Pirate Bay's Peter Sunde chats with Per Sundin, CEO of the Swedish subsidiary of Universal Music, in the courtroom hallway after trial adjourned for the day Wednesday.

*Photo: Oscar Swartz.*Special correspondent Oscar Swartz reports.

STOCKHOLM – Laughter filled The Pirate Bay trial here Wednesday when John Kennedy, the chief executive of the International Federation of Phonographic Industries, testified that people would have purchased every music track they got free file sharing.

Kennedy answered an affirmative "Yes" to Pirate Bay defense attorneys when asked whether that was true. Bursting laughter could be heard from the audio room beside the courtroom where the trial's sound was being broadcast.

The sleek executive, flown from London, was clad in a grayish-blue tailored suit and sported a helmet of stiff, reddish blown-dried hair. Or maybe it was a wig.

He explained that the IFPI is the industry organization of the record companies responsible for coordinating anti-piracy activities around the world and lobbying governments to pass laws making it easier to ding infringers.

When unauthorized copyright material is made available on The Pirate Bay, he said, sales of legitimate music slumps.

"If you lost 1,000 sales in week one, your recording, instead of going into the charts at

number five, would go in at number 20. If you aimed at number 10 – which

is good for a new artist – you could fall to number 75 and if you had

aimed at number 20 you may not make the chart at all," he testified.

The day's testimony – which also came from Ludvig Werner, CEO of IFPI's Swedish section and Per Sundin, CEO of the Swedish subsidiary of Universal Music -– amounted to accounts of The Pirate Bay ruining Hollywood.

All the while, lawyers for the four Pirate Bay co-founders drove home the point that the lobbying groups do not go after the millions of people who use The Pirate Bay tracker to search for pirated works online.

Pirate Bay co-founders Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde and Carl Lundström face up to two years in prison each, in addition to fines as high as $180,000.

They are accused of facilitating copyright infringement under Swedish law by running a BitTorrent tracker that has 22 million users and points the way to where chunks of files of copyright works can be accumulated and automatically assembled into full copies of copyright material.

Sundin concluded the day's testimony and perhaps was the most aggressive witness. He testified Pirate Bay was the root of the industry's financial woes.

After the hearing, Sunde was seen chatting with Sundin about a lunch date.

Testimony resumes Thursday. Threat Level is providing gavel-to-gavel coverage.

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