Numbers Cited By SOPA Supporters May Be Fictitious

Ignoring, momentarily, that the U.S. has already adopted international law which seeks to curtail online piracy (see, e.g., DMCA), and that these new bills seek to do little more than enact what amounts to police powers over foreign companies, it looks like the studies cited in support of piracy-gone-rampant may have never have existed. Julian Sanchez, a researcher at the Cato Institute, did his level best at tracking down the research behind the near-absurd numbers (the industry claims nearly $250B lost in revenues a year, and 750,000 lost jobs), but instead found only circular references.

So then, you may be asking yourself: how much does piracy actually cost the entertainment industry? $89MM. What’s the U.S. Taxpayer cost to enact new legislation (SOPA)? $47MM, by Sanchez’s estimates. That’s 52.8 cents of U.S. Taxpayer money spent for every dollar in private enterprise saved, if the system works (which it won’t), when there already likely exists a private remedy (private action in the host country).

From the GAO:

“First, a number of industry, media, and government publications have cited an FBI estimate that U.S. businesses lose $200-$250 billion to counterfeiting on an annual basis. This estimate was contained in a 2002 FBI press release, 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.

Second, a 2002 CBP press release contained an estimate that U.S. businesses and industries lose $200 billion a year in revenue and 750,000 jobs due to counterfeits of merchandise. However, a CBP official stated that these figures are of uncertain origin, have been discredited, and are no longer used by CBP. A March 2009 CBP internal memo was circulated to inform staff not to use the figures. However, another entity within DHS continues to use them.”

See Kevin Fogerty’s piece at IT World for more.