A major setback for those that claim piracy is having an adverse affect on the US economy: the US Government Accountability Office, who was tasked with reviewing the efforts to find out what, if any, impact piracy has on the US economy, has concluded that all of these studies – all of them – are bogus. Better yet – the GAO even goes as far as to say that piracy may have a positive effect on the economy.
Over the course of the years, we’ve been subjected to numerous doom and gloom studies from organisations like the MPAA, RIAA, and BSA, which contained figures supposedly coming from government sources. These reports would get widespread coverage in the media and would influence government policy regarding IP enforcement to a rather great degree.
Consequently, US Congress decided back in April 2009 to task the Government Accountability Office with investigating these reports to assess their validity. Released Monday, the report tears all of these reports to shreds, and I’m not overstating things here; the validity of each and every one of these reports is highly questionable, according to the GAO.
Of the three most often-cited studies, the GAO states that they “cannot be substantiated due to the absence of underlying studies. Each method (of measuring) has limitations, and most experts observed that it is difficult, if not impossible, to quantify the economy-wide impacts.” They state that the oft-made assumption that each pirated product constitutes a lost sale is just an “assumption”. Some figures used in the reports were attributed to the FBI, to which the FBI replied they have no records of said figures. Loosely translated: big content made them up.
Furthermore, the GAO even concludes that piracy may have a positive effect on the economy, for instance because it leaves consumers with more money to spend elsewhere. On top of that – and I personally believe this is a far more important aspect that gets deliberately neglected by the content industry – people may use illegal downloading to sample content. In other words, without such sampling, they would be buying less media, not more.
“Some experts we interviewed and literature we reviewed identified potential positive economic effects of counterfeiting and piracy. Some consumers may knowingly purchase a counterfeit or pirated product because it is less expensive than the genuine good or because the genuine good is unavailable, and they may experience positive effects from such purchases,” the GAO concludes, “Consumers may use pirated goods to ‘sample’ music, movies, software, or electronic games before purchasing legitimate copies. [This] may lead to increased sales of legitimate goods.”
Still, this doesn’t mean piracy is not a problem – the GAO report calls it “sizeable” – it just means we haven’t been able yet to really gauge its impact, contrary to what big content wants you (and your government) to believe.
This report will most likely quickly disappear out of view due to President Obama’s close ties to big content and his support for ACTA. It seems that this is a battle the EU parliament will have to fight for the world, since individual member states in the EU certainly won’t be doing anything (Hi France! Hi UK!), and I have little hope for Obama to step away from all that juicy MPAA/RIAA campaign money.