report updates a ground breaking 2008 report by the Organization for Economic
Cooperation and Development (OECD) that showed more than US$250 billion in
counterfeit and pirated goods move through international trade alone. The
revealing ICC study not only brings the estimates up to date but also examines
additional impacts not quantified in the OECD report. These include the value
of domestically produced and consumed counterfeit products, the value of
digital piracy, and the negative impacts on society, governments and
"By filling in the gaps left by the OECD, we have
been able to paint a more comprehensive picture of the negative economic and
social impacts of counterfeiting and piracy," said Jeffrey Hardy, Coordinator
of the ICC Business Action to Stop Counterfeiting and Piracy (BASCAP)
initiative. "This additional data is important because it provides
policymakers with better information on how counterfeiting and piracy
undermine innovation, economic growth and employment. It better equips them to
make the fight against IP theft a higher public policy priority and take the
actions needed to stop counterfeiting and piracy."
reveals that based on 2008 data, the total global economic and social impacts
of counterfeit and pirated products are as much as US$775 billion every year.
This includes impacts of lost tax revenue and higher government spending on
law enforcement and health care. The figure is estimated to more than double
to US$1.7 trillion by 2015, due in part to rapid increases in physical
counterfeiting and piracy as measured by reported customs seizuresand greater
worldwide access to high speed Internet and mobile technologies.
The report shows that international trade in fakes currently accounts for
more than half of counterfeiting and piracy, and could grow to as much as
US$960 billion by 2015. Domestic production and consumption will account for
between US$370 billion and US$570 billion, and digitally pirated music, movies
and software for as much as US$240 billion in 2015.
shows that in an interconnected economy, consumers and governments suffer
alongside legitimate businesses from the trade in counterfeits," said Damien
O'Flaherty, Senior Associate at Frontier Economics, the internationally
recognized consulting firm that produced the report. "Our objective is to as
accurately as possible characterize the magnitude and growth of this illegal
underground economy and its impacts on governments and consumers."
unchecked growth of counterfeiting and piracy already has created an enormous
drain on the global economy," Mr Hardy said. "This illegal business activity
deprives governments of revenues for vital public services, forces higher
burdens on tax payers, dislocates hundreds of thousands of legitimate jobs and
exposes consumers to dangerous and ineffective products."
report notes that counterfeiters and pirates operate outside the law, which
makes estimating the extent of counterfeiting and piracy and the harm these
activities cause extremely challenging. Illegal businesses do not report
information on their activities to any government agency so measuring their
size must be done using indirect methods.
"No one report or approach
will yield a complete picture or provide all the answers but we've attempted
to examine the measurement of this illegal activity in a more comprehensive
way than has been done to date, and to develop methodologies that others can
now use for more completely and accurately estimating the economic and social
impacts of counterfeiting and piracy," Mr O'Flaherty said.
Hardy added: "BASCAP is committed to learning from as many sources of
expertise as possible because we believe that reliable information on the
scope and impacts of counterfeiting and piracy is critical for helping
policymakers better understand that the trade in fake goods is damaging their
economies, threatening the health and safety of their citizens and stifling
innovation and creativity."
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