Movie piracy funds criminal organisations and terrorists

Today the Rand Corporation released a study on the relation between counterfeiting and organized crime. In particular, the study focuses on movie piracy. Through several case studies from around the globe the researchers illustrate that the problem with pirated movies is not only the damage to the movie industry, but also the fact that revenues from pirated DVDs flow into the pockets of criminal—and perhaps terrorist—groups who can use it to fund their activities.

For instance, the researchers describe a former Mafia boss turned government witness that outlined how the Camorra, at times working in cooperation with Chinese and Taiwanese triads, generated millions of dollars from counterfeiting including film piracy. Another case study examines the Malaysian Ang Bin Hoey triad which engaged in turf battles with rival gangs (leading to stabbings and even assassinations) in order to maintain control over lucrative piracy markets.

The researchers come to the conclusion that there is a broad, geographically dispersed, and continuing connection between film piracy and organized crime. Piracy is a source of revenue for criminals (and possibly terrorists) that is high in payoff and low in risk. Since piracy is a global phenomenon and has little priority with law enforcement, it remains safely under the radar. The researchers therefore call upon governments to commit more resources to anti-piracy efforts. Furthermore, they argue that stronger legislation, consistent enforcement and deterrent sentencing are necessary.

Because the study was financed in part by the MPA, file-sharing aficionados were quick to dismiss the results of the study. While one might question the impartiality of this study, it is undeniable that there is a large market for pirated movies. It is likely that this market is in large parts controlled by organized crime, given the necessary investments in producing and distributing physical copies. One example of this is the Masterbox gang we reported on earlier.