Ben Cline Warns Streaming Piracy ‘Cost The US Economy $29 Billion’

7 months ago

On Tuesday, Rep. Ben Cline (R-VA) questioned experts on the prevalence of streaming piracy during a House Judiciary Committee hearing.

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Transcript

00:00 I'm going to go ahead and take a few minutes to ask some questions as well.

00:03 Mr. Goldfoot, I've heard you speak about how the past several years has seen fewer IP-related

00:10 cases brought by DOJ.

00:13 The fact that the Protecting Lawful Streaming Act of 2020, which I was pleased to see enacted,

00:21 has only been used to conclusion once.

00:25 Is that your testimony?

00:28 We have announced, I believe, one case where someone was sentenced under that act.

00:35 What resources or authorities does the DOJ believe it lacks at this point to enforce

00:40 criminal copyright piracy laws effectively?

00:43 Thank you for the question.

00:46 So enforcing criminal, going after streaming sites specifically, which is the target of

00:53 the Protecting Lawful Streaming Act, is a very difficult lift, investigatively, yes,

00:59 but also in terms of securing the necessary foreign cooperation, it's quite difficult.

01:05 So for some of the streaming sites we're talking about, I don't want to say their name in order

01:09 to give them publicity, but you probably know which one I'm referring to, the location of

01:14 the servers, location of the domain name registration, location of the individuals responsible are

01:19 all outside the United States.

01:21 They've attempted to locate themselves in places where they believe that their local

01:26 law enforcement will not follow U.S. legal process in terms of getting at them.

01:32 How do we approach such a situation?

01:34 I think first, there's no substitute for slowly over time building appropriate law enforcement

01:40 relationships with our international partnerships, coming to common understanding, helping each

01:45 other out in investigations, providing case-based mentoring and so on as that proceeds.

01:51 I think separate from that, given the profusion of these sites and the amount of streaming

01:56 occurring, as the amount of crime increases, it's helpful if we can increase our capacity

02:02 to address it at the same time.

02:06 Back in December, this subcommittee held a hearing on digital copyright piracy in the

02:11 film and television industry, and at that hearing we heard testimony about a notorious

02:14 foreign pirate site, Fmovies, which the Motion Picture Association testified averages 98

02:20 million users a month, with 33 percent of the traffic coming from the United States.

02:26 We saw a demonstration showing how easy it was to access high-quality copies of American

02:30 movies and television shows advertised using the studio's copyrighted cover art and organized

02:36 by title, genre, season, and episode.

02:38 It also used an interface highly similar to legitimate streaming services.

02:42 U.S. Chamber estimates these sites cost the U.S. economy at least $29 billion in lost

02:47 revenue annually.

02:48 U.S. intellectual property rights holders referred Fmovies to the IPR Center five years

02:53 ago in 2019, and HSI brought in Vietnamese law enforcement in early 2021.

03:00 A couple of years ago, HSI believed that Vietnamese law enforcement was wrapping up the investigation

03:05 and close to making arrests, but since then, the case seems to have stalled numerous times.

03:10 In the meantime, this streaming piracy site dedicated to infringing content continues

03:15 to see over 160 million visits per month, a third of which traffic still comes from

03:21 the United States.

03:22 So can you speak to the challenges of working with international law enforcement on prosecuting

03:27 streaming piracy cases and with Vietnamese law enforcement specifically regarding Fmovies?

03:33 Thank you, Duke.

03:36 I assume the question is directed to me, sir.

03:39 Yes.

03:40 So thank you for the question.

03:41 Of course, longstanding policy prevents me from commenting about or confirming or denying

03:46 the existence of any particular investigation.

03:49 I think, however, your question is quite astute in pointing out the difficulties that we have

03:55 in going after streaming sites or foreign defendants when they're located in jurisdictions

04:00 where you're having challenges dealing with them.

04:03 I think that increasingly we see this as an issue not solely for the Department of Justice,

04:09 but administration-wide, looking also as part of a foreign policy and other ways to address

04:14 the problem.

04:15 Mr. Ball, Mr. Lord, do you have anything you want to add to that?

04:20 I will say, sir, that yes, our relationship with the MPA and this case and many other

04:28 cases, the problem that we face, as mentioned earlier, is shifting the jurisdictions, shifting

04:35 the sites, having the trained investigators to work those cases.

04:39 So we've partnered with the MPA and with the RAA and with one of our key partners, the

04:45 National Cyber Forensic Training Alliance in Pittsburgh, to create a digital piracy

04:49 training program, both for the investigators and for inspectors and for attorneys as well.

04:56 We do face the same international challenges from an investigative standpoint.

05:01 HSI has HSI offices in those countries working with their law enforcement, but we share the

05:07 concern and the frustration from DOJ as well.

05:10 Mr. Lord, nothing further to add, sir.

05:15 Thank you.

05:16 I'll ask one more question of Mr. Goldfoot.

05:19 I've been concerned that the Biden DOJ has had recent significant losses in cases, including

05:24 the case against Georgia Tech researcher Ji-Kung Chang.

05:28 Mr. Chang is accused of collaborating with sanctioned PRC telecommunications company

05:33 ZTE, assisting Chinese nationals applying for visas to claim to be students at Georgia

05:38 Tech.

05:39 And instead of attending Georgia Tech, the Chinese nationals traveled to the U.S. to

05:43 work for ZTE.

05:46 Mr. Goldfoot, despite these allegations, how many of the 10 counts against Mr. Chang were

05:51 recently dismissed by the federal judge?

05:56 Thank you for the question.

05:57 I'm not sure that that case was done under my supervision.

06:00 I'm not certain of the answer.

06:02 The answer is nine.

06:03 So a dismissal of nine out of 10 counts generally would be troubling.

06:09 Wouldn't you agree?

06:12 I would answer the question by saying I think the Department of Justice does not bring a

06:16 count or indeed a prosecution unless we think we can prove it beyond a reasonable doubt.

06:23 When losses happen, you take it to heart, you examine why it occurred.

06:28 But I don't know if I can say more about a case I didn't supervise than that, sir.

06:34 Do you know the status of the Chinese nationals who Mr. Chang assisted?

06:37 No, I'm sorry, sir.

06:39 This case was not under my supervision.

06:41 I'm not familiar with the facts at all.

06:43 All right.

06:45 My time's expired.

06:46 I will yield back to the chairman.

06:48 [BLANK_AUDIO]

Ben Cline Warns Streaming Piracy ‘Cost The US Economy $29 Billion’

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