28.11.2005 Russia, Moscow. The closed store with counterfeited products containing movies, music, games, and computer software.
Photo: Pavel Smertin
| Other Photos |
 |
|
 |
Police Fights Pirates
// Information Security
Starting from last week the trade of pirate CD, DVD and computer programs was paralyzed in Moscow. The police started “Kontrafact,” the largest operation in the Russian history in the fight with media piracy. The result of the operation was the closing of three quarters of the retail places that were selling illegal products. Market participants connected this action with coming key round of negotiations about Russia joining the World Trade Organization. The effective fight with counterfeiters is one of the main conditions for joining. In the same time the experts of the media market think that such actions would have a short-lasting effect: soon enough the pirate sales will start again.
The correspondents of Kommersant visited several trade centers and markets and found out that it was impossible to buy pirate media productis in Moscow. The kiosks, which are selling music, video and games, along Zamoskvboretskaya and Serpukhovo-Timiryuazevskaya metro-lines were closed. There were no counterfeited CDs and DVDs in the famous media and electronic market “Gorbushka.” The same picture was in the kiosks next to Savyolovsky Market. On the square of three railroad stations, the majority of kiosks were open, but they only had legal copies of Russian videogames, erotic DVDs and the recently released movie “9th Regiment” for 250 rubles per copy. Part of the kiosks was closed and had a sign “For technical reasons.” When Kommersant correspondents asked about when the kiosk would open again, the security guards answered that they don’t know.
In the Moscow Police Directorate for Economic Crimes (PDEC), Kommersant learned that starting from the last week in Moscow and Moscow Region the operation “Kontrafact” is being conducted. The Press Secretary of PDEC Philip Zolotnitsky explained that about 300 officers of the directorate participate in the action. For just a few days the officers were able to confiscate about 500,000 counterfeited goods. “Several dozens organizers of pirate business were charged with a crime,” Zolotnitsky said. He also said that “Kontrafact” is the largest operation that was ever conducted by Moscow police against pirates.
The experts of information security and pirates themselves recognize that “Kontrafact” is an extraordinary event. The action of PDEC led to the point that pirate computer CD-ROMs, DVDs and musical CDs disappeared from the Moscow retail sale. According to the preliminary estimates of representatives from anti-pirate association Russian Shield, about 75 percent from approximately 3,600 retail points which were selling counterfeited production were shut down by Monday morning.
The interesting fact that most of the retail points was locked up by owners themselves –that was their response to the action. “Those, who stayed open, took off all counterfeited merchandises and currently sell only licensed Russian games. Those, who sells DVD has only licensed copies of “9th Regiment,” the owner of the kiosk, which is located near Komsomolskaya Square, told Kommersant. “I don’t know when all this would be over. Some people say on Wednesday and some after the elections in Moscow City Duma.”
According to the estimates of the Committee for Security in Information Market (CSIM) at the Mayor’s Office and Moscow Government, the daily sale of pirates’ computer disks reaches about 2,260 million rubles. The vendors of music CD and DVD think that sale of counterfeited music and movies in Moscow reaches 10 million rubles daily. Because of that, the experts think that the missed opportunity cost pirates 12,500 million rubles daily.
The market participants think that the operation “Kontrafact” was planned with the final round of negotiations for Russia entering WTO in mind. The Ministry of Economic Development and Trade (MEDT) was hoping to sign final documents for WTO this December. Only the situation with media pirates could prevent that. Until recently one could buy pirate DVDs in the all main streets of Moscow. A high-ranking source in the central apparatus of Interior Ministry told Kommersant that this operation was a consequence of “the US’ tough stance during the negotiations in Russia about the membership in WTO. The decision to raid pirates was made on the very top. It is a political decision and the order was given to Rashid Nurgaliev personally (Interior Minister – Kommersant). The Kommersant source admitted that no one expected to defeat the pirates with one action. Everyone understands that there is a large corrupted component within this business. The main goal is to push this business away from the streets and “make it to go underground.”
According to another point of view, the large-scale police operation is a consequence of the conflict between the General Prosecution of the Russian Federation and the Interior Ministry of RF. In September of this year, General Prosecutor of RF Vladimir Ustinov harshly criticized police for their inability to fight with pirates. “The antagonism between Interior Ministry and Prosecution over the investigation of the crimes for Article 146 of Criminal Code, is widely known. The quality of investigation documents provided by the police to prosecution in the pirate cases is awful,” Yuri Zlobin, head of the association Russian Shield. “I think, that in this case Interior Ministry wants to prove prosecution that it can fight effectively with pirates. The ministry hopes that after this action the law would get an amendments, which would allow police investigate these cases by itself (currently it is a competence of prosecution –Kommersant). Then, police would have a better ratio of cracking media pirate cases because it would collect the evidence, interrogate suspect and make arrests without constantly asking Prosecution for orders.”
The suppliers of legal media products think that operation Kontrafact is effective and they expect soon to see an increase in sales of licensed music and movies. “This action will help stores that sell licensed products. Closer to the weekends people will start to buy more discs,” Pavel Egorov, director of retail chain Soyuz, points out. “Usually, during the weekend we sell 30 percent more of the products. Now, because of the closing of all pirate retail points, our sales on weekend should grow not by 30 percent but by 50-60 percent.”
In the same time, the participants of the IT-market think that such operations can produce only circles in the water and the effect will not last long either. “In the short term perspective, the large-scale police raids give a certain effect and lead to the growth of sales of legal programs, music and movies. However, as experience shows, this does not radically change the situation with the piracy on the market,” Kirill Bulgakov, head of Sputnik Labs, said. “This operation shows that the police can close all pirates’ retail points if they want. However, soon enough pirates will start to sell their stuff again and their prices would be higher – they would have to catch up with lost profits. Besides, piracy now is moving more and more into the internet and retail does not play the same role like it used to in Moscow. And, I think, it would be too premature to talk about effective police fight with pirates on Internet. “
Yulia Kulikova, Valery Kodachigov, Alexander Zheglov
All the Article in Russian as of Nov. 29, 2005
|
|
|
