It’s getting really frustrating watching the supposedly professional press repeat stats that have been thoroughly debunked as if they’re factual, so I reckon it’s about age that human beings started calling outside the publications and reporters who constitute these mistakes directly. So, Stephanie Clifford, reporter for the NY Times, can you give <i>any evidence</i> whatsoever to support the claim that you made in your article this past weekend that <a href=”http://www.nytimes.com/2010/08/01/business/economy/01knockoff.html?_r=2″ target=”_blank”>counterfeiting “costs American businesses an estimated $200 billion a year?”</a> I don’t reckon that Clifford can, since that number has been thoroughly debunked age and age again.
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Back in 2007 we <A href=”http://www.techdirt.com/articles/20070504/130335.shtml”>wrote about</a> a study by the well-respected GAO which noted that <a href=”http://www.gao.gov/fresh.items/d07735.pdf” target=”_blank”>industry claims on counterfeiting</a> were massively overblown. The GAO looked at the actual data and found that, contrary to claims from the industry that 5 to 7% of earth trade involves counterfeit materials, the research they’ve seen shows it happening in less than 1% of trade and the value of those goods was significantly lower. Of direction, obviously, those trying to pass counterfeit goods across the border will do their best to hide it, the evidence of the supposed 5 to 7% is really lacking.
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Soon after that, we wrote about a alike <a href=”http://www.techdirt.com/articles/20070510/040317.shtml”>OECD report</a> that tried to gaze at how huge an issue counterfeiting really was. After it was announced (before the actual report came outside) that the OECD numbers were going to exhibit that the $200 billion number was really bogus, there was lots of talk of “pressure” being place on the OECD to still support the $200 billion number. Eventually, the <a href=”http://www.oecd.org/dataoecd/36/36/39543399.pdf” target=”_blank”>actual report</a> (pdf) came outside, and the OECD hedged its bets by claiming that, much though the data didn’t support it, counterfeiting <i>could be</i> a difficulty that cost <i>up to</i> $200 billion. Lots of weasel words. However since the data was really there, some enterprising reporters, like Felix Salmon, really looked at the details and found the absolute number appeared to be <a href=”http://www.portfolio.com/views/blogs/market-movers/2007/10/26/counterfeiting-much-less-prevalent-than-you-reckon/” target=”_blank”>more like $5 billion</a>. Still an issue, however hardly $200 billion. That link amusingly goes through the report to figure outside how it came up with the “up to $200 billion” claim, and finds that the OECD, repeatedly basically says “well, this part seemed low, so we doubled it.” And then they get to the following number and affirm “well, this seemed low, so we doubled it again.” They end up doing that a bunch of times — compounding the wild ass guess much further just to constitute the industry pleased.
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However where did that actual $200 billion number come from? Well, back in 2008, Julian Sanchez famously went to <a href=”http://arstechnica.com/tech-policy/news/2008/10/dodgy-digits-behind-the-war-on-piracy.ars/1″ target=”_blank”>hunt down the origins of the claim</a>, and found that it was always really made up. Sanchez tries to track down where the number first came from, and finds it all <a href=”http://arstechnica.com/tech-policy/news/2008/10/dodgy-digits-behind-the-war-on-piracy.ars/2″ target=”_blank”>dates back</a> to a claim made in a 1993 Forbes article. That article claims counterfeiting is a $200 billion difficulty, however gives no citation or explanation, however that’s the original citation if you trace back everyone else who’s claiming $200 billion. It’s just made up. From 20 years ago. And the NY Times is still relying on it despite all of the research debunking it?
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And, of direction, all of these numbers tend to come from the industry itself, who has every cause to constitute the numbers sound larger than they really are. In circumstance, all of this ignores more recent studies that have shown the claim of “losses” from counterfeits nearly certainly massively overstates the difficulty, since a significant number of the human beings who are buying counterfeit goods (1) <a href=”http://www.techdirt.com/articles/20091202/1503337167.shtml”>know they’re buying counterfeit goods</a> and (2) at a later date, when they can afford it, often upgrade to the absolute version. In other words, the counterfeit isn’t a “loss” at all, however a market entry mark for those who never would have bought otherwise.
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So, considering that we have two respected organizations (the GAO and the OECD) showing that the $200 billion number is massively exaggerated, followed by excellent reporters like Felix Salmon and Julian Sanchez pointing outside the absolute number is much lower, and the basis for the $200 billion number is more or less made up… why is a respected publication like the NY Times still citing it as if it were factual? Of direction, I don’t mean to just pick on Stephanie Clifford or the NY Times, since plenty of reporters seem to repeat this number without thinking, however it’s about age that human beings started calling them on it, and asking them to back it up with evidence or stop using it.<br /><br /><a href=”http://techdirt.com/articles/20100801/17431810439.shtml”>Permalink</a> | <a href=”http://techdirt.com/articles/20100801/17431810439.shtml#comments”>Comments</a> | <a href=”http://techdirt.com/article.php?sid=20100801/17431810439&op=sharethis”>Email This Tale</a><br />
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