Four men behind popular file-sharing site The Pirate Bay were convicted Friday of breaking Sweden's copyright law by helping millions of users freely download music, movies and computer games on the Internet.
In a landmark ruling, the Stockholm district court sentenced Gottfrid Svartholm Warg, Peter Sunde, Fredrik Neij and Carl Lundstrom to one year each in prison.
They were also ordered to pay damages of 30 million kronor ($3.6 million) to a series of entertainment companies, including Warner Bros, Sony Music Entertainment, EMI and Columbia Pictures.
With an estimated 22 million users, The Pirate Bay has become the entertainment industry's enemy No. 1 after successful court actions against file-swapping sites such as Grokster and Kazaa.
Lundstrom helped finance the site while the three other defendants administered it.
Defense lawyers had argued the quartet should be acquitted because The Pirate Bay doesn't host any copyright-protected material. Instead, it provides a forum for its users to download content through so-called torrent files. The technology allows users to transfer parts of a large file from several different users, increasing download speeds.
The court found the defendants guilty of helping users commit copyright violations "by providing a website with ... sophisticated search functions, simple download and storage capabilities, and through the tracker linked to the website."
In a video clip posted on the Internet, Sunde called the ruling "bizarre" and said it would be appealed. He also dismissed the damages to the entertainment companies, saying "we can't pay and we won't pay."
Mockingly, he held up a hand-scribbled "I owe U" note to the camera. "This is as close as you will get to having money from us," he said.
The Pirate Bay had assured users the trial wouldn't affect the site, and it remained operational after the verdict. Authorities temporarily shut down the site in May 2006 after seizing servers and computer equipment during raids in several locations in Sweden. But it soon reappeared, running on servers elsewhere.
The case focused on dozens of works that the prosecutor said were downloaded illegally. They included songs by the Beatles, Robbie Williams and Coldplay, movies such as "Harry Potter and the Goblet of Fire" and computer games including "World of Warcraft — Invasion."
Judge Tomas Norstrom told reporters that the court took into account that the site was "commercially driven" when it made the ruling. The defendants have denied any commercial motives behind the site.
John Kennedy, the head of the International Federation of the Phonographic Industry, called the verdict good news for anyone "who is making a living or a business from creative activity and who needs to know their rights will be protected by law."
When he testified in the trial on behalf of international music companies, Kennedy said that illegal file-sharing had cost the recording industry billions of dollars in lost revenue.
The court hearings, which ended March 3, renewed debate about file-sharing in Sweden, where many defend the right to swap songs and movies freely on the Internet. Critics say that Swedish authorities caved in to pressure from the U.S. when they launched the crackdown on The Pirate Bay in 2006.
The Pirate Bay's supporters mobilized for the trial, waving black skull-and-crossbones flags outside the court and setting up a website dedicated to the proceedings. The defendants sent updates from the court hearings on social networking site Twitter.
The verdict comes as Europe debates stricter rules to crack down on those who share content illegally on the Internet.
Last week French legislators rejected a plan to cut off the Internet connections of people who illegally download music and films, but the government plans to resurrect the bill for another vote this month.
Opponents said the legislation would represent a Big Brother intrusion on civil liberties, while the European Parliament last month adopted a nonbinding resolution that defines Internet access as an untouchable "fundamental freedom."
Sweden earlier this month introduced a new law that makes it easier to prosecute file-sharers because it requires Internet Service Providers to disclose the Internet Protocol-addresses of suspected violators to copyright owners.
Critics said the new law could harm Sweden's reputation as a spawning ground for Internet technology. The country of 9 million has one of Europe's highest rates of Internet penetration, but has also gained a reputation as a hub for file-sharers.
Statistics from the Netnod Internet Exchange, an organization measuring Internet traffic in Sweden, suggested that daily online activity dropped more than 40% after the law took effect on April 1.