Anyone caught breaching copyright by downloading films and music from the internet will face large penalties and could even be disconnected by their internet service under new legislation.
A three-strikes system will hand out formal warnings to offenders, and further illegal downloads could prompt copyright owners to apply for up to $15,000 compensation from the user.
The copyright owner could also ask the relevant internet service provider to cut off the customer's internet connection for up to six months.
The ban could happen only after a copyright owner, such as a media company, applies for a district court order for the internet service provider to suspend the user's internet access.
The Copyright (Infringing File Sharing) Amendment Bill was introduced to Parliament this week and is a replacement for last year's controversial proposals that would have banned downloaders from ever having an internet connection.
The former bill also included no process that allowed internet users to rebut a copyright owner's allegations.
Under the new law, however, internet users who feel they have been wrongly penalised will be able to take their case to the Copyright Tribunal, for free.
Bloggers say that even though the new bill is an improvement on the old one, it still shouldn't be passed.
Creative Freedom NZ director Bronwyn Holloway-Smith said internet termination was "quite extreme". A fine would be an adequate punishment. "The internet has become a core, vital service - you wouldn't terminate someone's right to post a letter. There's a three-strikes system, but there's a tribunal in place to judge cases. We've yet to see what scale they will be basing their fines on. We want something proportionate."
The focus of protest was Section 92a of Labour's law, which would have put the onus on ISPs to disconnect copyright infringers.
Ms Holloway-Smith said one flaw in the new bill was that anyone disconnected from one internet service would be free to sign up with another.
Justice Minister Simon Power stressed that the bill's main purpose is to protect copyright owners from being ripped off by people continuously downloading and sharing files.
"Online copyright infringement is a problem for everyone, but especially for the creative industry, which has experienced significant declines in revenue as file-sharing has become more prevalent," he said.
"This bill is the result of extensive consultation with stakeholders and is an important step in addressing a complex issue."
The bill's explanatory notes say ongoing issues with people downloading movies, music and other software - and then distributing them to other internet users - were having a "negative and cumulative effect on New Zealand's music, film and software industries".
The bill is intended to deter people from illegally downloading and sharing files, as well as educating them about the consequences of doing so.
BIG BROTHER IS WATCHING...
The new copyright law would require internet service providers (ISPs) to keep information about account holders' use of the internet for at least 40 days.
Account holders found to have persistently breached copyright rules face having their internet connections cut off by their ISP if instructed to do so by the district court.
ISPs must also keep for at least 12 months any information about infringements sent by copyright owners and copies of infringement notices issued to an account holder.
ISPs may not release the name or contact details of an account holder to a copyright owner unless the account holder gives permission or the ISP is required to by the Copyright Tribunal or a court.