Movie, Music Piracy Claims Overstated, Gov't Report Says

Dennis Faas's picture

A year-long study by the U.S. Government Accountability Office (GAO) reveals that claims by Hollywood and the music recording industry about the devastating effect of piracy have been overblown.

The GAO, the audit and investigative arm of Congress, was asked by lawmakers to conduct the study in 2008 because they were trying to find ways to strengthen efforts to protect intellectual property. The GAO studied digital music, movies, and software. (Source:

The GAO spent a year studying how piracy and illegal counterfeiting affects the United States, but still can't make any positive conclusions as to the effects of counterfeiting and piracy on consumers, industries, government, and the U.S. economy.

Impacts of Piracy: Difficult to Quantify

In its 41-page report, the Government Accountability Office wrote "Three widely cited U.S. government estimates of economic losses resulting from counterfeiting 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." (Source:

Claims that 750,000 jobs and up to $250 billion a year being lost in the U.S. economy due to intellectual property infringement have been found to be grossly -- if not intentionally -- overstated. (Source:

Three commonly cited reports -- all bogus, although one is still being used officially -- could not be substantiated or traced back to an underlying data source or methodology to support claims that piracy was destructive to Hollywood or the recording industry.

Reports from the Business Software Alliance and the Motion Picture Association of America (MPAA) were also found to have been highly speculative and overstated.

The GAO found evidence suggesting piracy was large and harmful, but could not substantiate claims that piracy and counterfeiting cost billions every year.

Piracy Problem Sizable, but Overstated

Part of the reason for conducting the study included wanting to learn about attempts to quantify piracy. In the past year, the Government Accountability Office found that most of the information and views on the subject focused on the negative effects of piracy.

That's not to say that piracy and counterfeiting aren't very real problems. According to the GAO, the problem is 'sizable,' but a lot of bad data has been used to produce these overestimated studies.

Actual dollar figures and job loss numbers, as noted by Ars Technica, should be handled with extreme care and a good bit of skepticism. Numerous experts told the GAO that positive effects from piracy on the economy should be assessed as well. (Source:

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