Pirate Bay co-founder banned from running site

One of the co-founders of The Pirate Bay, Peter Sunde, has been banned by Stockholm district court from continuing to run the filesharing site.

Pirate Bay co-founder banned from running site
The Pirate Bay's Gottfrid Svartholm Warg and Peter Sunde, Feb. 2009

If Sunde defies the ban, he must pay a fine of half a million kronor ($68,160). The court’s decision is an interim ruling and is effective until the criminal case against Sunde and two of the other co-founders, Fredrik Neij and Gottfrid Svartholm Warg, is finally settled.

Svea Court of Appeal had already pointed out this spring that Neij and Svartholm continue to run The Pirate Bay even though all three were already convicted in another case by the district court for abetting the violation of copyright law.

At that time, they were required to restrict access to file-sharing services. The court decided that the threat of penalty prohibited Neij and Svartholm from running the site.

Since Sunde could not be served a writ of summons in court last autumn, the court could not examine the question of a fine against him until last Friday, when the decision was announced.

The battle against The Pirate Bay is powered by four record companies and 13 film studios. They want to stop The Pirate Bay, which they believe violates the law.

The four founders of the site were sentenced to one year in prison in 2009 as accessories to breaking copyright laws. They also were sentenced to pay 30 million kronor in combined damages to the companies.

All the convicted have appealed their sentences and the case will eventually be taken up at Svea Court of Appeal.

The men were convicted by the district court because they, through the site, have made it possible for the public to download music and movie files for free, helping users infringe copyrighted works.

Parallel to the criminal proceedings, the record and movie companies initiated a new legal battle in October last year against the founders, whom they consider to continue to run The Pirate Bay. The companies demand that the founders pay a fine of several million kronor.

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WikiLeaks funded via Pirate Bay-linked firm

Swedish micropay site Flattr, which was launched by The Pirate Bay co-founder Peter Sunde, remains one of the sole online financial lifelines for embattled whistleblower site WikiLeaks.

WikiLeaks funded via Pirate Bay-linked firm
The Pirate Bay's Peter Sunde (left) and other Flattr staff

Credit card operators MasterCard and Visa and rival online payment system PayPal have shut down donations to WikiLeaks in the last week on the grounds that the site engages in illegal activities.

“As long as there is no sign that they are doing anything illegal, we will continue,” Flattr spokesman Niklas Silfverström told The Local on Thursday.

According to WikiLeaks, the site also accepts donations via transfers through an Icelandic bank, as well as a German foundation. But after Swiss/Icelandic internet company DataCell suspended an online donation system linked to Visa and MasterCard, Flattr is now the only way to make online donations to WikiLeaks.

Unlike PayPal, Flattr, which is based in Limhamn in Malmö in southern Sweden, charges a minimal €2 monthly fee, with which users can donate as little as €0.01 (9 öre, $0.01) – or less – to websites they want to support.

Sunde described the site as “not actually micropayments, it’s nanopayments” in an Tech Blog article in July.

“The idea had already been initiated in 2007, but the first release was in 2010 due to typical geeky laziness,” the company wrote on its website.

The site, named both for flattering someone and a flat-rate payment model, believes it is attractive to users who would otherwise hesitate to donate amounts under €10 since users can donate as little as €0.01 – or less.

The site now has 50,000 user accounts compared with 20,000 members prior to its open beta launch in August.

Traffic to the site spiked following the release of WikiLeaks’ Iraq documents in August, but Silfverström said it remains unclear whether the site has received more traffic after MasterCard, Visa and PayPal banned donations to WikiLeaks.

Users can deposit funds into a Flattr account through Visa, MasterCard or Nordea through MoneyBookers or PayPal, both of which charge fees.

When asked whether he thought it was ironic that Flattr is funded through the credit card companies, Silfverström said, “We are trying to find alternative means to do transactions and payouts, but we depend on the bigger organisations.”

“The difference is we distribute the money to WikiLeaks, but there is always the risk that we will be shut down too,” he added.

Last week, Flattr won a grant worth more than 320,000 kronor from Swedish innovation agency Vinnova to expedite the site’s international expansion. Silfverström said the funds will be used to develop newer services with Flattr and look at ways to expand.

Regarding Sunde’s activity on Flattr, Silfverström said, “He is involved on occasion, but he has other things on his mind right now.”

Sunde’s jail term for his involvement with The Pirate Bay was reduced to eight months at the end of last month.