When I posted a note about “Copyrights and Wrongs” a couple of days ago, I mentioned that I thought that many of the claims made about economic losses due to copyright infringement were somewhat questionable. According to a recent article at Ars Technica, the GAO apparently agrees with me. In a report [PDF] released a few days ago, the GAO took a look at several widely reported estimates of the impact of copyright “piracy”, and was not impressed:
In a new report out yesterday, the government’s own internal watchdog took a close look at “efforts to quantify the economic effects of counterfeit and pirated goods.” After examining all the data and consulting with numerous experts inside and outside of government, the Government Accountability Office concluded that it is “difficult, if not impossible, to quantify the economy-wide impacts.”
The GAO also found that three widely-cited studies, allegedly from government sources, could not be substantiated at all:
Three commonly cited estimates of U.S. industry losses due to counterfeiting have been sourced to U.S. agencies, but cannot be substantiated or traced back to an underlying data source or methodology.
One of the reports, cited in an FBI press release in 2002, gave an estimated annual loss to US businesses of $200-500 billion, “but FBI officials told us that it has no record of source data or methodology for generating the estimate and that it cannot be corroborated.” Maybe they forgot to look in that cupboard where J. Edgar Hoover kept his frocks.
The GAO reviewed other studies, carried out by industry groups, and wasn’t too impressed by any of them. For example, the GAO pointed out (correctly) that studies estimating harm to the sellers of copyrighted content assumed that there was no offsetting benefit to the infringers. This is a hard assumption to swallow if there is anywhere near as much infringement as the industry claims.
These results are somewhat ironic, since a prime motivation for the GAO report was the PRO-IP Act, passed in 2008 with strong support from industry groups like the RIAA and the MPAA, which (among other things) established a process for the government to collect and analyze infringement data.