New Study Provides Further Details on the Impact of Piracy

Adding to several recent reports that are shedding light on the cost of piracy is today’s release by the International Chamber of Commerce (ICC) predicting that by 2015, the annual global economic impact of piracy and counterfeiting will reach $1.7 trillion and put 2.5 million jobs at risk each year.

The report adds further detail to a study previously released by the Organization for Economic Cooperation and Development (OECD), and comes on the heels of a report issued earlier this week by Envisional estimating that nearly 25 percent of internet traffic is due to the illegal sharing of copyrighted works.

According to today’s report, the total global economic and social impact of counterfeiting and piracy is $775 billion every year. The estimate used data from 2008 and includes impact of lost tax revenue and higher government spending on law enforcement and health care in arriving at the figure. It predicts that these costs will grow over the next several years and reach $1.7 trillion by 2015. ICC points to “rapid increases in reported counterfeiting and piracy seizures, and greater worldwide access to high speed internet and mobile technologies” as reasons the estimate will more than double during the next several years.

The research is a project of the ICC’s Business Action to Stop Counterfeiting and Piracy (BASCAP), and was released at the 6th Global Congress on Combating Counterfeiting and Piracy.

BASCAP Coordinator Jeffrey Hardy said in a statement, “The unchecked growth of counterfeiting and piracy has already created an enormous drain on the global economy. [It] deprives governments of revenues for vital public services, forces high burdens on tax payers, dislocates hundreds of thousands of legitimate jobs and exposes consumers to dangerous and ineffective products.”

Taken together, these reports make clear that digital piracy is not just a scourge on artists and other content creators. It affects all legitimate businesses, and undermines the economic health of communities large and small, online and in the brick and mortar world. Consumers lose when bandwidth is eaten up by illegitimate activity. Businesses lose when illegal activity erodes the lawful marketplace. Economies lose when tax revenue and profits go underground, enriching individuals acting outside legal parameters. Workers lose when hours are reduced and jobs are lost entirely because the black market is allowed to operate unchecked.

These statistics, while sobering, can perhaps motivate businesses, governments and consumers alike to take the internet back from illicit operators.