More than a third of the 1500 registered Internet cafes in Beijing have been or will soon be indicted on suspicion of piracy, according to local media reports. The move, initiated by the government, could lead to fines as high as $3 million.
Copyright infringement is much more widespread than simply in Internet cafes. Guilty parties include hotels offering video-on-demand, karaoke bars, schools, and libraries. Video content piracy in China reportedly costs as high as $1.4 billion.
The State Copyright Bureau has adopted a zero-tolerance stance on piracy, but it often lacks the resources to punish violators. On top of the 600 Internet cafes being prosecuted in Beijing, there are a further 30,000 suspected businesses nationwide.
The National League of Internet Cafes said copyright infringement offline by Internet cafes is more of an issue than copyright infringement online. Out of more than 130,000 registered cafes in China, roughly 80,000 of them have never bought any video distribution systems, indicating there are varying degrees of infringement.
Statistics show that in about 150,000 Internet cafes across the country, around 30% of customers watch movies. Recently, the controversial Chinese Movie Copyright Association announced plans to begin formally charging Internet cafes for customers viewing movies. It plans to charge a cafe with 200 machines up to $1,622 a year -- a relatively high sum for low-margin cafes.
These latest measures come shortly after Microsoft began proceedings against an Internet cafe in Dongguan, in China's southeastern Guangdong Province, for using pirated copies of Windows on more than 5,000 computers.
In an attempt to settle out of court, Microsoft asked the Dongguan Internet Service Association to convince Internet cafes to sign up for standard purchase terms on Microsoft products. However, the cafe owners are resisting, saying the royalty payments would put about a quarter of them out of business.