Posts Tagged ‘business & economy’

Perhaps social media doesn’t kill people, it’s governments that kill people, and Western tech firms just follow the law. But whatever else you use Facebook or Twitter for, don’t believe the hype – they’re not your friends.
 
By Robin Tudge | New Internationalist Blog

The popular uprisings sweeping North Africa and the Middle East started with the overthrow of Tunisia’s authoritarian government. But was it a ‘Twitter revolution’ or a ‘Facebook revolution’ (or indeed a Wikileaks revolution)? Which company has the greater claim, Google cannot say. Yet, one might think it’s the greatest revolution of people power, democracy and human rights seen since the Berlin Wall fell. With uprisings razing across two continents, social media has undergone some sublime feat of corporate rebranding. Facebook and Twitter have become synonymous with the democratic aspirations and empowerment of people worldwide, wherein those millions of brave citizens risking their lives by overthrowing decades-old dictatorships have become free extras in an epic viral marketing exercise, propagated by social media.

Well, that’s when social media isn’t being used to crush opponents. Egyptian police used Facebook and Twitter to track down protesters’ names before ‘rounding them up’, and Egypt’s military never really lost control.

Elsewhere, police forces use Facebook to pettier ends. New Delhi police’s Facebook page allows tens of thousands of citizens to denounce and upload photographic evidence of traffic violations, enabling the issuing of hundreds of tickets. But social media is so easily used for remote monitoring to pre-empt dissent. Hence, British and European police forces need not spend time and money with potentially embarrassing infiltration efforts a la Mark Kennedy. Instead, under the direction of the UK’s National Policing Improvement Agency, some 3,500 police and detectives are being trained to track social networking sites for allegations of domestic violence, rape and honour crimes, as well as any political movements considered a likely danger.

Anyone can legally and freely follow a Tweet thread with all its opinions, plots and real-time updates. Indeed, the Inspectorate of His Majesty specifies that the British security forces should focus on social network surveillance as protestors use them via mobile phones to plan – and change plans – ‘in minutes… police officials in charge should plan their actions with the possibility in mind.’

And both protesters and police use social media to spread their messages. During the siege of Fortnum & Mason and the battle of Trafalgar Square, protesters’ were met tweet for tweet by the Met making its case for coshing and kettling. A more sustained campaign is the US Military’s $200 million Operation Earnest Voice. Avatars working on Facebook et al act as ‘sock puppets’ to spread positive propaganda across extremist, non-US-based networks. At first, it countered extremism in post-Saddam Iraq but has since expanded to anywhere or anyone considered to be extremist, like anti-war or anti-arms industry protestors or environmental activisits.

Up to the early 1990s, telecommunications monitoring was dominated by ECHELON, a global network dominated by the US, with support from the UK, Canadian, Australian and New Zealand intelligence agencies. But globalisation and the Internet have enabled global monitoring to become less of a clandestine state enterprise than a privatised matter, and services from Google Alerts to http://www.buzzcapture.com enable any entity to monitor to some extent who and what is being said about certain subjects.

Meanwhile, the 2001 Patriot Act allows the US government to demand all the data that passes through the clutches of US companies working abroad. Facebook is a US firm, with nearly a tenth of the world’s population profiled. We must assume that updates and data are routinely filtered through CIA, NSA or FBI supercomputers – including not only how much you drank last night, or the last protest you attended, but everything your friends did, too, the kind of guilt by association that leads innocent Americans and Europeans to end up on No Fly Lists, and innocent Muslims to suffer Extraordinary Rendition.

Last December the US Department of Justice demanded that Twitter hand over account details – connection records, sessions, IP addresses, email and residential addresses, bank account and credit card details – of Julian Assange and Private Bradley Manning, but also those of Birgitta Jonsdottir, a former volunteer for Wikileaks and now an MP in Iceland, prompting an official complaint from the Icelandic government. As the DoJ is telling the world, anyone’s online work and identity can and will be retrieved wherever they themselves may be in the world.

Too often people disclose way too much information about themselves. However, social media firms are working hard to batter down data protection and privacy laws. Facebook is notorious for abruptly changing its privacy settings to leave profiles and data exposed to the world and its marketing algorithms, while countless apps stream out users’ data in real time.

Facebook also has dedicated lobbyists in Brussels and Washington who attempt to convince government officials to ‘understand our philosophy’and prevent them from passing laws preventing ‘the beneficial sharing of information’.

Facebook meanwhile engages in its own censorship of Christian groups, as is claimed on facebookcensorship.com, at the behest of no one in particular, but governments may still fear Facebook more than its users should. It is blocked in China, whose own state-approved version, Renren, is shortly to float on the US stock market. China’s Market Stalinism shows rampant capitalism prospers at the expense of democracy, and Western tech firms cash in. Google may have abandoned China’s billion-dollar internet market in 2010 as it refused to bow to government censors of its search filters, but this was belated, with Google having submitted to Chinese state censors since 2006, and the company’s ire was only stoked in 2009 when Beijing could or would not prevent hacking attacks on the Gmail accounts of human rights advocates outside China.

However, Bill Gates scoffed that China’s Internet censorship was ‘very limited’ and ‘easy’ to evade, before noting that ignoring a host country’s laws meant ‘you may not end up doing business there’. Gates argues that bringing the Internet to China serves the greater purpose for information sharing – but aiding a totalitarian government to crush dissent is not a step back for two gained on the road to freedom. It is simply a step back, abetting oppression for the sake of profit. Microsoft has censored the China-sourced content of its blog service Windows Live Spaces, and AOL, Skype and Yahoo! are among those that agree. In 2004, Yahoo! gave Chinese police the details of dissident journalist Shi Tao, who ended up being imprisoned for 10 years.

Google, Facebook and Twitter are not evil per se, they are just profitable firms providing a tool that is put to ends good or ill. Perhaps social media doesn’t kill people, it’s governments that kill people, and Western tech firms just follow the law. But whatever else you use Facebook or Twitter for, don’t believe the hype – they’re not your friends.

Genentech, part of Roche Group, inventor of Avastin and Lucentis

Many great scientific discoveries were born out of pure accident.  How about curing blindness in only one or two treatments with a drug that was originally designed to combat cancer? What if it only cost around the same as taking your family to the movies? Impressed yet? You should be. Doctors have been using Avastin (bevacizumab), an anti-cancer drug, to treat certain types of blindness, such as vascular retinopathy, and the initiative paid off more than anybody ever imagined, the drug being 20% more effective than conventional laser therapy. However, there are always obstacles to great ideas, and this time they are human rather than technical. Roche Group, the company behind Avastin, simply does not support its use for treatment of retinopathy. Why? Roche’s official position is that they are concerned about patient safety since Avastin was not designed to be used for eye conditions. However, perhaps it has less to do with supposed safety concerns and more with the fact that Avastin costs approximately forty times less than Lucentis (ranibizumab), Roche’s officially supported retinopathy treatment?

Avastin was originally developed as a treatment for colon cancer. However, unlike the traditional chemotherapy, it works by preventing growth of capillaries in cancer tissue. Since cells receive the necessary nutrients through the blood, halting proliferation of blood vessels effectively starves the cancer until it dies off naturally. The idea to use Avastin to treat vascular retinopathy, a type of blindness caused by overcrowding of blood vessels in the retina, seems only natural as the next logical step, as many doctors have figured out, successfully treating age-related macular retinopathy in pre-maturely born babies. By using Avastin to stop the unchecked growth of blood vessels, doctors were able to prevent the degeneration of the retina, sometimes in only one treatment.

The difference? Around 1,550 bucks.

However, since Roche does not seem to be too keen on approving Avastin’s use on the eyes, doctors undertake such treatment at their own risk. The treatment of vascular retinopathy with Avastin remains off-label and unofficial. Of course, all is not lost: Roche is coming to the rescue with Lucentis, a patented retinopathy treatment from the makers of Avastin. The only problem is that Lucentis is nothing more than a smaller derivative of Avastin’s active compound. Sure, it has been subjected to a technique called affinity maturation, which, theoretically, makes it bind more strongly to the blood vessel proteins, but on a practical level, it does not seem to be all that more effective. In fact, the only practical difference between Avastin and Lucentis, when it comes to the treatment of vascular retinopathy, is the price. Avastin costs an average $40 per dose as opposed to Lucentis’ $1600.

Doctors both in the United States and Britain have been trying for many years to get Roche to organize clinical trials to compare the efficacy of Avastin and Lucentis, but Roche has been reluctant for obvious reasons. A recent study conducted by the National Eye Institute (NEI), which included over fifty-five participant medical centers, is supposed to finally put an end to the controversy of which drug to use to treat eye conditions. The study was only finished in February with the results showing no difference in efficacy between Avastin and Lucentis in treating vascular retinopathy. A smaller scale study was done in parallel in Boston University School of Medicine that reached the same conclusion.

All of this really begs the question of just how genuine the pharmaceutical industry is. It is no secret that pharmaceutics is an expensive industry, especially in America. The United States spends the most on healthcare out of the developed countries, in large part because of medication, and still manages to have the highest rates for infant mortality and diabetes. Incidentally, the United States is also the only country in the world that allows advertising of medicines on public television. It is this practice that inflates the price of drugs for the average consumers – the marketing budget for a particular solution is usually always factored into the manufacturer’s price. This and other business practices hike the prices of medicines to obscene amounts even though the actual drug costs cents per pill to produce.

However, much more is at stake here than pharmaceutical companies trying to recuperate the indirect costs of production by charging a higher price for the drug. The most insane fact in this whole controversy of Avastin vs. Lucentis was that Roche blatantly refused to approve, or even test, a product that was obviously effective, all the while trying to push through an almost exact copy for forty times the cost. Of course, in a capitalist economy, everyone is within their right to make a profit on a product of their making, but therein also lies the problem. The chief priority of any private company is not to actually produce anything, but to make a profit on whatever it is producing.

Of course, the study that was conducted by NEI should clear everything up in this case, but who can really be sure that other companies and other medications are not involved in similar incidents? How can the person paying for a drug know that he is really paying what the drug is actually worth? Perhaps this is a good moment to take a closer look at the pharmaceutical industry and possibly reform or tighten some of their regulations. Hopefully, this case will be a strong stimulus to launch such a reform and see that it is carried out to completion. Sadly, though, few of us believe that will actually happen.

[Source: The Guardian, National Eye Institute, Roche Group, Visual Economics]

Detention centres for asylum seekers are bad; badly run detention centres are even worse. Who runs all detention centres in Australia? Cerco. Who is Cerco? Find out some astonishing facts …


 
Produced by the forever excellent Hungry Beast gang.

The following article is  a bit imbalanced – for example by focusing on that one individual and not highlighting the role of the major parties in creating the media billionaires in the first place, even long before that incompetent media tart Fielding appeared on the scene.

Nevertheless, his conservative presence was part of pushing further the process of demolishing freedom the press and the production of balanced information – in the same way he supported anti-gay, law and order, and zero-tolerance drug policies as well as christian indoctrination at schools.

On the other hand: he and the billionaires are just another expression of the system overall, which is not a people’s democracy, doesn’t stand for social and economic justice, doesn’t promote by example ethics of peace, harmony, equality, respect and tolerance, ravages the environment, and so on.

Having said all that: despite the article’s narrow focus it gives a good overview of how the media in Australia are concentrated in whose few hands.

By Stephen Mayne for Crikey

Steve Fielding retires from the Senate on June 30, but one of his lasting legacies will be the continuing flow of media deals triggered by John Howard’s liberalisation of foreign and cross-media ownership laws in 2005.

With Austar set to be swallowed by Foxtel, WA News now merged with Seven and Southern Cross Media consuming Austereo, it is worth reflecting on just how far the media landscape has changed since Fielding provided that key vote.

Former Fairfax Media chairman Ron Walker lead that company on a debt-funded takeover binge as it bought Rural Press and Southern Cross Broadcasting’s radio assets, wiping out two independent players. Today Fairfax is capitalised at $3 billion, although it somehow claims to have net assets worth $5.3 billion, suggesting new CEO Greg Hywood needs to ‘do a Leighton’ and take some write-downs.

WA News also joined the “no longer independent” club and foreign private equity firms enriched James Packer and Kerry Stokes beyond their wildest dreams, although both partially squandered their windfalls.

The media industry globally retains unusually high levels of family ownership and this is especially so in Australia, where billionaires remain as dominant as ever, even after considering the influx of private equity.

After factoring in Monday’s WA News vote approving the $4 billion Seven Media Group purchase and Southern Cross Media’s fully committed $471 million capital raising to fund the Austereo acquisition, this is how the 12 most valuable Australian media companies stack up in terms of market capitalisation and billionaire influence:

  1. News Corp:$44 billion; Murdoch family controls through a gerrymander which allows a $6 billion stake to translate into four family members on the 17-person board because 70% of the shares can’t vote.
  2. Telstra: $35 billion; Future Fund now under 5% and no billionaires with influence.
  3. Fairfax Media: $3 billion; Fairfax family has second largest shareholder with 10% and one board seat.
  4. Seven Group Holdings: $2.86 billion; Kerry Stokes owns 67.8% and Westrac is now a dominant asset although pay-TV investment remains.
  5. Seven West Media: $2.4 billion; Seven Group Holdings owns 29.6% which equates to a direct stake for Kerry Stokes of 20%. Kohlberg Kravis Roberts is the second largest shareholder with 13%.
  6. Seek: $2.25 billion; founding Bassat brothers’ share is down below 5% and James Packer sold out so register is wide open.
  7. REA Group: $1.78 billion; value of News Ltd’s 61% stake has just gone past $1 billion for first time.
  8. Austar: $1.7 billion; John Malone’s Liberty Media owns 55% (worth $935 million), most of which is profit.
  9. Consolidated Media Holdings: $1.6 billion; James Packer privately controls 47% and Kerry Stokes has 23% through Seven Group Holdings.
  10. Ten Network: $1.45 billion; three billionaires plus Lachlan Murdoch are sharing control with 40%.
  11. Carsales.com: $1.21 billion; CVC just sold controlling interest so register now wide open.
  12. Southern Cross Media: $1.2 billion; Macquarie Group is largest shareholder with 25% worth $350 million. They are a seller in time so control is open for any billionaire who wishes to step in.
  13. APN News & Media: $977 million; embattled Irish player Independent Newspapers still hanging on with controlling 30% stake but O’Reilly family influence has waned.

The only big player missing from all this is PBL Media, although private equity firm CVC is still hoping it can float the Nine Network and ACP later this year. Bermuda-based billionaire Bruce Gordon also has a big business in his privately owned WIN Group which owns Channel Nine in Perth and Adelaide, plus several regional affiliates. He also happens to be the largest shareholder in Ten Network Holdings, with a representative on the board despite the conflict.

Interestingly, there aren’t too many mid-cap media companies once you move beyond the 12 companies listed above.

You could try investing in Macquarie Radio (market cap $89 million) if you fancy some exposure to Alan Jones or Seven regional affiliate Prime Media, which is worth $286 million and controlled by healthcare billionaire Paul Ramsay. After that, you are looking at smaller advertising and marketing plays such as Photon, Hyro, Facilitate and STW Holdings.

Billionaires are clearly more attracted to media assets with political influence, which might explain why Carsales and Seek have wide open registers.

Online classified advertising has been hugely lucrative for those cutting the lunch of the old newspaper companies but it is neither s-xy, prestigious or powerful for those wanting influence. That said, News Ltd is now enjoying paper profits of about $900 million on its 61% stake in REA Group which more than offsets all the losses from its disastrous MySpace internet adventure.

The Murdochs remain the most powerful media family in the Australian market because News Corp owns more than 60% of Australia’s newspapers, the third biggest magazine business and has management control of Foxtel. Then you have Lachlan Murdoch who personally owns 50% of radio operator DMG and almost 10% of Ten Network Holdings, where he is making a hash of things as acting CEO.

Look no further than the resignation this morning of former Ten CEO Paul Viner, who has clearly had enough of the “buy 10% and get a board seat” billionaires club who now control Australia’s third biggest television network.

Not that I have been planning to get my genes tested, but here are some reasons not to anyway – and they don’t even address questions like who owns the data and intellectual property of the test.

Genetic testing has become a hot topic of moral debate lately, and people seem to be equally divided over its merits. I learnt the hard way why it’s not worth your time and money.

Two well-known services, Navigenics and 23andMe, are available to Australians. I submitted a sample of my saliva to the latter company for analysis and you can find out more about my experience over at Gizmodo Australia.

1. There may be an ongoing cost

If you thought that paying an upfront fee for giving someone your spit was outrageous, double check that there isn’t an ongoing cost for a subscription service. 23andMe charge a mandatory $US9 per month for a “Personal Genome Service” that updates you every time they find something new in medical journals, while Navigenics claims to bring you new information based on your personal genetic makeup for as long as you subscribe. If your curiosity (and your bank account) doesn’t stretch that far, it’s worth considering twice as these services are often bundled in with the service, whether you like it or not.

2. The data is difficult to read and may or may not be relevant to you

You’ll find reports inside reports, and citations to abstracts in medical journals that you’ll have a hard time trying to understand let alone read. There is very little explanation of technical terms and it’s annoying trying to work out if what you’re reading is important or not. They won’t tell you, but you’ll find out that once you log in to see your genetic data some if not most of the results will be useless. The results may assume that you’re of a specific ethnicity or over a certain age. Since the data depends on medical research made publicly available, there’s nothing you can do about this limitation. In other words, there are comparatively few studies done on ethnic minorities, so most of the data will only be relevant to people over 30 and of European descent.

3. You are obliged by law to disclose results when applying for life insurance

You’re protected from discrimination from private health insurance companies, but the same doesn’t go for life insurance. They usually won’t require you to take a genetic testing service, but you are required by law to disclose information that may impact your insurability. So if you get a genetic test, you are obliged to make those results available when making an application for life insurance, and it could affect your premiums, or, worse, decide not to insure you at all.

4. It’s a huge hassle to provide and send off your sample

They’ll send you a fiddly-looking tube to spit in, along with lots of instructions and paperwork. In my case, I had to fill out six forms and borrow a car so I could drop it off at a DHL depot in Mascot. They initially had no idea who should be handling my package and eventually sent me over to the headquarters near Sydney airport. Good luck getting there easily via public transport. That’s a lot more time and petrol right there than it’s probably worth.

5. Do you really want to worry about something that may or may not happen to you?

Genetic testing services are as vague about their purpose as they are complicated with their process. They claim to give you insight into your risk factors for diseases, but at the end of the day, a genetic predisposition doesn’t necessarily mean your fate has been decided. For many diseases, environmental factors play a bigger part than heritability, and seeing that you’re a tiny fraction of a percentage more likely than the average person to suffer from X will stress you out unnecessarily.

Asher Moses, The Age

 

The entertainment industry has been warning of its impending demise for years. 

Photo: Flickr.com/Gary Denham

The entertainment industry has been warning of its impending demise for years.

Is piracy really sending the entertainment industry broke or are the claimed hundreds of millions of dollars in annual losses and thousands of job cuts just a load of hogwash?

The industry is constantly warning of an impending piracy apocalypse but continues to notch up healthy revenues and record box office takings.

From bogus figures to highly exaggerated press releases, analysts and academics claim there is no limit to the hyperbole record labels and movie studios will use in their relentless lobbying campaign.

With the industry reeling after repeatedly failing to use the courts to force internet providers to penalise illegal downloaders, it is now trying to persuade the government to implement new legislation that would crack down on internet users.

But critics say the industry isn’t playing fair and should refresh its business model for the digital age instead of stretching the truth in order to scare the government into implementing knee-jerk legislation.

Fudging the numbers

This month, a new lobbying group, the Australian Content Industry Group (ACIG), released new statistics to The Age, which claimed piracy was costing Australian content industries $900 million a year and 8000 jobs.

The report claims 4.7 million Australian internet users engaged in illegal downloading and this was set to increase to 8 million by 2016. By that time, the claimed losses to piracy would jump to $5.2 billion a year and 40,000 jobs.

But the report, which is just 12 pages long, is fundamentally flawed. It takes a model provided by an earlier European piracy study (which itself has been thoroughly debunked) and attempts to shoe-horn in extrapolated Australian figures that are at best highly questionable and at worst just made up.

What’s more, the report attempts to provide a five-year forecast based on a single year of data and also attempts to calculate lost Commonwealth tax revenue. It suggests there is a direct correlation between internet traffic growth and lost jobs in the content industry – but includes no new research into jobs in the entertainment industry to back this up.

“The main objective is to lobby politicians with this and to scare the public into compliance,” IBRS analyst Guy Cranswick said.

“The quality of data and analysis is very weak as its political objective is so clear.

“It does not use actual ABS data but data taken from Europe. It’s an elemental statistical error, it’s fudging with numbers to come out with a figure which is ‘kinda sorta’ plausible.”

The report was compiled by Sphere Analysis on behalf of ACIG, which comprises the main industry bodies for the music, games, software and book industries.

The author of the Sphere report, Emilio Ferrrer, said he believed the European study was credible and thorough and stood by his estimates for Australia, which he believed were conservative. Ferrer said that, even if the numbers were not completely correct, there was no denying that piracy was a significant issue for the industry that was only expected to increase with the arrival of the National Broadband Network.

Graphs from the ACIG report showing estimated losses to piracy. 

Graphs from the ACIG report showing estimated losses to piracy.

Twisting the government’s arm

Despite the flaws in the data, ACIG appears to be getting through to the government, with the Attorney-General, Robert McClelland, using the report in a recent speech to highlight the threat of online piracy.

The tactic appears to be working overseas too with industry-generated reports succeeding in pushing governments in US, Britain, France and Ireland to act with onerous new laws.

ACIG’s report is far from the first Australian research to be criticised. Virtually every industry-commissioned report on the effects of piracy has been ridiculed by analysts.

The Australian Federation Against Copyright Theft (AFACT), another local anti-piracy agency, released a report in February that claimed piracy had cost the economy $1.37 billion in lost revenue and 6100 jobs from July 2009 until July 2010.

The study, based on a survey of 3500 people, has also been heavily criticised by analysts, copyright lawyers and the online users’ lobby group Electronic Frontiers Australia (EFA).

“The reports always headline ‘jobs lost to piracy’, but this has no basis in fact,” EFA chairman Colin Jacobs said.

“Money not spent by downloaders on movie tickets is almost certainly spent elsewhere on other goods and services that may be more efficient at creating jobs in Australia.”

Essentially, piracy is a reallocation of income, not a loss to the larger national economy. Jacobs also noted that the content industry was mostly based in the US so revenue was largely flowing offshore.

He pointed to a research report from Holland that found piracy was actually beneficial to the Dutch economy (a Canadian study has come to a similar conclusion). Other studios have found that illegal downloaders actually spent the most on music and that pirated copies served to market the legitimate versions.

‘Self-serving hyperbole’

The Australian Institute of Criminology for one has been reluctant to take the industry at its word when it comes to piracy losses.

“Although these estimates provide a general indication of the scale of the problem, the validity of the data is open to some debate,” the AIC wrote in its latest report on intellectual property crime in Australia.

The AIC has previously debunked claims that piracy was linked to organised crime and in a draft report leaked in 2006 said industry-provided piracy statistics were “self-serving hyperbole”.

“The AIC’s frustration was largely based on the fact that none of these groups will expose their reports to genuine peer review or analysis,” said Kimberlee Weatherall, a senior law lecturer at the University of Queensland, who specialises in copyright law and is highly critical of the industry’s piracy reports.

“When the US Government Accountability Office (GAO) looked into it at the request of US Congress, it expressed doubt about most of the industry-produced figures.”

Piracy figures derived by the entertainment industry have also been heavily criticised in the US and Europe. In some instances, the industry has admitted to grossly inflating its numbers.

Australia’s biggest pirate? Fat chance

In February last year, the anti-piracy arm of the music industry, Music Industry Piracy Investigations (MIPI), put out a thunderous press release claiming it had helped police “shut down one of Australia’s largest illegal music burning operations” in Melbourne.

Acting on information from MIPI, police seized “close to 100 CD burners and approximately 25,000 discs containing pirate music housed in a suburban CD store”.

MIPI’s general manager, Sabiene Heindl, said at the time: “This is one of the largest and most blatant illegal music burning labs that we have seen for some time.”

It was only this year that the case finally ground its way through the courts and further details were released.

Of the 25,000 “pirate” CDs that MIPI claimed it seized, 14,600 were blanks, while the remaining discs were mostly of Asian artists which the store, Lucky Bubble, had a licence to reproduce.

Less than 100 of the discs were proven to be pirated copies and the charges were dropped to the lowest possible level. The manager of the store, who claims the handful of pirated discs were placed in his shop by staff, in the end was let go with a $1500 fine.

It’s a far cry from the hundreds of thousands of dollars in penalties and years in jail that MIPI warned about in its press release.

The police have recently returned the man’s burners and almost all of the seized discs.

“This whole operation from the start has just been a monumental stuff-up by MIPI,” said barrister Doug Potter, who represented the defence in this matter but has 18 years’ experience with Victoria Police and has previously helped MIPI with its prosecutions.

“This bloke’s got a legitimate licence to be selling material and they’ve tried to characterise him as the greatest pirate in Australia. If their assessment is right they don’t have a piracy problem, it’s as simple as that.”

Mr Potter said he believed that MIPI was trying to “justify their existence” by pursuing minor pirates and raiding the occasional market stall. He said most piracy was occurring on the internet and much of this MIPI was powerless to stop.

“Everyone’s sitting on their computers anonymously pirating stuff and they’re going after someone with just 96 discs and proclaiming a great victory – the reality is that hard copies of these things are going the way of the dinosaur,” he said.

The Lucky Bubble case is reminiscent of the case of 24-year-old Queensland man James Burt, who was forced to pay $1.5 million to Nintendo in a piracy case last year for uploading a copy of a new game to the internet after he managed to buy it before the official release date.

Nintendo claimed he was a major pirate who had caused it significant losses, but Burt’s father said he was simply acting under peer pressure from his friends. As for the losses, the game, New Super Mario Bros, went on to earn $20 million in revenue in just seven weeks, making it one of the fastest-selling games of all time.

Studios still raking it in

But despite the presence of internet piracy, is the local industry actually suffering? The results are mixed.

The Australian box office set its third consecutive record in 2010, reporting revenues of $1.128 billion – a 4 per cent increase on the previous result.

Figures released by the Australian Recording Industry Association show that, between 2009 and 2010, although the quantity of music sold rose almost 10 per cent, the dollar value of these sales dropped from $446 million to $384 million.

Sales of DVDs, Blu-ray discs and other packaged media are holding strong, with 2010 revenues at $1.29 billion – just 6 per cent lower than in 2009.

Mr Cranswick believes shifting the blame for lost sales on to piracy betrays a deficit of “imagination and insight” by the entertainment industry.

There were legions of other reasons that could account for changing fortunes including technology, demography, usage patterns and price models.

The music industry appears to be the worst affected by falling revenue but there are signs it will soon turn the corner thanks to new subscription-based online music services. A recent Ovum research report estimated the digital music industry would grow by 60 per cent to $US20 billion by 2015.

Mr Jacobs points out that despite its profits continuing to grow on an overall basis, the industry for a long time has made a lot of noise about the end of days. It has continuously protested against new technologies and lobbied governments to impose restrictions.

“The marketers of entertainment should ask themselves – if a quarter of Australian internet users are engaging in unauthorised downloads as they claim, is it because Australians are a bunch of immoral criminals? Or could there be another explanation?” he asked.

“Rather than treating the impending roll-out of the NBN as an apocalypse of piracy, the industry should be embracing the technology to provide a more compelling offering to their Australian customers. Sadly, it seems that innovation is harder than putting lawyers in charge.”

Businesses in Australia are allowed to impose surcharges for credit card users to recover fees they are charged, but recent research suggests that the charges are much higher than would be needed simply to cover those costs.

Picture by Paul Schreiber

Prior to 2003, there was no such thing as a surcharge for credit card use in Australia. Credit card providers didn’t want people to feel discouraged from using cards, so any store which wanted to offer credit card facilities also had to agree not to charge customers extra for using it — even though that meant that profits on credit card sales would be lower than on cash sales. (Incidentally, that was one reason why stores could readily offer “pay less for cash” deals, since there was still some room to move if credit card provider charges weren’t an issue.)

That all changed after the Reserve Bank effectively decided that the practice of not letting retailers recover the costs associated with credit card payments was anti-competitive and bad for business overall, and legislated to ensure that credit card agreements couldn’t include a “you can’t charge surcharges for using this” clause. Not every retailer chose to take up that option, but it did become increasingly common, especially for higher-value purchases such as electronic goods and airline tickets. Sometimes the additional charge is a percentage; sometimes it’s a flat-fee (Qantas charges $7.70 on domestic airline tickets, for instance).

The theory behind that change was that businesses should only recover their own costs associated with accepting credit cards, rather than using the surcharges as a source of profit in and of themselves. But has that actually happened?

Recent analysis by financial research firm East & Partners suggests that surcharges are out of sync with what retailers are actually paying to offer a credit card service. Across Australian industry as a whole in 2010, the average surcharge imposed for credit card use is 2.55%. In the retail sector, the figure is slightly lower at 2.34%, and that number actually fell from 2.4% in 2009.

While that drop might suggest that competition ensures that fees aren’t ridiculous, they are still much higher than the actual percentage charges imposed on retailers, which East & Partners lists as 0.81% for Mastercard and Visa, which are the dominant credit card players. (American Express charges 1.92% and Diners Club 2.12%, but even that last figure is lower than 2.34%.)

The silver lining is that we’re increasingly shunning credit cards in favour of debit cards, which is a sounder financial management practice. Credit cards now account for 22% of annual revenues for merchants, while debit cards account for 40.5%. Even so, if that trend continues, don’t be surprised if the Reserve Bank decides to tweak the regulations at some point.

In practice, you won’t always be able to avoid credit charge surcharges, but it’s worth checking your options. For instance, as we discussed recently, you can pay for airline tickets on Qantas and Virgin Blue direct from your bank account.

Lifehacker’s weekly Loaded column looks at better ways to manage (and stop worrying about) your money.

[via Lifehacker]