This is largely a symbolic gesture although very unfortunate for those two. Truth is yes, they just jailed the 2 founders of the pirate bay, but that won't stop the millions of torrenters around the globe, the economic costs of jailing and punishing torrenters would be astronomical. This is also why I don't call myself a capitalist anymore, because the state and the capital holders are actively 69ing themselves. Capital holders receive protection and authority from the state, the state receives wealth and economic influence.
What you are describing is called crony capitalism. It's made to look like capitalism, but the inner workings are all that of the corrupt oligarchs that have ruled mankind since day 1. True capitalism does not have the state protect bad business models - those fail under their own accord. In this case the entertainment industry is able to bypass free markets and gain the political favor of governments by contributing greatly to their general election funds.
