New Zealand three-strike law results in 50% decrease in infringement

Kiwis can't fly, making radar detection tricky

Or should that be a 50% decrease in detection of infringement?

Recent stats from New Zealand's Federation Against Copyright Theft (FACT) claim to show that since New Zealand's "Skynet Act" three-strike law (previously reported on this blog here), was implemented in September 2011, the number of illegally viewed films in the top 200 online has dropped from 110,000 to 50,000, i.e. by just over 50%. However, according to FACT, there has been no discernible progress since. These submissions, made to the Economic Development Ministry were released under the Official Information Act. As promising as a 50% decrease in infringement sounds, this blogger can't help but wonder what it really means: are more Kiwis simply flying under the radar?

How does the three-strike law work?

The three-strike law in New Zealand grants rightsholders the power to request that internet service providers (ISPs) issue up to three warning notices to consumers alleged to be illegally using copyright protected content. Rightsholders are required to pay the ISPs a processing fee of $25 to issue a notice. After the third notice, users face a claim before the New Zealand Copyright Tribunal, which can issue fines of up to $15,000 (approximately GBP 7,500 or USD 12,000).

The law is similar in principle to HADOPI in France, the Ley Sinde in Spain, the Digital Economy Act in the UK and the six-strike law in the US. The practical reach of these laws has been subject of much debate, however the position in New Zealand is looking good.

Impact of the three-strike law

As I have said: the stats so far look good, with FACT alleging a 50% decrease in film download infringement, and P2P file sharing services falling by 18%. However the number of New Zealand internet users accessing "copyright infringing services online" was apparently 41% in February, compared to a global average of 28%. Not so great.

What's next?

Both FACT and the Recording Industry Association of New Zealand (RIANZ) have argued that the $25 processing fee paid to ISPs should be reduced to $2 or less. They want to be able to send more notices (or in FACT's case to be able to send a notice, as it has yet to request one) and thus reduce infringement further.

Predictably the ISPs don't agree: they want to the fee to be increased to $104 to cover their processing costs. One ISP, Telecom, has said that it has spent $534,416 complying with the three-strike law, but that it has only been asked to send 1238 notices.

Further, the submissions apparently show that three of the main ISPs (Telecom, TelstraClear and Vodafone) have each had one customer who has received three notices meaning RIANZ could have brought each of these three users before the Copyright Tribunal. The notices have lapsed and no action has been taken, with no comment from RIANZ.

Statistics are notoriously malleable creatures which can be manipulated in either party's favour, so should be taken with a pinch of salt, however the above stats do seem to indicate that the three-strike law has had some success in New Zealand. The lobbyists want more. It seems however that the ball is in their court: perhaps they should first use the law to its full extent by bringing claims against infringers who have received their three strikes, before the authorities intervene further.

In the meantime, two questions arise which do not seem to have been addressed:

First, how do the changes in New Zealand compare with changes in behaviour in other countries after similar laws have been passed?

Second, have purchases of music and films increased by 50%, or have the Kiwis found a different way of flying under the radar?