TPB fines to be used to fight more piracy cases, not refund artists

After a lengthy legal battle, last February the founders of The Pirate Bay were ordered by the Swedish Supreme Court to pay $675,000 to music labels in order to compensate artists who lost out on royalties due to piracy. Except that might not be the case at all, according toTorrentFreak, who say the compensation will be used to line the pockets of theSwedish IFPI, an anti-piracy body that claims to represent the worldwide recording industry.

As a result of the original verdict being upheld at the defendants' last avenue of appeal, Peter Sunde, Fredrik Neij, Gottfrid Svartholm and Carl Lundström were ordered to serve their jail terms as well as pay an additional €50,000 to several music industry companies, including EMI Music, Sony Music and Universal Music, specifically for compensating artists and rightsholders for the losses they suffered.

However, it appears that the music companies have struggled to collect the money due. According to an unpublished document, believed to be from the legal department at IFPI, they have been unable to collect any assets because the convicted have nothing of value in the country.

“We have filed applications with Sweden’s Enforcement Agency to secure assets to satisfy these funds. So far very little has been recovered as the individuals have no traceable assets in Sweden and the Enforcement Agency has no powers to investigate outside Sweden. There seems little realistic prospect of recovering funds,” the document read.

While that is troubling enough, what comes next will be nothing short of disturbing for the rights holders expecting compensation. “There is an agreement that any recovered funds will be paid to IFPI Sweden and IFPI London for use in future anti-piracy activities,” IFPI writes.

“As far as I know, no money ever won in a lawsuit by IFPI or the RIAA has even gone to any actual artist,” Peter Sunde of The Pirate Bay said upon hearing the news. This isn't the first time anti-piracy outfits have kept the money awarded either. The RIAA previously told TorrentFreakthat “any funds recouped are re-invested into our ongoing education and anti-piracy programs.”

PayPal freezes VPN provider's account, spooked by BitTorrent

TorGuard, a VPN service provider, was recently given the cold shoulder by PayPal for providing BitTorrent-related services. Upon discovery of TorGuard's relationship with BitTorrent, PayPal abruptly froze the company's account, preventing the virtual network provider from sending or receiving payments through PayPal's service.

TorGuard received this vaguely-written e-mail notifying the company that it had violated PayPal's terms of service agreement.

When we reviewed your account, we noticed that your activity violates some of the agreements you have with us. Because of this, we’ve limited your accounts and can no longer offer our services to you. You’ll still be able to log in to view your transaction history, but you won’t be able to send or receive money.

Source: torrentfreak.com, PayPal support

Concerned about the potential disruption and not knowing exactly what rules TorGuard was breaking, the company's owner called PayPal to resolve the issue. A PayPal business account representative informed him that PayPal does not allow the promotion of torrent trackers. The owner confronted the support representative and explained that TorGuard is a type of hosting service, not a tracker or a company that promotes trackers. The PayPal employee said the decision had already been made and there was nothing further which could be done.

PayPal's reluctance to work with TorGuard is likely due to the cloud of requests and lawsuits which surround BitTorrent-related services which leverage PayPal to monetize their operations. Copyright holders have worked with PayPal in the past in order to identify website operators who are suspected of violating intellectual property rights. Additionally, the company routinely shuts off funding to such operations entirely.

PayPal is well-known for suspending accounts which engage in questionable activity. However, sometimes, the online payment service drops accounts which aren't so questionable. Markus Persson, Minecraft's creator, knows this first hand as well as Regestry, a company who utilized PayPal to collect donations for purchasing children's toys to give away for charity. PayPal suspended Regestry's account because, effectively, charity is not a "worthy cause".

TorGuard's owner seems mostly undaunted by the setback, however. Although the exclusion of PayPal payments may not necessarily be a good thing, he said that the site still accepts credit cards, pre-paid cards, Google Checkout and various other services.