OECD Report On Impact Of Piracy

The Organisation for Economic Co-operation and Development (OECD) issued a study in October 2007 on the economic impact of counterfeiting and piracy worldwide. Here is a summary of its conclusions:

• Organised criminal groups are playing a major role in piracy and thrive through counterfeiting activities; they are attracted to the high profits, low risk of detection and light penalties. Intellectual property crime is also the preferred method of financing for a number of terrorist groups.



• Because of piracy right holders experience lower sales volume and prices; damaged brand value and reputation; lower royalties; less incentive to invest in new products; higher costs because of spending on efforts to combat piracy and reduction in the scope of their operation.



• The music industry is disproportionally affected by the piracy problem because its products are easy to pirate and distribute and since much of the physical piracy takes place within national markets.



• The effects of piracy on governments are: lower tax revenues, costs in anti-piracy activities and corruption.



• An analysis of 12 countries indicates that the mechanisms to fight piracy are in place, but enforcement is inadequate. *



• There is a need for stronger government action; the magnitude and effects of piracy are of such significance that they compel strong and sustained action from governments, business and consumers.



• Governments should enhance enforcement against piracy. More effective enforcement is critical.



• Governments should strengthen legal and regulatory frameworks and enhance enforcement against piracy.



• Governments should do more to raise awareness of counterfeiting and piracy issues.



• There is a need for increased cooperation between governments and industry.

Note: The analysis in the Report only covers international trade in pirate physical product. It does not cover domestically produced and consumed pirated products and pirate digital products distributed using the internet.