$900 Million Piracy Ring Busted

News reports today are telling the story of how Microsoft helped bring down a $900 million global software piracy ring. But the damage from these software pirates is only a mere fraction of the overall costs caused by copyright piracy to the U.S. economy each year.

According to a report released last fall by the Institute for Policy Innovation (IPI), global theft of copyright-protected products, including business and entertainment software, motion pictures, video games and sound recordings has cost the U.S. a staggering $58 billion in economic output and 373,375 jobs annually.

The report, "The True Cost of Copyright Industry Piracy to the U.S. Economy," sheds light on the injuries from copyright piracy to the national economy as a whole, not just to U.S. copyright producers and industries.

Because of global and U.S.-based piracy of copyrighted material, every year:

-- The U.S. economy loses $58 billion;

-- U.S. workers lose 373,375 jobs;

-- U.S. workers lose $16.3 billion in earnings, including $7.2 billion in earnings from workers in the sound recording industry or "downstream" retail industries, and $9.1 billion in earnings by workers in other U.S. industries; and

-- The U.S. government loses at least $2.6 billion in tax revenues, including $1.8 billion in personal income tax and $800 million in lost corporate income and production taxes.

"Piracy harms not only the owners of intellectual property but also U.S. consumers, workers and taxpayers," says Stephen E. Siwek, author of the report and principal with Economists, Inc. "It is clear that the problem of copyright piracy should be afforded a prominent place on the policy agenda in coming years."

It is imperative that policy makers realize the threat of piracy and recognize that intellectual property products, such as copyright-protected materials, are the most important growth drivers in the U.S. economy, responsible for nearly 40% of economic growth and nearly 60% of growth in U.S. exports.

The study is the third and final in a series of intellectual property papers examining the overall economic impact of copyright piracy.

For report copies, visit http://www.ipi.org/