Jesse Brown: The Bogus Cost of Piracy


$250 billion and 750,000.

Those two daunting numbers will be familiar to anyone who has been following the corporate and governmental push for stricter Intellectual Property legislation. The first - $250 billion - is the figure commonly cited as the amount of money lost to I.P. piracy annually. The second is the total number of jobs lost. These figures have been used by the U.S. Department of Commerce, Customs and Border Patrol, the U.S. Chamber of Commerce, the FBI, the International Anti-Counterfeiting Coalition, The International Trademark Coalition, and countless media reports. The numbers are big, daunting, and useful to anyone trying to prove that piracy must be stopped.

But the numbers are bogus.

A recent investigation by Ars Technica reveals that the citation of these figures has become a 20 year game of broken telephone. The $250 billion figure, often attributed to the FBI, actually seems to have originated in a 1993 issue of Forbes magazine. It was an estimate given with no research behind it, and nevertheless was an attempt to calculate the size of the total counterfeiting market (merchandise, etc.) - not the annual I.P. theft market or the digital side of it.

And the supposed 750,000 jobs lost to piracy?

Well, no-one seems to have any idea where that staggering figure comes from. Nevertheless, it's still used frequently - most recently by the U.S. Chamber of Commerce in their attempts to persuade George W Bush to create a cabinet-level copyright czar.