More of Less then contacted one of the authors of the paper, Mark Mulligan, and figured out that the 7 million figure actually came from a report he had written for a subsidiary of Forrester called Jupiter Research. The peculiar thing about this particular paper is who it was commissioned by - the British Phonographic Industry (BPI), a trade group representing music firms in the UK.
Putting aside the extremely convenient mix-up with the cited source for the figures, how the number was reached is even more peculiar. A 2008 survey of 1,176 Internet-equipped households found 11.6 percent (136) of respondents admitting to use of file sharing software. The 11.6 percent was then adjusted to 16.3 percent to include people who wouldn't admit to the practice.
Mulligan did defend this assumption however, saying it wasn't pulled out of thin air, but was based on some evidence. However, the research makes another assumption that there were 40 million people online in the UK during 2008. The Office of National Statistics itself contradicts this figure, estimating that in 2008, 33.9 million people were online in the UK.
The research concluded that there was around 6.7 million file sharers in the UK - which was rounded up to 7 million. If you throw away the assumptions in the report, the figure falls to 3.9 million. Of course, the accuracy of even that number is questionable, but the difference is that an inflated number was fed to the UK government, with much of the research stemming from a BPI-commissioned study.