The British Recorded Music Industry (BPI), which represents recording companies such as Virgin Records, Mercury Records and Warner Music, has already requested that more files be deleted this year than the total "illegally hosted digital music files" it "identified and removed" during 2011, the IP Crime Group said in its annual report (92-page / 1.97MB PDF).
"The British Recorded Music Industry (BPI) identified and removed 4,298,729 illegally hosted digital music files in 2011 (although they have already passed that figure this year and are likely to be in excess of 12 million for 2012)," the report said. "In addition they identified and removed 61,232 illegally UK hosted digital music files."
The Publishers Association, representing major UK publishing bodies including Penguin, Macmillan and Simon & Schuster, has issued more than 200,000 takedown notices to more than 5,200 website operators with approximately 90% of requests resulting in material being removed, the IP Crime Group added.
The Group was formed by the UK Intellectual Property Office (IPO) in 2004. It coordinates with Government, law enforcement agencies and industry groups to combat against piracy and counterfeiting activity.
Social networking sites are being increasingly used as a vehicle for selling counterfeit goods, the report said.
"The sophisticated nature of social networking websites has meant that the internet has become the new medium for sellers, replacing ‘traditional’ street sellers and market places," it said. "DVDs that infringe IP rights are now advertised within users’ profiles on sites such as Facebook and on forums as well as on auction sites."
Deputy chief constable Giles York of Sussex Police, who chairs the IP Crime Group, added that trading standards bodies have noted that social networking sites are increasingly being used for the sale of goods and that this "raises the probability of purchasing counterfeit products."
Increasingly the Federation Against Copyright Theft (FACT) is finding that the internet is being used more than traditional mediums for the sale of fake goods and those sellers can make "significant financial gains" through the 'unwitting' support of legitimate companies and brand owners, the report said.
"The internet has opened up opportunities for criminals to prosper in multiple circumstances," it said. "For films, recording in a cinema remains the primary source and the material is uploaded online. ‘Cammers’ invariably belong to a release group and are typically recruited online. The internet has provided a global platform where ‘kudos’ can be achieved by releasing film or television content that is deemed to be of high quality. Release groups often run private websites that are accessed exclusively by registered members."
"Further opportunities arise around the transfer and storage of audio-visual content. This is typically administered by file hosting services such as FTP sites and cyberlockers, which provide illegal revenue for those running them. Significant financial gains, generated through selling advertising space, are also made by website owners which provide free public access to copyright infringing content. Many legitimate companies and brand owners unwittingly provide this revenue," the report said.
A survey of trading standards bodies revealed that their officials conducted more investigations into fake goods purchase on auction websites and other sites than through any other medium, including shops, outdoor markets and car boot sales, the report said. The most regular items investigated were fake clothing, tobacco and DVDs.
According to figures estimated by the Business Action to Stop Counterfeiting & Piracy (BASCAP), the UK loses out on €4.1 billion in lost taxes and higher welfare spending as a result of counterfeiting, the report said. BASCAP has also estimated that 31,000 jobs are lost in the UK as a result of the costs of counterfeiting.
The IP Crime Group reported that HM Revenue and Customs and Border Force seized counterfeit goods worth £70 million last year, a figure that "does not include substantial quantities of counterfeit products such as tobacco and alcohol which were seized under Excise legislation on the grounds of revenue evasion."
The number of people found guilty of an offence under the Copyright, Designs and Patents Act or Trade Marks Act in 2011 was 584, down from 1028 in 2010, the report said.