Does Online Piracy Make Computers Insecure? Evidence from Panel Data

Abstract

Using a panel data of more than 250 users for over a year, we examine the relation between user visits to content infringing sites and the number of malware found on their machines. A key aspect of our data is that the users are observed in the real world, at their homes, and the data is captured unobtrusively via background sensors. Thus the data provides an unbiased insight into how users navigate infringing sites and how it affects the health of their computers. We are able to classify user activities into various categories including visits to infringing sites. We then estimate a within-user model and find that when users spend more time on infringing sites in a given month, they are also more likely to download malware files on their machines in the same time period. In particular, we estimate that doubling the time spent on infringing sites leads to 20 percent increase in total malware files and 20 percent increase in malware files after removing potential adware. We also find no evidence that users who visit infringing sites more take more precautions. In particular, users visiting infringing sites are less (not more) likely to install an antivirus (AV) software.