Illegal file sharing by millions of people in the UK is inflicting huge economic losses, according to a report published today.
Almost seven million Britons have illegally downloaded films, music and software, many on a regular basis, researchers said.
Based on one file sharing network, researchers said its 1.3 million users could easily consume £12bn worth of copyright content in a year.
This will only increase, the researchers said, as next-generation broadband connections enable users to download films in just three minutes at 50mbps.
The Strategic Advisory Board for Intellectual Property (SABIP), which commissioned the research, said widespread confusion about copyright law was exacerbating the problem.
Intellectual property minister David Lammy said the copyright industries in the UK are suffering huge losses, and the report helps put the scale of the problem in context.
But he said the problem was not confined to the UK so other EU states will find the report of use in the development of policy.
Dame Lynne Brindley, SABIP board member, said the report provides evidence to help develop a clear research strategy to support policy development in this area.
Based on the research, the SABIP has identified several key issues to research, such as whether people's behaviour would change if they knew they were not anonymous online.