How much counterfeiting? How much piracy?
No one really knows how much counterfeiting or piracy actually occurs.
The U.S. General Accountability Office, the serious and non-partisan investigative arm of the Congress, released a report this month, Observations on Efforts to Quantify the Economic Effects of Counterfeit and Pirated Goods. Among the report’s findings:
- the economy-wide impact of counterfeiting and piracy is unknown;
- despite significant efforts, it is difficult, if not impossible, to quantify the net effect of counterfeiting and piracy on the economy as a whole;
- three commonly cited estimates of U.S. industry losses due to counterfeiting cannot be substantiated, in other words are based on nothing;
- there is no evidence to support a “rule of thumb” that measures counterfeit trade as a proportion of world trade, such as a widely cited 5 to 7% of world trade, attributed to the International Chamber of Commerce.
The U.S. GAO report is clearly drafted and offers readers a multiple-page bibliography.
It isn’t the first report to point out that data on the impact of counterfeiting and piracy don’t exist.
In 2008, the OECD published a report, The Economic Impact of Counterfeiting and Piracy, which found that impact assessments “rely exclusively on fragmentary and anecdotal information; where data are lacking, unsubstantiated opinions are often treated as facts.”
I’ve written and taught about intellectual property. I wouldn’t want to understate its importance. But I’m wary of empirical arguments used to justify public policies, such as the misguided “Hadopi” law in France, where I live. Where counterfeiting –goods that bear an unauthorized mark– or piracy –copies made without a right holder’s consent– are concerned, the data simply do not exist that would show a net economic effect.