While software and music companies say they're losing millions of dollars, many people don't know when they're breaking the law.


DIANNE BAIN (REPORTER): It's hard to believe the leafy suburb of Mount Pleasant could house the headquarters of an alleged international pirate. But the FBI claims a multimillion-dollar Internet conspiracy was headed by Mount Pleasant resident Sean O'Toole. The 26-year-old computer technician isn't talking about the charges. But the assistant district attorney from Chicago is.

PRAVIN RAO (Assistant District Attorney): We value intellectual property just like any other property and where it's stolen at least our office can only really pursue those cases where we can.

DIANNE BAIN (REPORTER): 15 of the so-called pirates have already pleaded not guilty to the charges in a Chicago court. Sean O'Toole will have his day in court in the next fortnight. Between now and then thousands of Australians will illegally download millions of dollars worth of movies, music and software, not realising they too could become a name on the FBI's wanted list.

NICK SPADACCINI (UWA COMPUTER SCIENTIST): No one knows who you are at the other end. You feel that it's just easy to do. It doesn't feel as illegal as if you went into a shop and stole a CD of music.

DIANNE BAIN (REPORTER): The recent crackdown has set off alarm bells in Internet circles around the nation. In Perth, UWA's computer science experts believe Mr O'Toole is being held up as an example to the downloading community.
There's no doubt piracy is taking it's toll on the global entertainment industry, movie and music sales are down.

STEPHEN PEACH (ARIA): We found in our survey for example that less than 50 percent of those under 25 realised even aware that stealing music off the internet was in fact theft. You're still walking into the CD store and stealing CD's.

DIANNE BAIN (REPORTER): And software companies are reeling at what they claim are hundred million dollar losses.
The Internet has always attracted a large cult-like following of computer hackers. All over the world, on a daily basis, they're cracking software security codes and distributing games, music, movies and much more. And while it may be hurting software giants their intent is not always malicious, it's often about ego.

GORDAN ROYLE (UWA COMPUTER SCIENTIST): Most of these people are not primarily interested in I think in making money out of it but more to become top dog prime cracker.

Everyone who uses an I-pod or MP3 player, unless they're legally buying the songs or making their own music, they're actually breaking the law. Every time they burn a CD onto the computer or every time they rip a CD from the computer they're actually breaking the law.

DIANNE BAIN (REPORTER): So instead of getting even the music industry is learning to adapt, selling mobile phone tones, and music single sales using websites like I-Tunes where you can download a song for just 99 cents. Computer experts say this approach is the way of the future. Instead of fighting the hackers, make music and movies so cheap you wouldn't bother downloading illegally.

NICK SPADACCINI (UWA COMPUTER SCIENTIST):I think once people are confronted with a reasonable cost for downloading they will just automatically accept it.