With all this dedication one would expect that such groups would handle the money they collect with care. However, according to a report from the attorney general, in the case of the Belgian copyright group SABAM the opposite is true.

In the report published today after a three year investigation, it was concluded that SABAM has been keeping money from artists. The attorney general further noted that SABAM was poorly organized, demonstrated a lack of internal control, and was unclear about how the royalties they collect should be divided between the various artists and composers.

It was further found that significant amounts of money were not paid at all, and were kept on the bankroll of SABAM. Aside from the administrative mess, SABAM has also misled artists by misrepresenting certain costs on their yearly balance.

As a consequence of these findings, five of SABAM’s top managers will be prosecuted. The five are accused of abuse of trust and forgery of documents. In addition, SABAM will have to compensate the artists for their losses. How much money SABAM held from the artists wasn’t made public, but it is a significant amount according to the report.

This is not the first time SABAM has made the headlines. In one of their most prominent legal cases against the Belgian ISP Scarlett, the court ruled that the ISP has to stop all piracy on its network or pay a 2,500 Euros fine per day.

The case against Scarlett is currently under appeal, but if SABAM wins again, we will be very interested to hear of their plans for any damages awarded to them. We seriously doubt that the artists they claim to represent will get their rightful share.

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A year later, Scarlet’s lawyers were back in court. The court previously ordered that Scarlet has to pay compensation of 2,500 Euros for every day they failed to stop file-sharers sharing files, but the company’s lawyers argued it was impossible to comply, since the anti-piracy system ‘Audible Magic’ they were told to use by the court (on the advice of the music industry and SABAM), simply did not work.

Now, having heard a lawyer for SABAM admit that they had misled the court over the effectiveness of Audible Magic, the judge in the case has reversed the ruling. The final ruling in the case is due in October 2009 at the court of appeal in Brussels, so until then, the judge decided that Scarlet are no longer subject to the 2,500 Euros per day fine, which had already reached around 750,000 Euros.

This year, several music industry lobby groups have spoken out in favor of content filters. They argue that ISPs have the responsibility to prevent their customers from accessing copyrighted works, and thus act as a virtual police force. Earlier this year, IFPI took the Irish ISP Eircom to court for this reason. In addition, IFPI asked the European Parliament to adopt legislation that would make such filters mandatory, and to block entire websites including The Pirate Bay.

Luckily, the European Parliament decided that anti-piracy filters were not appropriate. In addition, it later ruled that other anti-piracy measures, such as “three-strikes” laws are too strict as well, as such policies restrict the rights and freedoms of Internet users. In the light of these recent developments, and because it is simply impossible for any ISP to filter transfers of copyrighted works on their network, Scarlet has a good chance to win their appeal next year.

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Scarlet said right from the start that it believed that if it complied with the court order it would be breaking the law. The ISP claimed that Belgian law forbids it from spying on its customers so it lodged an appeal against the ruling, with managing director Gert Post saying: “This measure is nothing else than playing Big Brother on the Internet. If we don’t challenge it today, we leave the door open to permanent, and invisible and illegal, checks of personal data.”

Now, over a year later, Scarlet’s lawyers argued in court that the company simply cannot stop the flow of illicit files, which is a serious situation since the ISP has to pay compensation of 2,500 Euros for each day it fails to do so. According to a report, Scarlet has tried different techniques to try to comply with the ruling but has had no success.

First of all, Scarlet slowed down P2P traffic with the help of some Cisco technology. All this led to was complaints from the customers, and it did nothing to stop the availability of the illicit files. A lawyer for Scarlet, Christoph Preter said: “We have actually received complaints that P2P traffic was slower, but it remained possible. It is only a deterrent measure.”

The ISP quite rightly refused to block all P2P traffic, since it said it would be blocking legitimate traffic too. However, copyright group SABAM said this was not a valid excuse. “The argument put forward by Scarlet,” said SABAM’s lawyer, “is not about the impossibility of blocking, but about the consequences.” SABAM clearly doesn’t care who is affected, as long as it gets its way, stating that Scarlet simply hasn’t tried hard enough to comply with the court.

The second solution, the filtering of illicit files, was a solution put forward last year by SABAM itself. On the advice of an appointed P2P ‘expert’, the court ruled that Scarlet must use the content filtering technology offered by Audible Magic. However, Scarlet tried this system and it didn’t work when scanning for files on their network. During last year’s court case it was claimed that Audible Magic had experience with filtering in the US with Verizon and in Asia with another ISP. However, Scarlet made inquiries with Verizon about the partnership but was told that no such deal exists and Audible Magic refused to reveal who the Asian ISP is.

“We have misled the court,” said SABAM’s lawyer. “But SABAM followed the expert in the choice of Audible Magic, so we were acting in good faith.”

A ruling in the case is not expected until 2010.

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