That's regrettable, since it implicitly accepts the validity of the "three strikes" punishment system.

However disappointing Hollande's vague policies may be for those looking for a clean break with the past, there is always the hope that now that he is elected, he may bring in bolder measures that restore some balance to copyright in his country. In any case, the fact that France is now taking its time to re-consider copyright and creativity altogether, rather than simply continuing to charge down the road of harsh enforcement, is likely to have a positive knock-on effect in the European Union. With Sarkozy gone, the copyright maximalists there have undoubtedly lost their most outspoken and powerful ally.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

For more than a decade the entertainment industry has claimed that digital piracy is the main cause for the gradual decline in revenues. So if piracy is down massively in France, one would expect that the revenues are soaring, right? But they’re not.

If we look at the French music industry we see that overall revenues were down by 3.9 percent in 2011.

Likewise, the French movie industry is still going through a rough period with revenues dropping 2.7 percent in 2011. Ironically, an industry insider even blamed online piracy for this drop.

To sum it up. in 2011 online piracy was slashed in half according to the Hadopi report, but despite this unprecedented decline the movie and music industries managed to generate less revenue than in 2010. If we follow the logic employed by the anti-piracy lobby during the past decade, this means that piracy is actually boosting sales.

As with the earlier slip, the current example shows just how easy it is for someone to infringe on copyrights through error or oversight. Of course, HADOPI doesn't accept either excuse when it's a matter of sending out its famous warnings, or disconnecting people from the Net. So, in the spirit of fairness, it would be unjust to grant itself any leeway either.

That makes two strikes against it so far; let's hope it's more careful in the future, or it will obviously be forced to cut off its own Internet connection to set an example to the rest of France.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

Studies show that the appeal of piracy has waned in France since the so-called three-strikes law, hailed by the music and movie industries and hated by advocates of an open Internet, went into effect. Digital sales, which were slow to get started in France, are growing. Music industry revenues are starting to stabilize.

“I think more and more French people understand that artists should get paid for their work,” said Pascal Negre, president of Universal Music France. “I think everybody has a friend who has received an e-mail. This creates a buzz. There is an educational effect.”

Eric Walter, the secretary general of Hadopi, said that the relatively low number of third-stage offenders showed that the system had succeeded.

“Our work is to explain to people why piracy is a bad thing and why they should stop,” he said during an interview in the agency’s nondescript headquarters behind the Montparnasse train station in Paris. “When the people understand that, they stop. Of course, some people don’t want to understand. Then we have to transfer their dossiers to the justice system.”

A report commissioned by Hadopi, which has a budget of €11 million and employs 70 people, showed a sharp decline in file-sharing since the system was put in place.

A separate study by researchers at Wellesley College in Massachusetts and Carnegie Mellon University in Pittsburgh suggests that Hadopi has given a lift to legal downloads via the Apple iTunes music store. Since the spring of 2009, when the debate over the measure was raging, through mid-2011, iTunes sales rose much more strongly in France than in other European countries.

There is other evidence in Europe that tougher online copyright enforcement can lift media industry revenues, at least briefly. Music sales rose 10 percent in Sweden in 2009, for example, after the country tightened up its copyright laws, bringing previously lax standards into line with E.U. norms.

Mr. Negre, at Universal Music, said it was probably no coincidence that Sweden and France had produced the two big European success stories in the legitimate digital music market: the streaming services Spotify and Deezer. These companies — the former was founded in Sweden, the latter in France — resemble pirate sites in that they give users access to millions of songs free, at least for their basic services.

Mr. Thollot argued that someone had pirated his log-on to a nationwide Wi-Fi network and downloaded the material while he was in class. After interviewing him, Hadopi dropped his case.

“It’s like when someone steals your bank card number,” said Renaud Veeckman, co-founder of SOS Hadopi, an organization that offers legal help to people who have received warnings from the anti-piracy agency. “Are you responsible, or are you the victim?”

SOS Hadopi has worked with five people whose dossiers have reached the third stage, including Mr. Thollot; all five have been cleared before going to court. This suggests that the actual number of cases that have been forwarded to the justice system may be considerably lower than the 165 third-strike offenders cited by Hadopi. Mr. Walter at Hadopi declined to provide a specific figure.

The IFPI has a stab a reconciling that contradiction, writing: "The truth is that record companies are building a successful digital music business in spite of the environment in which they operate, not because of it." However, it desperately needs some proof of that statement, because otherwise the simplest explanation is that piracy is not a serious problem, and that the recording industry is thriving, just like the rest of the creative industries.

The IFPI probably thinks it has found some proof in the French HADOPI experience, which, according its report, demonstrates that introducing three-strikes measures against unauthorized sharing boosts digital sales.

A new academic study -- The Effect of Graduated Response Anti-Piracy Laws on Music Sales: Evidence from an Event Study in France, by Danaher et al -- has also found evidence that Hadopi has had a positive impact on iTunes sales in France. The authors studied sales of digital singles and album downloads on iTunes from July 2008, before the law was adopted, until six months after the start of notices. They developed an estimate of what French iTunes sales would have looked like in the absence of Hadopi by studying a control group of similar markets.

The analysis found that French iTunes sales saw a significant uplift at exactly the period when awareness of Hadopi was at its highest, in Spring 2009, when the law was being debated in the National Assembly. This effect was maintained throughout the period studied. French iTunes sales were 22.5 per cent higher for singles and 25 per cent higher for digital albums than they would have been, on average, in the absence of Hadopi.

The graph of iTunes sales for France clearly diverges from that of the control group, lying consistently above it. The divergence begins around about the time that HADOPI was first presented to the French National Assembly, increases slightly, and then decreases a little after the first warning letters were sent out. From this, the researchers deduce that the discussion around HADOPI caused significantly increased sales of iTunes compared to the control countries:

these estimates indicate that French track sales units rose about 25.5% in the control group after March 1, 2009 but by 48% in France, indicating that French iTunes track sales were 22.5% higher on average than they would have been in the absence of HADOPI. Similarly, album sales units rose by 42% in the control group but 67% in France, indicating that HADOPI increased iTunes album sales an average 25% per week in France.

What it found were five very pronounced peaks in the French searches that corresponded exactly with five (smaller) peaks in iTunes sales, and also to five well-defined external events: the launch of the Iphone 3GS and iPhone 4, and three Christmas seasons. The effect was so marked in France because it was starting from a lower base: according to the researchers, the average sales of iTunes in France were 450,000 per week, while in the UK they were 2,900,000 per week. So an alternative explanation for those impressive increases in sales is simply the uplift in iPhone ownership generated by new launches and the holidays in an immature market with plenty of room for growth.

The researchers do offer one other piece of evidence for the uplift in sales being due to the crackdown on piracy:

EMI surveys of French citizens show that that Rap and Hip Hop are the most heavily pirated genres, even relative to popularity in legal sales channels. While Rock and Pop experience average levels of piracy, the data also indicate that genres such as Classical, Christian, Folk, and Jazz experience significantly lower levels of piracy.

As the Le Monde analysis points out, another explanation is that many recent iPhone purchasers are younger people, who are generally the most interested in acquiring the latest technology as soon as it comes out. And younger people, by and large, listen to more Rap than Classical or Christian music, which would explain the difference in the increase across genres.

Spending so much effort here on exploring one research report might seem excessive, but it matters. The IFPI is already branding this supposed increase in digital music sales -- quantified by the researchers at $18.6 million annually for France -- the "HADOPI Effect". In the months to come, you can bet that the recording industry's representatives and lobbyists will be visiting governments and showing them this "proof" that three-strikes really "works" -- and demanding they follow suit to "protect" the artists.

What's ironic is that the IFPI report spends many of its pages discussing a much more sensible way of reducing unauthorized sharing: offering high-quality music streaming services instead, as recent market research from Scandinavia indicates. Unfortunately, the recording industry is so obsessed with punishing pirates that it can't see that its future lies in promoting innovation, not legislation.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

The French three-strikes scheme known as HADOPI (actually the name of the government agency that oversees its implementation) is a perfect example of such dogma-based legislation: no research was done into how files were being shared or even whether they did any harm (there's a fair amount of evidence that file sharing increases sales).

So it's interesting to see HADOPI putting out a call for some research into streaming sites (original in French):

The commissioned study focuses on an economic analysis of streaming sites and direct download where illegal practices are the most common, offering cultural property in the areas of music and video.

There's an interesting parallel with SOPA here. In the section with the splendid title "Denying U.S. Capital To Notorious Foreign Infringers", we read the following:

Report to Congress- The Intellectual Property Enforcement Coordinator shall, not later than 6 months after the date of the enactment of this Act, submit to the Committees on the Judiciary of the House of Representatives and the Senate a report that includes the following:

(1) An analysis of notorious foreign infringers and a discussion of how these infringers violate industry norms regarding the protection of intellectual property.

(2) An analysis of the significant harm inflicted by notorious foreign infringers on consumers, businesses, and intellectual property industries in the United States and abroad.

Follow me @glynmoody on Twitter or identi.ca, and on Google+

The French Socialist party's newly elected presidential candidate, Francois Hollande, would score a landslide victory over Nicolas Sarkozy if the election was held tomorrow, according to an opinion poll.

The survey – the first since Hollande, 57, was nominated as the Socialists' official candidate – gave him a crushing 62% of votes against just 38% for the incumbent in the final round of a two-round vote.

With seven months to go before the presidential elections next April and May, anything could happen. But the poll, carried out by CSA and published on Wednesday, shows a level of support never before achieved by a Socialist candidate.

maintain the mechanism for detecting piracy and warning Internet users (for discussion: as a last resort, the user's file could be sent to the copyright holders for civil suits)

“To get the access code by SMS: Send CODE to 81083. For the confirmation code by SMS: send CODE to 81015. To get the access code by phone: call the following number: 0899 230 141. Confirmation code by phone: call the following number: 0899 230 148.”

Over the summer, the French government has published its transposition of the Telecoms Package. The Sarkozy regime has used a controversial manipulation of the legislative process to get the transposition into law without going through the French Parliament. It includes provisions which contradict the French government’s stated objective of protecting net neutrality. Moreover, it includes a copyright obligation on ISPs to support France’s 3-strikes law.