Topic: How to get Canadian piracy laws passed? Use old, bad data

[Amker]

Canadian law professor Michael Geist has been on a roll lately, alerting the public to the ways that Canadian industry lobbies are shaping policy related to intellectual property laws. The movie and music businesses have long demanded a "Canadian DMCA," and it now looks like a Parliamentary committee supports their ideas.

Unfortunately, as Geist points out, the committee members are relying on some bad data. This isn't your run-of-the-mill bad data, either; this is the stuff that's been left in the back of the fridge so long it's grown moldy. Let's take a closer look inside the sausage factory to see exactly how industry groups pressure legislators to support their particular agenda.

The report in question comes from the Industry Committee, and it's called (seriously) "Counterfeiting and Piracy Are Theft." It lays out a whole host of suggested rules, regulations, and penalties to address the issue, but the entire report seems premised on some shaky data.
 

Right up front, the report suggests that counterfeiting and piracy account for around five percent of all world trade. In 2007, this would mean that it's somewhere between $350 billion and $600 billion. But where did this number come from? As the report makes clear, this number was provided by industry witnesses rather than more neutral parties.

The witnesses pointed to a 1998 OECD study, which sounds good (OECD numbers are generally considered reputable) until you look a little closer. The 1998 study in question noted that "there is no substantial aggregated data to support the high percentages." In other words, this five percent figure was plucked from thin air. The committee report even notes this in a footnote, so it's unclear why they accepted this data as authoritative.

In fact, the five percent number wasn't even supplied by the OECD. It came from a 1997 study by the International Chamber of Commerce—again, hardly a disinterested party—and was eventually incorporated into the OECD report.

But why would industry witnesses supply a decade-old report? Surely there are more recent numbers available. In fact, there are. The OECD has been working for some time on a comprehensive update to the 1998 report. In January of this year, the OECD released its preliminary findings and ditched the bureaucratic language in order to express just how bad this five percent figure was.

"The overall degree to which products are being counterfeited and pirated is unknown and unknowable," said the preliminary report. "This [the five percent figure] found its way into the 1998 OECD report and ever since we've been, unfortunately, faced with this so-called 'OECD figure.' Why 'unfortunately'? The answer is quite simple. The methodology is not clear and the ICC report quite openly indicates that the estimates reflect judgments not supported by hard data."

The final report, which was recently released, says that up to $200 billion of pirated and counterfeit goods may have been moved internationally in 2005 (though the estimate did not include digital copying on the Internet). Even accounting for some rise in this figure between 2005 and 2007, it is substantially lower than the earlier estimates.

Here at Ars, we're no fans of counterfeiting or piracy, and as content producers ourselves, we know how important it is to be able to profit from one's own creative work. But new batches of restrictive laws should only be enacted based on solid data; exaggerating the impact of piracy to secure legislative action might benefit the industries in question, but it's no way for a democracy to make laws.
ars technica