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COUNTERFEITS/
COPYRIGHT-BASED GOODS
source: www.anti-counterfeitcongress.org/
wco2004/website.asp
europa.eu.int/comm/internal_market/
en/indprop/piracy/lvconen.pdf
www.wcoipr.org/wcoipr/default.htm?/
wcoipr/Menu_Alliance.htm
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While recording piracy often is seen as a victimless crime, the impact is felt throughout the entire music/design value chain…- the victims include artists whose creativity gets no reward; the loss in hundreds of millions in tax revenue; economies that are deprived of new investment; consumers who get less diversity and choice; and record producers who are forced to reduce their artistic rosters because it is impossible to compete against theft;
- it is estimated that organised crime gangs earn US$4.6 billion dollars from music piracy annually. Almost all countries in the world are affected to some degree and it is the poorest that suffer the most from this menace, preventing investment, destroying livelihoods of artists and the incipient industries;
- according to the International Federation of the Phonographic Industry (IFPI) sales of illegal compact discs increased by nearly 20% in 1996 and account for 14% of the relevant market at world level. The number of jobs lost through counterfeiting may be put at 100,000 a year for the European Community (120,000 for the United States) over the past ten years;
- according to the World Customs Organization, it’s estimated that worldwide about 1 in 3 recordings is pirated. In Europe, the problem is most acute in Greece, where 24% of the music CD market is estimated to be in the hands of counterfeiters, in Italy (20%), and Finland (20%). Ukraine and Russia are major suppliers of counterfeit CDs to Europe. Their estimated manufacturing capacity vastly outstrips local market needs;
- organised crime groups involved in counterfeit CDs are embracing globalisation in terms of both sourcing of supplies and developing markets. In January 2000, for example, police in Germany seized 500,000 counterfeit CDs manufactured in the Ukraine and destined for Uruguay;
- counterfeit discs are sold openly on the streets and in markets in a business largely controlled by crime syndicates. Often these same syndicates are involved in people trafficking using illegal immigrants working as virtual slave labourers to duplicate and sell the discs. Eastern Europe suffers from enormous over capacity and also from the transshipment of optical discs from plants in Russia for sale throughout Europe;
- according to statistics published on February 2005 by the European Commission, CDs, DVDs and cassettes continued to be popular choices for counterfeiters, with 33 million of such seizures (a third of the 2003 total) representing an increase of 172% over 2002. According to the World Customs Organization, software companies lose €3.8 billion per year in Western Europe alone;
- the Russian Federation with 32 known optical disc plants producing approximately 350 million discs per year continues to export large numbers of high quality counterfeits to all parts of the world. In a recent case an illegal plant was discovered with three DVD lines capable of producing 18 million DVDs per year;
- in 2004, in the Moscow region (the town of Pushkino), was stopped the performance of a clandestine factory producing counterfeit digital media in the DVD format and releasing up to 2 million units per month. 25,000 DVDs were confiscated including those with pornographic content, 3 production lines to the amount of US$10.5 million are eliminated; (1)
- a study conducted by the Baltic Region Office of Microsoft, reveals that the level of piracy of computer programs is 53% in Estonia, as compared to the 56% in Lithuania and 59% in Latvia. The study estimated that in 2003 IT trading firms would lose about €70million in Estonia, about €89million in Latvia and about €185million in Lithuania; (2)
- in Asia, illegal industrial plants continue to produce enormous amounts of infringing product for distribution in the region. China with the largest capacity of any country in the world and an internal piracy level of about 90% causes grave concerns. Organised crime controls most of the sales throughout the region;
- US industry has estimated it is losing between US$200 billion and US$250 billion annually because of copyright piracy around the world, an enormous sum but still well below the record US$666 billion current account trade deficit the country recorded in 2004. On the domestic market, the US copyright industry puts its losses due to piracy at between US$12 billion and US$15 billion a year;
- Africa has a huge potential but the majority of its markets are devastated by endemic piracy ensuring that those with musical talents are unable to make a living from their creative abilities. Poor quality CDs are flooding into the markets from South East Asia and Pakistan. Between August and October 2003 six containers were intercepted by Customs in Durban, South Africa en route to Nigeria from Malaysia. In the containers were found 1.5 million pressed discs containing music by both western and African artists. Without exception all these discs were of very poor quality;
- East African states such as Kenya and Mozambique are targeted by illegal producers in Pakistan who use these countries as distribution points from which to sell Asian, African and other styles of music. Pakistan is now one of the largest exporters of pirate discs. Despite several notable successes by customs officers in these countries the exports continue unabated;
- in Latin America, whole markets have been destroyed by the importation of cheap recordable discs, which are then recorded by organised criminal gangs. The whole region is affected but two countries, Brazil and Mexico have seen genuine music sales slump causing grave economic harm to both the countries and their artists. Recording piracy in Brazil has grown exponentially since 1997, from 5% of the CD market in 1997 to 52% in 2003. This translates into a volume of 94 million pirated units in 2003. Record sales revenue in Brazil dropped some 55%, over a five-year period ending in 2002, and have continued to slide since then. More than 2,000 stores were closed due to recording industry piracy, resulting in the loss of some 55,000 jobs over three years; (3)
- the combined total losses to the US copyright-based industries in Brazil, including software, records and music, entertainment software, and motion pictures, totaled US$785 million in 2003, according to the International Intellectual Property Alliance; (3)
- In Mexico, 60% of all sound recordings and 55% of software sold is contraband or pirated. Mexico ranks third in the world, after Russia and China, in sales of pirate CDs, according to the International Federation of the Phonographic Industry (IFPI). Annual sales of bootleg CDs total around 400 million dollars in Mexico. According to official statistics, 22 million legal copies of films are distributed annually every year, compared to nearly 30 million pirated copies. In terms of software, it is estimated that of every 100 products sold, 55 are illicit. Peddlers of pirated goods are able to offer films, music, video games or software long before legal copies appear on the market in Mexico. The price difference between legal products and bootleg copies can amount to more than 300%. (4)
(1) Ministry of Economic Development and Trade of the Russian Federation, January 2005.
(2) Published in Äripäev, no.215; November 26, 2002, p.4.
(3) www.brazilcouncil.org/usermedia/MediaLibrary/
Counterfeiting_and_Piracy_in_Brazil.pdf
(4) www.harolddoan.com/modules.php?name=News&file=article&sid=67
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