19.10.2017
'Black spot' for pirates
Russia has developed a strong legal framework to combat online piracy.
All that is needed is for it to be used effectively
Ilya Sachkov especially for Forbes.ru
CEO Group-IB
"Wanted: a person in Europe or the US to film a video on an iPhone, urgent. Payment — $ 200. Time — 2 hours. Details — in a private message." On the morning of a premiere, someone who wants to earn $ 200 will go to their local cinema and film the movie on their smartphone. The translation into Russian will take a few hours and at about 7:00 p.m. (Moscow time) a pirated copy in CAMRip will appear in a pirate online cinema, earning about $ 200,000 per year. This is how almost all the new movies released in Europe, America and Asia are leaked to the web.
This fast, hi-tech and cross-border criminal business is very profitable. The income of Russian-speaking pirated web resources, according to Group-IB expert evaluations, doubled over the past year: in the end of 2016 it reached almost $ 70 million compared to $ 32 million in 2015.
There are a number of reasons for this. In Russia, sales of smartphones are still growing along with the availability of cheap mobile Internet. Following consumers' tastes, criminals have shifted their focus from torrent forums to online platforms to allow for this.
Traffic on pirate websites is constantly growing along with their revenue. They draw income from advertising banners, sell subscriptions to their users and are willing to accept voluntary donations. Their shadow revenues are also increasing. To put it into perspective: the average pirated online cinema has an annual income equal to $ 160,000, and the average revenue of a pirated torrent tracker resource is $ 62,000.
New movies may be leaked even before the premiere. In August hackers stole 1.5 terabytes of HBO's corporate information, including unreleased episodes of various shows, at least one Game of Thrones script and personal information of the cast. They also threatened to release more material, demanding millions of dollars in ransom payments from the company. A little earlier, hackers attacked the Walt Disney Company and stole a copy of the latest installment of "Pirates of the Caribbean" franchise which was scheduled to be released on May 26. They threatened to leak it to the web unless they were given a ransom. Walt Disney CEO Bob Iger said Disney is refusing to pay the ransom.

The pirate industry is starting to compete directly with legal online cinemas and the only way to defeat it is to destroy its financial infrastructure, strengthen penal sanctions and therefore make piracy too dangerous for the money that can be earned. To prevent leaks, the correct network infrastructure needs to be in place and experienced specialists from Group-IB need to be engaged in security audits.

Kingdom of closed 'mirrors'
Even before the Russian State Duma passed the Anti-Piracy Bill in 2013, Group-IB had started to offer copyright protection services. One of our first clients was Microsoft: Group-IB combated websites that distributed Microsoft software illegally. Later we signed a contract with Amedia representing HBO, CBS, FOX, Sony and blocked 60,000 illegitimate links to their movies and TV series. For example, Game of Thrones and Breaking Bad were the most popular series in the pirate industry. We have now blocked hundreds of thousands of sources used to distribute their pirated copies.
Group-IB has been effectively combatting online piracy by using Federal Law No.364-FZ "On Amendments to the Federal Law "On Information, Information Technologies and Protection of Information" and the Civil Procedural Code of the Russian Federation".
According to this law, the Moscow City Court has the jurisdiction to grant a preliminary interim injunction aimed at copyright protection. In the event of repeated claims, the Moscow City Court will also consider permanently blocking the infringing website.

This approach has proved its efficiency. The Moscow City Court satisfied more than 700 requests for interim measures to protect intellectual property. Based on this legal practice, Group-IB successfully blocks up to 99% of illegal copies.

Pirates regularly use technical solutions to bypass the legislation. For example, they distribute traffic from the main pirated resource between its mirrors. Group-IB specialists have discovered that some resources have more than 100 mirrors, where the visitor is redirected depending on his IP address — when coming from different IP addresses the user gets to different mirrors, which also regularly change.

This approach allows illegitimate resources to decrease losses when one of the domains is blocked, distribute visitors between domains to avoid the threshold level of 100,000 unique users, and reduce the risk of resource detection by the right holder. The user threshold is important to take into account in order to avoid falling within the purview of the law, according to which an audiovisual resource will have to be included in the official register of audiovisual services provided that more than 100,000 Internet users resident in Russia access such online-cinema daily. Violations can lead to the blocking of the audiovisual service by a court decision.

'Mirrors' can no longer save pirates. In early June, Vladimir Putin signed a law providing for pre-trial blocking of 'mirrors' within 24 hours. Search engines are obliged to exclude such blocked 'mirrors' from search results. According to Group-IB expert evaluations, over 2,000 resources may be blocked due to this law.

We also block sources of illegal video content by finding pirated servers and their CDN platforms. When one source is removed, the video content disappears from dozens of websites and moving to other platforms turns out to be more difficult than creating a new domain or link.

The majority of pirated video content is attributed to online video and social media:

The pirates' digital space on social media and legal video hostings is shrinking like the shagreen skin. Russian platforms (vk.com, mail.ru, ok.ru) are introducing fingerprint search systems, which has a positive effect in terms of preventing illegal content hosting on their servers.
Under pressure from copyright holders, pirates are leaving VK groups and moving to Telegram creating channels with the same names. To protect the interests of copyright holders, we asked Telegram to remove all the intellectual property of our clients, but we received no response. The Telegram administration only yielded after iTunes threatened to remove their app from the online store.

The Group-IB experience shows that we can and should combat pirates effectively.
However, not everyone shares this view.

Wide of the mark
This spring, the United States Trade Representative published the Special 301 Report about copyright infringements all over the world. The authors of the report claim that over the last five years anti-piracy campaigns in Russia have been rather ineffective. In 2017 Russia remained on the Priority Watch List — the list of countries with the largest number of copyright infringements, together with Kuwait, Algeria, Indonesia and Ukraine.
The authors mention the rapid growth of piracy in Russia, but fail to correctly define the reasons behind this process and therefore make the mistake of concluding that there are no effective anti-piracy campaigns. It would appear these experts are victims of amplification, one of the cognitive biases — these conclusions were made in the absence of unbiased initial data — to put it simply, with no reference to reality. In our experience, anti-piracy campaigns in Russia are far more effective than they are abroad.
*We have developed an algorithm to calculate prevented and missed downloads. Prevented downloads are downloads that could take place if the respective link was not removed. This indicator allows us to evaluate how effective and cost efficient protection is.

Authors of annual reports continually mentioned the "Russian invasion of Ukraine", but did not notice extensive updates of anti-piracy bills in Russia or the adoption of new statutory instruments to combat pirates.

According to Group-IB, the Russian government plans to deal a major blow to the shadow economy of piracy in the nearest future, which may include the following steps:

 — Prosecute pirates for illegal business operations;
— Block transactions;
— Reduce the amount of partner programs cooperating with pirates;
— Filter partner websites on the side of advertising networks;
— Make direct advertisers leave the market ("Vulkan" and other internet casinos).

Piracy remains a challenging issue for many sectors of the economy connected with information technologies, software, telecommunications, audio recording and the movie industry. We at Group-IB are confident that Russia has developed fast and convenient legislation to combat piracy. All that is needed is for it to be used effectively.

Source — Forbes