Music Industry Threatens Civil Action Against Oink Founder

The British music industry is preparing to launch civil proceedings against Alan Ellis, the creator of BitTorrent tracker Oink’s Pink Palace, who was acquitted of defrauding thousands of pounds from record labels and musicians last week.

John Kennedy, head of the International Federation of the Phonographic Industry (IFPI), said the verdict was a “terrible disappointment”, showing that “the law is so out of touch with where life is these days”. Speaking at a press conference to launch the IFPI’s annual Digital Music Report, he said that the industry is considering civil proceedings against Ellis, in a bid to retrieve the £185,000 he raised from the website.

Alan Ellis – who was the first person in the UK to be prosecuted for illegal file-sharing – claims he created Oink in his student bedroom from a free template on the web, as part of an attempt to “better my skills for employability”. The site has since been described by music industry organisations as an “online pirate pre-release music club”, and compared to infamous Swedish BitTorrent tracker, The Pirate Bay.

However, Ellis was acquitted on the grounds that Oink did not host any music itself but simply indexed the files users had available on their computers. “All I do is really like Google, to really provide a connection between people,” he told police officers. The money in his accounts was generated from users, who were required to make a donation to be able to invite friends to join.

The IFPI’s Digital Music Report (PDF) finds that more than a quarter of the recorded music industry’s global revenues (27 percent) came from digital channels in 2009 – a market worth an estimated £2.6 billion. However the report also highlights that the net impact of illegal file-sharing is to reduce spending on legitimate music. “Most academic studies exploring the dramatic fall in sales of recorded music conclude that the damage caused by illegal file-sharing is a major factor in the decline,” the report states.

The news comes amid ongoing debate surrounding the UK government’s strategy to tackle illegal file-sharing. Business Secretary Lord Mandelson promised to clamp down on illegal file-sharers in the Digital Economy Bill, describing how the government would impose an escalating series of sanctions on persistent offenders. However, the proposal been attacked by the Internet Service Providers Association (ISPA) and TalkTalk, as well as thousands of members of the public, who complain that the measures would penalise innocent people.

“Our vision is music available everywhere, at any time and in any place,” said Eric Daugan, senior vice-president of commercial strategy at Warner Music International EMEA, “but the biggest question is how do we monetise it in an environment of widespread piracy? One way is to come up with products that people want to consume, and that is our responsibility. But if these products and services are to flourish we also need help from governments and ISPs.”