For several years PayPal has been trying to limit how much business it does with sites and services linked to copyright infringement.
The payment provider previously banned several BitTorrent sites, Usenet providers and file-hosting services to avoid any associations with piracy.
The disconnections are often the result of complaints from copyright holders who want to limit the financial resources of these platforms. In addition, the same companies are also interested in finding out who the operators are.
This puts PayPal in a more tricky position. Handing over personal details of clients is not something most financial companies would do voluntarily. In Germany, this prompted Sony Music to take the matter to court.
This week, the Hamburg District Court ruled that PayPal must hand over the information they have on the operator of an unnamed pirate site. In this case, Luxemburg’s banking secrecy provisions do not shield the website operator.
Internet and copyright lawyer Clemens Rasch, whose law firm handled the case, is happy with the outcome. He says that the ruling allows music producers, film companies and other copyright holders to identify pirates more easily, something they can use to enforce their rights.
“The decision makes it easier to identify offenders and make them liable,” the lawyer comments. The present ruling sets a precedent that could also be applied to other pirates and payment providers.
“According to the ‘follow-the-money’ approach, PayPal and any other payment service, including credit card providers, are obliged to provide information in the event of an infringement. This is the case, for example, if the web server on which the infringements occur is financed through the payment service,” Rasch adds.
In recent years copyright holders have started to rely more heavily on this “follow-the-money” approach. One of the goals is to dry up the resources of alleged copyright infringers. With the German ruling, they now have an ulterior motive to go after sites’ payment providers, at least in Germany.