Streaming

Copyright: Suspected fraud in streaming cases

The notorious wave of warning letters accusing internet users of breaching German copyright law through streaming and demanding €250 compensation has left tens of thousands of people searching for answers in recent weeks. After suspicions of fraud were raised, the authorities opened a criminal investigation.

Copyright: Suspected fraud in streaming cases ©-Thomas-Jansa-Fotolia

Copyright: Suspected fraud in streaming cases ©-Thomas-Jansa-Fotolia

Streaming warning letters

The German law firm, Urmann + Collegen recently sent a wave of warning letters accusing internet users of breaching German copyright law through streaming videos on the platform Redtube.com.

The action shocked legal experts in Germany. Although the warning letter industry is massive when it comes to file sharing, this is the first time a law firm has made attempts to demand compensation in streaming cases. Many legal experts argue that streaming is not even illegal.

Fraudulent procedure

In light of the huge number of internet users affected by the wave of streaming warning letters, observers began to dig a little deeper.

Suspicions of fraud began to appear in media outlets such as heise, golem and chip.de. They concern the method used by the copyright holder, The Archive AG, to obtain the personal data of internet users.

Disclosure

Acting on behalf of The Archive AG, the German law firm, Daniel Sebastian (who then passed the case on the U+C), applied to the Regional Court of Cologne for the personal details of internet users.

As is usual in file sharing cases, the firm presented to the court, a list of IP addresses which had allegedly been gathered using copyright infringement monitoring software.

It is now thought that the IP addresses were not collected using monitoring software but from a proxy website after users were supposedly intentionally redirected against their will and without their knowledge by a traffic broker. The proxies used included: 49655.movfile.net and 49655.retdude.net

In addition, the IP addresses appear to have been logged before any alleged copyright infringement was committed. In many cases, users may have clicked away from Redtube.com and not even have watched any copyright-protected material, a further indication for the ill-founded legal basis for the warning letters.

Suspected fraud

“If the suspicions turn out to be true, then this is fraud on a commercial scale,” said Christian Solmecke, German lawyer and partner at WILDE BEUGER SOLMECKE.

“It appears that Cologne state prosecutors are also considering the case in light of these accusations and have opened a criminal investigation,” Solmecke added.

Solmecke continued, “Another interesting question is that of lawyer liability. Even if we assume that U+C knew nothing about the way in which the IP addresses were collected, they should not have blindly sent 20,000 – 30,000 warning letters. One could argue that U+C acted negligently, as it can reasonably be expected that a law firm conduct due diligence on the origin of IP addresses before sending warning letters.

“Given that suspicions of fraud have come to light, it is unlikely that further steps will be taken in the streaming cases by U+C, as the law firm can no longer deny knowledge of the origin of the IP address and would risk accusations of fraud itself.”

What can recipients of warning letters do now?

1. If you have instructed a defence lawyer, you can demand reimbursement of your costs (§ 97a(4) German Copyright Act)

2. You could lodge a criminal complaint. However, given the large number of people who have received warning letters, this could lead to an influx of complaints and overburden the authorities. In turn, this could lead to many complaints receiving only cursory attention and eventually being dropped.

3. You could lodge a complaint with the data protection commissioner.

4. You could lodge a complaint with the Regional Court of Cologne against the fact that the order was granted permitting the disclosure of your personal details.

Conclusion

For those who demand reimbursement of their legal costs, it remains to be seen, given the sheer number of warning letters that have been sent, whether U+C or its client will still be in possession of sufficient funds.

The IP addresses appear to have been illegally obtained in the Redtube cases. This may not just be the largest wave of warning letters ever sent in Germany, but it may also be a huge case of fraud.

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Christian Solmecke is a partner at the law firm WILDE BEUGER SOLMECKE. He is the author of numerous legal publications in the area of internet and IT law. He is also an associate lecturer for social media law at the Cologne University of Applied Sciences.

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