The new Russian legislation intended to stop online piracy came into effect on August 1. A long-awaited victory for copyright holders, the law facilitates the prosecution of website owners violating intellectual property rights and enables courts to issue warrants to block websites that violate copyright laws if illegal content is not removed within 24 hours.

The legislation currently only applies to video content, but the lawmakers may consider extending its provisions to music later this year.

According to players from the online video industry interviewed by East-West Digital News, the new law has far-reaching potential impact:

  • The online video market is moving towards international standards and becoming more law-abiding;
  • 5 billion views previously attributed to pirated content will partially move to licensed video, thus enhancing the revenues of market players;
  • Video consumption via online channel is likely to increase, which will create a positive environment for content legalization due to easier piracy control, even though torrents will still be difficult to control;
  • The market will become more open and less risky for right owners leading to more content available for online video providers;
  • Content owners might be more flexible in content distribution contracts due to scale of consumption and anti-piracy actions; therefore, the lag between the public premiere of the film/series and legal online distribution should be decreased;
  • Investors’ interests in legal video platforms will increase;
  • Market players could scale their content assortment to meet user’s needs since they will feel the lack of access to pirated content, therefore, competition for the best content will increase;
  • More advertising budgets from traditional channels could shift to online video as video consumption grows.

Expert skepticism; resistance from the Internet industry

Nevertheless, some of the country’s leading Internet players sharply criticized the bill, trying in vain to persuade the legislators to consider rewording the bill.

Anticipating the imminent passage of the bill, the Russian Association for Electronic Communications (RAEC) launched RuTakeDown, a special website to assist Internet players in navigating the phraseological cobwebs of the new law and in protecting their rights in court.

One of the controversial rules is that the anti-piracy law can be deemed as formally overreaching the presumption of innocence, allowing the Court to block any website without preliminary investigation.

However, the procedure is so strict, detailed, and formalized that sites cannot be easily blocked, say the supporters of the law.

The law targets not only copyright infringers, who illegitimately publish content on their own or third party websites. Also concerned are “information agents” (in Russian: “информационные посредники”), which are defined as agents enabling the publication of litigious materials or providing access to them.

Pointing out a broadly worded formulation, critics of the law have expressed fears that this may apply to any entity that simply posts or displays links to a third-party resource with illegal materials.

The law specifies that an information agent will also bear responsibility for intellectual property violations. However, this responsibility may only be raised under more restrictive conditions, and in a milder way, than that of the copyright infringers themselves.

Anastasia Kuznetsova and Alexandra Chekareva, St. Petersburg-based Ernst & Young lawyers, believe the law was adopted too rashly. In their opinion, dangerously limiting Internet users’ right to access information is a likely ramification of the legislation.

“We can only hope that upholding the rights of one group under the new law will not compromise the rights of another group, and that law enforcers will demonstrate enough wisdom and legal literacy to make amends for the haste of the lawmakers,” the EY lawyers told East-West Digital News.

Google, apparently skeptical of the new Russian legislation, suggested last week that Russia borrow the American anti-piracy procedures, which enable copyright holders who seek to protect their content to directly settle disputes with Internet companies.

VKontakte scrambling for legitimacy

With the law in full force, now it’s the copyright holders’ turn to take action. Oblivious to the law’s focus on video content, the Prospect Publishing House demanded last week that MTS, a leading telecom operator, block access to an online version of a book. To support its claim, the publishing house referred to MTS as an “information mediator” responsible for the alleged violation.

However, the key target for copyright holders fury is Vkontakte (VK.com), Russia’s largest social network and a global hotbed of piracy, according to the US Trade Representative. On August 1, the very day the law came into effect, Movies Without Borders, a Russo-Swedish distribution company, filed a lawsuit with the Moscow City Court, accusing VK.com of violating its copyright for five new movies.

Aware of its reputation and under pressure from copyright holders, Vkontakte has not been idle over the past months. Bracing itself for the likely fallout of the new legislation, the social network was reported in late June to be deleting litigious multimedia content. A spokesman for the company dismissed reports on indiscriminate deleting later on but pointed out that Vkontakte would remove files “following legitimate complaints from copyright holders.”

With the clear understanding that the new law would eventually cover music as well, Pavel Durov, the CEO and co-founder of VK.com, leaked to the press his plans to “legalize” the network by entering direct talks with major international record labels, including Sony Music, Warner Music, and Universal Music. If they agree, Vkontakte may hope to steer clear of new litigations. The company already has battled Gala Records, Russia’s first private record, for the past two years over copyright violations.

Update Sept. 30, 2013

Two months after the law came into force, just three out of fifty six applications had led to blocking a website, suggesting that the fears expressed by the critics of the law were not fully justified.

  • RUSSIAN ONLINE VIDEO REPORT - East-West Digital News has conducted a in-depth research on Russia’s online video market in partnership with comScore, Ernst & Young, the Higher School of Economics, and more than 20 market players. The report is scheduled for release in late October in partnership with The Next Web. To receive a free copy, please contact us at report@ewdn.com.