New US Government Report On Counterfeit, Piracy

The US Government Accountability Office, an agency that works as a “congressional watchdog” investigating how taxpayer money is spent, has released a new report on intellectual property.

The report [pdf] reviews the economic effects of counterfeiting and piracy. It finds negative effects on consumers and industry – such as lost brand value and incentives to innovate – and to the US government in terms of lost tax revenue and increased enforcement expenses. There may also be health and safety or security threats, it adds. Positive effects, such as consumers seeking cheaper knock-off goods, which in turn might increase sale of legitimate goods, are also present, the report says.

Ultimately, it is difficult to quantify the effect of illicit goods because there is little data and many assumptions, for example how many purchases of illicit goods are seen to represent loss of legitimate purchases. However, the report asserts that the “studies and experts we spoke with suggested that counterfeiting and piracy is a sizeable problem.”