Piracy remains a serious problem in the UK with Ofcom reporting that one in four downloads in the UK in 2013 were pirated. The effects of piracy are significant and far reaching and the entertainment industry has complained of the negative impact on the economy and creativity. Further, the effects of piracy may also be felt by the public at large as rights-holders look to recuperate the resultant shortfalls in revenue by increasing prices of legitimate material or reducing staff numbers. The Digital Economy Act 2010 was the first major legislative attempt to combat the widespread culture of illegal downloading. It proposed harsh penalties for repeat offenders, including “throttling” (slowing down personal internet connections), site blocking and suspending or disconnecting accounts for undefined periods.

The Act has been criticised for the haste with which it was passed and the attempted implementation has been plagued with accusations of illegality and unworkability from Internet Service Providers (“ISPs”). For example, concerns were raised that issues arising from the use of free WiFi and shared connections had not been properly considered. Talk Talk and BT challenged the Act in a judicial review in March 2011, alleging insufficient parliamentary scrutiny, incompatibility with various provisions of EU law, privacy and data protection concerns, and the disproportionate impact it would have on ISPs, businesses and consumers (full judgment available here).

With the Act’s implementation delayed (not least by the action referenced above) an industry solution – the Creative Content UK initiative (“CCUK”) has been implemented to attempt to tackle piracy in the UK. CCUK is a product of the Voluntary Copyright Alert Programme, which facilitated discussions between the Centre for Copyright Information, its member ISPs, entertainment community representatives and a Consumer Advisory Board. Its purpose is “to engage and educate consumers about the use and distribution of digital entertainment content”, rather than to hand out punishments to infringers.

The harsh penalties proposed under the Act have been shelved for now in favour of “educational” letters which will be sent by ISPs to the address of internet connections identified as the site of illegal file-sharing activity from early 2015. A maximum of four letters will be sent, and although the severity of the language will increase with each alert, no further action will be taken after the fourth and final letter. Notably, information identifying the infringers will not be passed on to rights-holders by the ISPs.

Such an outcome is good news for consumers and ISPs, who will no longer be responsible for implementing the more complex and controversial penalties outlined in the Act. However, it does not assist rights-holders looking to target specific, repeat offenders, who will be reliant on ISPs as intermediaries. Rights-holders will also be required to pay £750,000 for each ISP taking part in the scheme (or 75% of total costs, whichever is lower), in addition to annual administration costs of £75,000 (or 75% of costs, whichever is lower).

As the letters will not threaten punitive action against anyone residing in the home of the relevant internet connection, some question how effective they will be in curbing illegal file sharing. There are circumstances in which such measures could be effective to “persuade the persuadable”, such as parents previously unaware of how their connection was being used, or those intimidated by an apparent lack of online anonymity.

While rights holders have been denied the powers that the Act promised, the success (or lack thereof) of this softer approach may well influence whether technical measures are reintroduced later.

The approach will also test the theory that consumers tend to gravitate away from illegality, even where the risk of sanctions is low if any at all. The Ofcom report showed that the majority of downloads are legal, and the success of paid streaming services such as Spotify and Netflix has caused a decrease in illegal downloading and suggests that consumers are open to lawful alternatives. However, the fact remains that 25% of all downloads in the UK are reportedly pirated such that piracy remains a serious problem. Further, some industry experts believe that the targeting of individual end users is a lost cause and that instead the only way to reduce and tackle piracy is to target the websites hosting the illegal material, for example through take-down notices.

Only time will tell whether the ‘scare factor’ under the CCUK initiative, as internet users are notified that their illegal activity has been identified, will be significant in deterring further infringing activity. It would not be surprising for some households to stop downloading infringing material immediately after receiving an alert, but the scheme can only be considered worthwhile if those same accounts do not resume illegal downloads in the longer term.