Official piracy numbers are fake - at least in Canada

[DereX888]

This ought to make BIG news, but as usual the Big Business don't want it to spread...

In short:

Canadian cops have been claiming that software piracy costs the country $30 billion.
The figure has been used by countless lobby groups to get the Canadian authorities to bring in some tougher anti-piracy laws.

US Ambassador to Canada David Wilkins even quoted the figure in a March 2007 speech critical of Canadian law.

However when blogger Michael Geist asked for the sources behind the Royal Mounted Police's $30 billion claim, the letter came back from red-faced policemen confessing that they made up the figure based what they had read on the Internet.







Full story:

http://www.michaelgeist.ca/content/view/2243/135/


Misleading RCMP Data Undermines Counterfeiting Claims
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Tuesday September 18, 2007

My weekly Law Bytes column (Toronto Star version, Ottawa Citizen version, homepage version) focuses on the growing attention paid to counterfeiting and the use of misleading data as part of the debate. The RCMP has been the single most prominent source for claims about the impact of counterfeiting in Canada since its 2005 Economic Crime Report pegged the counterfeiting cost at between $10 to 30 billion dollars annually. The $30 billion figure has assumed a life of its own with groups lobbying for tougher anti-counterfeiting measures regularly raising it as evidence of the dire need for Canadian action. U.S. Ambassador to Canada David Wilkins cited the figure in a March 2007 speech critical of Canadian law, while the Canadian Anti-Counterfeiting Network, Canada's leading anti-counterfeiting lobby, reported in April that the "RCMP estimates that the cost to the Canadian economy from counterfeiting and piracy is in the billions."

Yet despite the reliance on this figure - the Industry Committee referenced it in its final report - a closer examination reveals that the RCMP data is fatally flawed. Responding to an Access to Information Act request for the sources behind the $30 billion claim, Canada's national police force last week admitted that the figures were based on "open source documents found on the Internet." In other words, the RCMP did not conduct any independent research on the scope or impact of counterfeiting in Canada, but rather merely searched for news stories on the Internet and then stood silent while lobby groups trumpeted the figure before Parliament.

A careful examination of the documents relied upon by the RCMP reveal two sources in particular that appear responsible for the $30 billion claim. First, a March 2005 CTV news story reported unsubstantiated claims by the International Anti-Counterfeiting Coalition, a global anti-counterfeiting lobby group made up predominantly of brand owners and law firms, that some of its members believe that 20 percent of the Canadian market is "pirate product." That 20 percent figure - raised without the support of any evidence whatsoever - appears to have been used by IACC to peg the cost of counterfeiting in Canada at $20 billion per year.

Second, a 2005 powerpoint presentation by Jayson Myers, then the Chief Economist for the Canadian Manufacturing and Exporters, included a single bullet point that "estimated direct losses in Canada between $20 billion and $30 billion annually." The source for this claim? According to Mr. Myers, it is simply 3 to 4 percent of the value of Canada's two-way trade.

Indeed, unsubstantiated and inflated counterfeiting numbers appear to be nothing new. The International Chamber of Commerce has long maintained that counterfeiting represents 5 to 7 percent of global trade (those figures were also raised before the Canadian House of Commons committees). However, a recent study by the independent U.S. Government Accountability Office found that of 287,000 randomly inspected shipments from 2000 to 2005, counterfeiting violations were only found in 0.06 percent - less than one tenth of one percent. Moreover, the GAO noted that despite increases in counterfeiting seizures, the value of those seizures in 2005 represented only 0.02 percent of the total value of imports of goods in product categories that are likely to involve intellectual property protection.

Similarly, this year the Organization for Economic Co-operation and Development (OECD), which counts most industrialized countries as members, issued a comprehensive report on counterfeiting that placed the global cost at $200 billion annually. That analysis, which makes suggestions that Canadian counterfeiting costs $30 billion each year even more implausible, was less than a third of what some business groups had previously claimed.

In fact, the OECD report concluded that while counterfeiting was an issue in all economies, it is most common in economies "where informal, open-air markets predominate." This suggests that far from being a hot-bed of counterfeiting, Canada is rarely the source of counterfeit products and it consumes far less than many other countries worldwide.

Before Ottawa embarks on further anti-counterfeiting legislative action, it first requires accurate, non-partisan data. Not only has such information been missing from the Canadian debate, but it is the RCMP that has astonishingly been a primary source of unreliable, unsubstantiated data. In doing so, it has undermined both its own credibility as well as that of the House of Commons committee counterfeiting reports.







I always thought that $30,000,000,000.00 figure is a bogus number simply taken straight out of the MPAA or RIAA chairman's arse, now its a proven fact
In a country with some 30+ million of people, it would take EACH and EVERY CITIZEN to steal whopping $1000 every year, and thats including every infant, every child and every old person who don't even know how to turn on a computer or have no DVDs at all
A thousand dollars every year!
Thats how they create mass-hysteria about piracy.

[zoobie]

I should open a DVD burner store in China...

[rotten apple]

Similar to the recent anti-cannabis hyperbole there - thanks to the 'influential' science free beliefs of the good ol US of A

[oldandinthe way]

For 20 years software piracy losses have been inflated.

Never has there been an estimate based on lost sales.
Never has there been an estimate based on actually using pirated software.
And the estimates of pirate copies made have been pulled out of the air.

In the early days of the PC, every machine our service department serviced had a pirate copy of Lotus 1-2-3. There weren't any spreadsheets on most of the disks, and we made a point of asking every customer with Lotus on the system whether they knew how to use it. The results were astounding. It was a totally unused piece of software, usually installed by a friend.

[Marvingj]

$30 billion can solve a lot of health care, unemployment, hunger problems in any country..

[jagabo]

$30 billion can solve a lot of health care, unemployment, hunger problems in any country..

Not $30 billion of fantasy money.

[DereX888]

$30 billion can solve a lot of health care, unemployment, hunger problems in any country..

Not $30 billion of fantasy money.

and not when it is money people did not spend (maybe because they didnt have such monies at all) on a product they could not buy (because often is not even available at all in their area, since were talking movies and music here).

Does any Hollywood company release i.e. DVDs in Afghanistan? Im not sure, but I guess they don't.
Yet for long time MPAA used to include Afghanistan with $2 billion dollars estimated yearly loses in their piracy stats LOL
A product that is not sold there (that means it officially does not exist there) cannot generate losses, can it?

I think all the piracy stats MPAA and RIAA talk about are like Saddam Hussein's WMDs - when people start checking it out, suddenly they discover it is all blown out way, way, way out of proportion, where bundle of rusty AK machine guns became WMDs in the news, and bunch of teens sharing music and porn on P2Ps grew up into a horrible worldwide piracy according to same news outlets.
If we would dig even deeper into this subject, we may find that it cost Hollywood *more* to prevent this so-called piracy than the piracy itself LOL


On a canadian side note, I wonder why their RCMP does not investigate what happens to their federal budgets every year. IIRC, Canada is one of few western countries to have budget surpluses of few billion bucks year by year every fiscal year, but if you try to find out what happened to this money - its an informational black hole, like this money never existed :O
Any Mountie reading here? Please open up an investigation

[Nilfennasion]

Canada is one of few western countries to have budget surpluses of few billion bucks year by year every fiscal year, but if you try to find out what happened to this money - its an informational black hole, like this money never existed

Australia's present government claims the exact same thing. We have a surplus of elventy billion bucks, so our country is running awesomely. Great, says someone like my mother, can I have a few thousand dollars a year to get my son PTSD counselling so he might not wake up screaming like he's being tortured every second morning? Erm, sorry, says the government, that money we said we had seems to have disappeared into our limosuines...

Robert Heinlein makes a great point in For Us, The Living that the sooner we learn to stop letting banks and governments create money out of inkwells (in other words, loaning/spending money they do not actually have), the sooner we will have real democracy. This exaggeration of what piracy does to a private enterprise that should be chasing its own losses instead of coopting public servants into doing it for them is just another great example.

[Chopmeister]

"it would take EACH and EVERY CITIZEN to steal whopping $1000 every year"

Ummm ...no. Actually, if each and every citizen copied (copying != stealing) $1,000 of content a year they wouldn't necessarily have lost a dime. For them to lose $1,000 each and every citizen would have to buy $1,000 less product than they otherwise would have, because they had copied the product instead. Even at worst, only a small fraction of product that is copied results in lost sales because of product being copied, so we would have to be assuming average copying that is a multiple of $1,000. Even this is fairly heroic - there is a plausibe argument that an impulsive MP3 download fulfils an analogous role to listening to a song on the radio for some people, and actually boosts sales because they buy the album/dvd etc.

[Nilfennasion]

Good point. I still buy far more than I otherwise would because I have a DVD-ROM and a computer with which I can rip apart chunks of footage and restructure it into something that resembles a political advert.

I think the problem's heart lies in the fact that the studios do not want Ma and Pa Average to have more control over their content than they deem Ma and Pa Average to be safe with. This little creative artist, on the other hand, would like to be able to tell them tough shit.

[DereX888]

"it would take EACH and EVERY CITIZEN to steal whopping $1000 every year"

Ummm ...no. Actually, if each and every citizen copied (copying != stealing) $1,000 of content a year they wouldn't necessarily have lost a dime. For them to lose $1,000 each and every citizen would have to buy $1,000 less product than they otherwise would have, because they had copied the product instead. Even at worst, only a small fraction of product that is copied results in lost sales because of product being copied, so we would have to be assuming average copying that is a multiple of $1,000. Even this is fairly heroic - there is a plausibe argument that an impulsive MP3 download fulfils an analogous role to listening to a song on the radio for some people, and actually boosts sales because they buy the album/dvd etc.

Yes, I know and agree with you, and every sane and brain-using person will agree with it as well.
I have only simplified to the level of MPAA/RIAA/etc ways of calculating such "losses".

BTW: S*ny (I dont want to advertise this crapmaker corporation, hence the asterisk in the name) lately even topped MPAA/RIAA cartels with their own explanations of what constitute a "piracy"
IMHO they cannot go any further than that, unless they will consider just playing a CD an act of piracy too...
(edit: and I wasnt joking, just think of it: when you buy a CD with software you are allowed to 'register it' for your own personal use on a single computer only, why then the CD with music you bought should be allowed to be played back on any player by anyone else you may want to lend it to? You cannot legally lend your Windows disc even to your wife for use on her computer, why should you be allowed to do it with music CDs?)

[valvehead]

BTW: S*ny (I dont want to advertise this crapmaker corporation, hence the asterisk in the name) lately even topped MPAA/RIAA cartels with their own explanations of what constitute a "piracy"
IMHO they cannot go any further than that, unless they will consider just playing a CD an act of piracy too...
(edit: and I wasnt joking, just think of it: when you buy a CD with software you are allowed to 'register it' for your own personal use on a single computer only, why then the CD with music you bought should be allowed to be played back on any player by anyone else you may want to lend it to? You cannot legally lend your Windows disc even to your wife for use on her computer, why should you be allowed to do it with music CDs?)

Shhhh! Don't give them any ideas. They just might try to do that!

Here's that diatribe you mentioned: http://arstechnica.com/news.ars/post/20071002-sony-bmgs-chief-anti-piracy-lawyer-copyi...-stealing.html