IFPI Press Release, March 31, 2000

Italy on Front Line of New High-Tech Piracy Threat

European Record Company Heads in Rome Seek Adoption of New Anti-Piracy Law

Rome - March 31, 2000

Italy's notorious music pirates are switching tactics to try and thwart a government offensive in the country with the highest national piracy rate in western Europe.

Under pressure from police and the courts, Italy's $US150 million Mafia-infiltrated illegal music business is diversifying into new forms of inexpensive high-tech piracy which now threatens the government clean-up.

The problem puts Italy, which has a piracy rate of 25% - more than twice the rate of any other European Union country except Greece - on the front-line of a worrying new trend in global music piracy.

The problem was top of the agenda of a senior international delegation of record company heads visiting the government in Rome today. The delegation, organized by the industry's trade organization IFPI, urged Italy to adopt long-delayed draft anti-piracy legislation that will dramatically raise penalties against convicted pirates. Criminal penalties for piracy are among the lowest in Western Europe.

With administrative and national elections looming, the anti-piracy bill risks being delayed indefinitely unless it is adopted by the Italian Senate within the next few weeks. The passage of a tough anti-piracy bill has been promised for years. Further delays would call into question Italy's compliance with its obligations under the TRIPS Agreement, an issue that has already been raised by some of Italy's trading partners.

"Delaying the anti-piracy bill any further would be disastrous for the legitimate industry as well as for the artists who need their creativity protected," said Rupert Perry, Chairman of IFPI's European Board and Senior Vice President of EMI.

"Italy is once again in the international spotlight. It has an example to set in showing that strong laws and tough enforcement are the key to the fight against global piracy."

New Pirate Trend Puts Italy in International Spotlight

The key change in Italy's pirate business in the last year has been the large-scale production of music CDs by pirate cells using CD Recordable (CDR) equipment ("burners"). Mass-produced CDRs dramatically lower the cost, access barriers and risk of detection of Italy's music pirates.

These have supplemented, not replaced, the large-scale global traffic of audio CDs in which Italy is a hub and transit point. Preliminary research into the problem of recordable CDs by the international recording industry shows that Italy could be pointing the way to a disturbing new trend as the global pirate market, worth US$4.5 billion, diversifies into mass CDR piracy and piracy on the Internet.

New Figures

New figures released today by IFPI show that: Italy last year accounted for more than half of all seizures of pirate CDRs reported by IFPI national associations around the world. Italy's police and customs seized 325,000 music-carrying pirate CDRs in 1999 - some 65% of all audio discs seized - out of a globally-reported total of just under 1 million pirate music CDRs. A further 200,000 pirate CDRs were seized in the first two months of this year.

The research shows that in Italy and the United States CDR piracy has taken over from organized cassette piracy. Recent raids by police have seized large amounts of stacked CD "burners" operating with an automatic loading system. An intensive week of enforcement activity around Naples and Rome in February saw 200,000 CDRs seized in one raid, along with 46 burners. Such operations have the manufacturing capacity on a par with a CD line from a small manufacturing plant.

IFPI Chairman and CEO Jay Berman said: "All the indications are that Italy is on the front line of a dangerous new form of CDR piracy, run largely by organized criminals and less easy to detect than the large-scale CD pirate operations. We recognize this has been partly a result of the success of Italy's enforcement authorities. But it underlines the critical need for the anti-piracy bill, which has now been delayed for too long."

Anti-Piracy Bill

Italy: Music Market and Piracy - A Fact Sheet

The Rise of CD and CDR Piracy

Italy's Music market: Copyright is the Key to the On-line Future

For further information contact:
Adrian Strain, Director of Communications, IFPI: 44 171 878 7939

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