Report Identifies Dangers to Internet Users from Malvertising and Piracy

On September 15, the Digital Citizens Alliance released a report titled "Unholy Triangle: From Piracy to Ads to Ransomware: How Illicit Actors Use Digital Ads on Piracy Sites to Profit by Harming Internet Users." The report, which the Digital Citizens Alliance prepared jointly with White Bullet and Unit 221B, spotlights the phenomena of online pirates working with "malvertisers" and with the effective assistance of online ad intermediaries to exploit Internet users. 

As the report explains, operators of piracy websites lure Internet users by offering them access to "free" content – including copyrighted movies, TV shows, music sound recordings, and ebooks. But many piracy sites feature a barrage of malicious ads intended to confuse, deceive, or scare Internet users into clicking them. The clicked ads then infect Internet users' computers with malware that can steal their financial and personal information as well as with spyware that can track all of their online activities. The report identifies the creators of these harmful ads as "malvertisers" and it calls their tactics "malvertising."

One particularly pernicious malware-related activity is known as "ransomware." In a ransomware attack, an Internet user's computer files are encrypted and the user is locked out. Cybercriminals then demand payment from the Internet user in order to unlock the files. A source cited by the report estimated that global losses due to ransomware totaled $20 billion in 2021.

 

The report authors investigated many online piracy sites and found ransomware and other malware schemes in operation. According to the report, in just a one-month period, visitors to piracy sites were barraged with an estimated 321 million ads designed to harm them. Indeed, the report found that malvertising accounts for 12% of total ads on piracy sites and generates an estimated minimum of $121 million annually, with more than $68 million coming from U.S. Internet user visits to such sites. 

 

Significantly, these piracy website-hosted malvertising schemes would not be operating without ad intermediaries. In their investigation, the report's authors found that some foreign owned and operated ad intermediaries were willing to place deceptive ads and thereby effectively facilitate malvertising campaigns. The report found that the ad industry has made progress in reducing ads for legitimate companies on piracy sites, and it credits the creation of the Trustworthy Accountability Group (TAG) by U.S. ad associations for helping bring about those reductions. 

 

Copyright piracy is wrong in itself and commercial traffickers in infringing content ought to be the target of federal law enforcement efforts. Free State Foundation President Randolph May and I have written about the harms from online piracy – including the role of online ads in facilitating piracy – which undermines copyright owners' ability to seek financial returns and devalues their intellectual property. But the harms of online piracy don't end there. The "Unholy Triangle" report rightly calls attention to the dangers to unsuspecting Internet users from malware on piracy websites that host infringing content. More Internet users should become aware of those dangers. Hopefully, further efforts will be made by responsible U.S. ad associations and by others to curb the high volumes of malicious ads and the illicit revenue streams that they generate.