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Trade Panel Witness Questions Global Piracy Estimates

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Default Trade Panel Witness Questions Global Piracy Estimates

Trade Panel Witness Questions Global Piracy Estimates

Posted: 18 Jun 2010 01:12 PM PDT
Questions whether or not those willing to pay a few dollars for a pirated product would otherwise be willing to pay 6 or 10 times that amount for the real thing, and points out that copyright holders want to make losses appear as dramatic as possible to spur govt officials into action.

The U.S. International Trade Commission (USITC) is amidst a two-part investigation to determine the effects of copyright infringement in China on the U.S. economy. As part of the investigation it held a public hearing the other day to solicit testimony from experts on the matter, and several questioned the piracy estimates that copyright holders routinely roll out.

“It seems a bit crazy to me to assume that someone who would pay some low amount for a pirated product would be the type of customer who’d pay some amount that’s six or 10 that amount for a real one,” said Fritz Foley, a professor from Harvard University business school. “Be careful about using information the multinational [companies] provide you. I would imagine they have an incentive to make the losses seem very, very large.”

And he’s right. He notes, as have many critics of the entertainment industry, that copyright holders always assume that one pirated copy would have otherwise been a legitimate purchase if piracy did not otherwise exist. It’s simply false to think that would be the case.

Another witness also suggested that the US economy may actually benefit from copyright infringement in other ways. Although the movie industry may be hurt by pirated versions of its films for example, companies that that sell raw materials to counterfeiters may provide jobs for US workers. The pirated material may also help spread US democratic values and ideals.

On the other side of the spectrum were copyright holder groups like the Business Software Alliance, an organization that definitely goes to great lengths to make piracy losses as large as possible. In fact, just last month it claimed in its Seventh Annual Global Software Piracy Study that $51 billion worth of software was pirated around the globe last year. The BSA blames the problem on expanding sales into emerging markets (i.e. poor countries). In fact, the countries with the highest rates of piracy are countries like Georgia, Zimbabwe, and Bangladesh, while the countries with least amount of piracy are countries like the US, Japan, and Luxembourg. Is it really surprising that poor people can’t afford high-priced legal products?

The BSA estimates that 79% of PC software installed in China in 2009 was pirated, and that it had a commercial value of $7.6 billion, double the value of software stolen in China just four years ago.

Stay tuned.
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