US research deems piracy 'impossible to measure'

A report by the US Government Accountability Office could have implications for the Digital Economy Act

The economic impact of digital piracy is impossible to quantify, according to research conducted by the US Government Accountability Office (GAO) which casts new doubts over the motivation behind the Digital Economy Act.

The GAO revealed its findings yesterday, claiming that conflicting methods of estimation made it too difficult to measure the economic impact of counterfeit and pirated goods.

The main issue affecting an accurate assessment is detailing the number of different pirated goods. Each industry supplies its own methodology for calculating the impact of piracy, and the GAO concluded that each was fundamentally flawed.

"Because of the significant differences in types of counterfeited and pirated goods and industries involved, no single method can be used to develop estimates," the report said.

"Each method has limitations, and most experts observed that it is difficult, if not impossible, to quantify the economy-wide impacts."

If the report is endorsed by industry analysts in the UK, it could have implications for the Digital Economy Act, which became law on 9 April amid widespread condemnation.

Anti-piracy provisions in the legislation rely on information supplied by the BPI trade body, which has long maintained that piracy is destroying its businesses. But the data it uses could be based on a flawed methodology.

Digital Britain minister Stephen Timms argued on Sky News programme Technology Unplugged last month that piracy is costing the UK economy £400m a year.

The GOA report even suggests that piracy has a beneficial effect in certain circumstances, in that consumers can have a positive experience with a counterfeit product and go on to buy a genuine version.