Hey NY Times: Can You Back Up The Claim Of $200 Billion Lost To Counterfeiting?

from the and-you-want-people-to-pay-you? dept

It's getting really frustrating watching the supposedly professional press repeat stats that have been thoroughly debunked as if they're factual, so I think it's about time that people started calling out the publications and reporters who make these mistakes directly. So, Stephanie Clifford, reporter for the NY Times, can you give any evidence whatsoever to support the claim that you made in your article this past weekend that counterfeiting "costs American businesses an estimated $200 billion a year?" I don't think that Clifford can, because that number has been thoroughly debunked time and time again.

Back in 2007 we wrote about a study by the well-respected GAO which noted that industry claims on counterfeiting were massively overblown. The GAO looked at the actual data and found that, contrary to claims from the industry that 5 to 7% of world 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 course, 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 totally lacking.

Soon after that, we wrote about a similar OECD report that tried to look at how big an issue counterfeiting really was. After it was announced (before the actual report came out) that the OECD numbers were going to show that the $200 billion number was totally bogus, there was lots of talk of "pressure" being put on the OECD to still support the $200 billion number. Eventually, the actual report (pdf) came out, and the OECD hedged its bets by claiming that, even though the data didn't support it, counterfeiting could be a problem that cost up to $200 billion. Lots of weasel words. But since the data was actually there, some enterprising reporters, like Felix Salmon, actually looked at the details and found the real number appeared to be more like $5 billion. Still an issue, but hardly $200 billion. That link amusingly goes through the report to figure out 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 next number and say "well, this seemed low, so we doubled it again." They end up doing that a bunch of times -- compounding the wild ass guess even further just to make the industry happy.

But where did that actual $200 billion number come from? Well, back in 2008, Julian Sanchez famously went to hunt down the origins of the claim, and found that it was always totally made up. Sanchez tries to track down where the number first came from, and finds it all dates back to a claim made in a 1993 Forbes article. That article claims counterfeiting is a $200 billion problem, but gives no citation or explanation, but 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?

And, of course, all of these numbers tend to come from the industry itself, who has every reason to make the numbers sound bigger than they really are. In fact, all of this ignores more recent studies that have shown the claim of "losses" from counterfeits almost certainly massively overstates the problem, because a significant number of the people who are buying counterfeit goods (1) know they're buying counterfeit goods and (2) at a later date, when they can afford it, often upgrade to the real version. In other words, the counterfeit isn't a "loss" at all, but a market entry point for those who never would have bought otherwise.

So, considering that we have two respected organizations (the GAO and the OECD) showing that the $200 billion number is massively exaggerated, followed by good reporters like Felix Salmon and Julian Sanchez pointing out the real 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 course, I don't mean to just pick on Stephanie Clifford or the NY Times, because plenty of reporters seem to repeat this number without thinking, but it's about time that people started calling them on it, and asking them to back it up with evidence or stop using it.


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  1.  
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    Anonymous Coward, Aug 2nd, 2010 @ 10:03am

    Who said you had to have backed up sources and data to be a journalist these days? Fact checking is optional at best if you can make everyone believe your propaganda. Welcome to the mainstream media!

     

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    Ryan, Aug 2nd, 2010 @ 10:05am

    Better Question Is...

    why is a respected publication like the NY Times still citing it as if it were factual?

    A better question is why the NY Times is still considered a respected publication. Everything wrong with mainstream media today is epitomized in the NYT.

     

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    DH's Love Child (profile), Aug 2nd, 2010 @ 10:11am

    Re: Better Question Is...

    A better question is why the NY Times is still considered a respected publication. Everything wrong with mainstream media today is epitomized in the NYT.

    Is ANY mainstream publication respected anymore?

     

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    Anonymous Coward, Aug 2nd, 2010 @ 10:12am

    haha! fact-based reporting. I cried a little from laughing.

     

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    rabbit, Aug 2nd, 2010 @ 10:19am

    I think your issue might be with the term "professional press". That term implies that there is some sort of learned, ethical standards involved. The only thing involved is money, making it, a lot of it and that means selling news (papers). $200 billion (picture Dr. Evil) is sexy and sells. Less than 1% (of anything) is not sexy and therefore is meaningless in the world of news.

     

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    TtfnJohn (profile), Aug 2nd, 2010 @ 10:31am

    It's so much easier to quote industry "sources" than dig.

    In an age when any "cub" reporter can get a by-line we are surprised that newspapers/magazines/television repeat the drivel ladled out by an industry. Particularly where said industry is complaining about copyright/patent/counterfeiting which lines up nicely with a newspaper's concerns about the massive evil known at the Internet?

    That said I would expect better from a so called paper of record or at least I used to.

    It sounds, Mike, like what you're expecting is that Ms Clifford take some time to dig rather than rewrite a stack of press releases, phone for a quote or six and get the story out by deadline. Do you know how hot and muggy it is in New York this time of year?! You want her to WORK?

    Fact checking seems a lost art when one can simply fall back on the "experts" which must be the industry itself, don't you know. Just like the Times and others went to "experts" on Wall Street who said the crash of 2008 could and would never occur even as the house of cards was collapsing all around them.

    With respect to this article I'm sure that it was found in a section of the Times filled with fashion industry, cosmetics and accessory ads just in case we needed to know who this was really written for. In this day and age one doesn't upset the people keeping a leaky boat floating.

    While I'm certain that Ms Clifford is a very nice, well educated and knowledgeable person, in a general sense as most journalism grads are, the reality is that time pressures, money and the need for eyeballs on an article means that it doesn't really matter if the story is 100% accurate, just that the publication can demonstrate to advertisers that it can draw eyeballs to the section and the ads.

    So even at the top of the news media food chain (or what used to be, anyway) it's get the story out regardless of factuality which can always be corrected a day or two from now. What we used to call Tabloid journalism if we were being nice and yellow journalism if we were really upset.

    So Ms Clifford rewrote her releases, took Forbes as true, got her quotes and pumped out her story.

    Is it any wonder that journalists are held in the same contempt as politicians?

    Though I do have to wonder if the new quotes and whatever other original contributions she made to the story fall under The AP's definition of Hot News. Ya think?

     

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    jupiterkansas (profile), Aug 2nd, 2010 @ 10:33am

    feedback

    hmm... let's see... I can email the article, facebook it, twitter it, print it, share it, recommend it, buy a reprint... everything but comment on it.

    Guess I'll have pen a letter to the editor by hand in order to leave any feedback on this article. Do you think they'll run a correction?

    That's why I read TechDirt every day and not the NY Times. It's just another big company looking out for the interests of big companies everywhere.

     

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    Dan J. (profile), Aug 2nd, 2010 @ 10:38am

    So, Stephanie Clifford, reporter for the NY Times, can you give any evidence whatsoever to support the claim that you made in your article this past weekend that counterfeiting "costs American businesses an estimated $200 billion a year?" I don't think that Clifford can, because that number has been thoroughly debunked time and time again.

    Actually, Clifford can provide support for her claim. All she has to do is link to the report in question. Clifford didn't claim that there were $200 billion in losses. Rather, she truthfully reported the fact that losses have been estimated to be $200 billion.

    Mr. Pedantic



    (PS - if the signature wasn't enough of a hint, tongue firmly planted in cheek on this post.)

     

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    TtfnJohn (profile), Aug 2nd, 2010 @ 10:38am

    Re: Re: Better Question Is...

    Better question. Is ANY so called news organization respected or trusted anymore? Could be the NYT, LAT, CBS, FOX or whoever.

    I'd suggest the answer is a resounding NO!

     

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    Brig C. McCoy, Aug 2nd, 2010 @ 10:46am

    Not just the New York Times...

    Doing a quick Google search, it's depressing how many hits you get for Counterfeiting "200 Billion". :(

    And don't even get me started on the Wikipedia article, "Counterfeit consumer goods".

    ...brig

     

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    Tom Landry (profile), Aug 2nd, 2010 @ 10:46am

    Re:

    even so, don't you think that statement can be said to support a falsehood? NYT isn't some small town paper, its the big time with supposedly professional reporters. Getting some hard evidence would show she actually put some work into the piece rather than simply doing a cut-n-paste special.

     

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    Berenerd (profile), Aug 2nd, 2010 @ 10:48am

    My next NYT headlines....

    "200 Billion Die in freak paper cutting accident!!! Obama is to blame!"

    Do I get my nobel prize nao?

     

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    James Carmichael, Aug 2nd, 2010 @ 11:04am

    F-ck yeah! That's what I call journalism. Seriously, another great post Mike.

     

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    Dan J. (profile), Aug 2nd, 2010 @ 11:07am

    Re: Re:

    Hmm, I'm not sure the statement can actually be said to support a falsehood, since it made no explicit claim as to the accuracy of the estimate. However, I fully agree that part of a reporter's job is to verify the accuracy of what he/she reports, and to note when there is substantial question as to the veracity of the claim being reported. For example, if a reporter were to note that the moon landings have been claimed to be a hoax, that would be a true statement. A responsible reporter, however, would make sure that he/she also reported that the claims are generally considered to be unreliable and have few or no mainstream backers.

     

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    vivaelamor (profile), Aug 2nd, 2010 @ 11:33am

    Re:

    "Actually, Clifford can provide support for her claim. All she has to do is link to the report in question. Clifford didn't claim that there were $200 billion in losses. Rather, she truthfully reported the fact that losses have been estimated to be $200 billion."

    Linking to a report that does not support her claim would not support her claim, however pedantic you're being. It doesn't matter if she calls it an estimate when the numbers have been deliberately fudged or are fabricated, because that's not an estimate. If it were then you could say that it is estimated that there are one billion aliens on the moon, because some guy said so.

     

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    kid mercury (profile), Aug 2nd, 2010 @ 11:35am

    IMHO counterfeiting is one of those great mysteries, i.e. how can you be 100% sure you can detect it? so while i don't have faith the in the NYT number, i don't have faith in the claims of the GAO or OECD either.

    and of course for the gold fans, all money in a fiat system is counterfeit, as gold is the only real form of money.

     

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    Anonymous Coward, Aug 2nd, 2010 @ 12:03pm

    Re: Better Question Is...

     

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    Yogi, Aug 2nd, 2010 @ 12:06pm

    Re: Better Question Is...

    Exactly - what makes the NY Times better than TMZ, which is probably more honest and open than the Times ever was and most likely at least as accurate - since no one will hesitate to sue TMZ.

    The Grey Lady is senile.

     

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    Anonymous Coward, Aug 2nd, 2010 @ 12:33pm

    real actual factual truthfull mainstream media like NY Times, i pooped a little from laughing so hard

     

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    Anonymous Coward, Aug 2nd, 2010 @ 12:34pm

    "...the OECD hedged its best by claiming..."

    The typo police say: "best" = bets (or bet?)

     

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    A Dan (profile), Aug 2nd, 2010 @ 12:46pm

    Did anyone else try?

    There's a link to contact the author on the New York Times page. I went ahead and asked:

    http://www.iacc.org

    See "About Counterfeiting -> The Truth About Counterfeiting"

     

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    Michial Thompson, Aug 2nd, 2010 @ 1:43pm

    I'll call you out little mikee

    little mikee;

    How about you quantify the number of "well they wouldn't have bought anyway?" This statement is just as bogus as the 200 million claim.

    I wouldn't ever have access to a billion dollars, does that justify my going out and counterfieting a billion dollars in currency? And if I did counterfiet that kind of currency wouldn't my turning around and spending that currency be a cost to the market???

    One of the few arguements that you post on this sight that I actually agree with is the difference between counterfiet movies and infringement. But you never once accept that the cost of infriengement of someone's copyright material is a loss of revenue to them, you just claim that they should just go find a new source of revenue.

    In this case you are refering to counterfiet goods which are only able to be physical goods, and no matter what your justification is, it is still a loss to the original owner even if the person purchasing it knows its fake and could not otherwise afford it.

     

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    Michael, Aug 2nd, 2010 @ 1:44pm

    Re: Did anyone else try?

    That was a great link for the iacc.

    I went ahead and reported their $200 billion number as a fake.

     

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    Michael, Aug 2nd, 2010 @ 1:51pm

    Re: I'll call you out little mikee

    "How about you quantify the number of "well they wouldn't have bought anyway?" This statement is just as bogus as the 200 million claim."

    The claim is not that all pirated copyright material is not a lost sale. The claim is that we have no idea how much of the pirated copyright material is, in fact, something that would have been purchased had it not been available free. Then, you add to that knowing that some portion of pirated materials also results in a purchase that would not have happened without the ability to preview the pirated version, you end up with a horribly shaky number to base any losses on.

    Mike has never said there were no losses (that I can remember, at least). All he has said is that without better evidence than a number that we KNOW is wrong, it is not a good idea to make business decisions that vilify your customers.

     

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    Michial Thompson, Aug 2nd, 2010 @ 2:50pm

    Re: Re: I'll call you out little mikee

    Again, PIRATED is infringement, I acknowledge that it's a mess to try to quantify anything in the digital arena.

    The article is refering to Counterfiet which is a physical item, not a digital one. Just last week little mikee posted about how someone was trying to mix the counterfiet and the infringement into the same box to justify more regulations and more laws etc.

    I would just be happy to see the topic remain in the physical realm such as counterfiet watches, purses, or even physical sales of counterfiet DVDs if you must.

    Whe I read that you cannot count those that wouldn't have bought an original product I see that as a lost sale. Simply because if they wouldn't have bought the original, then they have absolutely no right buying a counterfiet just because it was prices cheaper.

    The article uses this exact example, but how do you honestly justify this? You cannot claim that the cheaper price is an entry point into the market because the market on high end goods is often created by the price and availability. In high end designer crap like purses and clothing and watches etc, the cost of these items is often more the driving force for their sales than the quality or quantity. Allowing counterfiets only devalues the market created by the rights owner.

    I understand that there is a market for knock offs of every expensive product. And I understand that THAT market in most cases couldn't afford the originals and would not be a sale for the originals. BUT having counterfiets deminishes the originals through simple numbers.

    Forcing the rights holder to just lower the price because a few think it's ok to profit from someone elses success is just as ludicrous as claiming I have every right to counterfiet currency because I would never otherwise be able to have that currency.

     

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    Modplan (profile), Aug 2nd, 2010 @ 2:54pm

    Re: Re: Re: I'll call you out little mikee

    Whe I read that you cannot count those that wouldn't have bought an original product I see that as a lost sale. Simply because if they wouldn't have bought the original, then they have absolutely no right buying a counterfiet just because it was prices cheaper.


    You have no right to go to McDonalds. If you want a burger, go to one of Gordon Ramsays restaurants. Every time you buy a burger from McDonalds, it's a lost sale to Gordon Ramsay.

     

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    Jay (profile), Aug 2nd, 2010 @ 2:54pm

    Economics, GO!

    "In this case you are refering to counterfiet goods which are only able to be physical goods, and no matter what your justification is, it is still a loss to the original owner even if the person purchasing it knows its fake and could not otherwise afford it."

    Let's change this statement into an actual situation. Since we're talking about fashion right now, we'll use that.
    A woman goes to Sears and sees a Louis Vuitton bag for $500. Currently, she has $1300 total. She has to pay all of her bills which add up to $900. So if she buys the bag, she'll be about $100 short on her bills. But she really wants the bag...

    Later on that same day, she sees a vendor in a flea market that has a similar looking bag. Since it matches the red dress she picked for it, she buys the bag for $120, which doesn't cut as deeply into her purse. Later on, she notices that it says Louie Vitton on the inside.

    Now there's a few things that's going on here. First, there's a consumer surplus going on (which is never calculated when we're talking about industry numbers.), we have the fact that the bag is a substitute good (she chose the cheaper bag), and we have the fact that if she truly wanted the bag, it would be a tradeoff.

    You can change the industry as you want. This choice goes on every day in various scenarios. But saying that the original owner is losing out because of this choice made? All they have to do is drop the price until people are willing to purchase.

     

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    Mike Masnick (profile), Aug 2nd, 2010 @ 2:55pm

    Re: I'll call you out little mikee

    little mikee;

    Michial, in the past I have always treated you respectfully. I'm not sure why you feel the need to continually mock my name like this. It's childish and does little to make anyone take you seriously.

    How about you quantify the number of "well they wouldn't have bought anyway?" This statement is just as bogus as the 200 million claim.

    No, the statement that not *everyone* would have bought it is factual. I have not quantified it, as the very point is that it is not directly quantifiable. I've never said that NONE of those buying counterfeits wouldn't have bought the real one otherwise. You are making that statement up.

    I wouldn't ever have access to a billion dollars, does that justify my going out and counterfieting a billion dollars in currency?

    Of course not. But who said otherwise?

    Michial, if you wish to call me out, it helps to call me out on stuff I actually said. Otherwise it's difficult to respond to you.

    One of the few arguements that you post on this sight that I actually agree with is the difference between counterfiet movies and infringement. But you never once accept that the cost of infriengement of someone's copyright material is a loss of revenue to them, you just claim that they should just go find a new source of revenue.

    That's because it's not a "loss" of revenue. You don't see it anywhere on an income statement, so classifying it as a loss is an error. What it is, is *potential revenue* that a company *failed to capture* for whatever reason. And that's why I suggest they work on smarter business models. To help them capture that revenue they failed to capture due to changing market forces.

    In this case you are refering to counterfiet goods which are only able to be physical goods, and no matter what your justification is, it is still a loss to the original owner even if the person purchasing it knows its fake and could not otherwise afford it.

    How? How is it a loss if the person never would have bought the real product anyway? Who has lost anything, and please be specific in describing what was lost, and where that loss appears on the income statement.

     

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    Jay (profile), Aug 2nd, 2010 @ 2:56pm

    Re: Economics, GO!

    Oh yeah, forgot to mention. It's a red dress because the Devil is in the details.

    Maybe I should have changed the Vuitton to Prada...

     

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    Michial Thompson, Aug 2nd, 2010 @ 3:35pm

    Re: Re: I'll call you out little mikee

    I stand corrected, a loss of potential revenue is not the same as lost revenue.

    Are you willing to acknowledge that having counterfiet copies of products does devalue the original products, especially when the original product's value is through the scarcity of that product?

    It is a valid business model to produce a limited number of a product in a market where the demand is high in order to keep the price of that product higher. Perfect examples are Rolex and Ferrari etc.

    In the case of Ferrari it is difficult if not impossible to make a fake and sell it on the open market due to the titles and registrations through the governments. But in the case of Rolex, it is actually possible to make a near exact counterfiet copy of their product, perhaps even of better quality and sell it. Rolex's market value is directly driven through scarcity. For now the knock offs are usually of a far lower quality, but if someone was to release enough fakes at a high enough quality not to be distinguished from the originals Rolex, and their customers would be irreparibly damaged.

    Why should counterfiet Rolex watches be allowed in the market place? Their entire product line, and customer base is based entirely on scarcity? Even if 100% of those that bought the counterfiet watches would NEVER have bought an original, the fact that those counterfiets are on the market is reducing the scarcity of the original products.

    When I see someone wearing a Rolex, my first thought anymore isn't WOW that's an impressive piece of jewelry, but rather is it real or fake? That question alone devalues the actual Rolex significantly.

     

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    Any Mouse, Aug 2nd, 2010 @ 4:24pm

    Re: Re: Re: I'll call you out little mikee

    "Why should counterfiet Rolex watches be allowed in the market place? Their entire product line, and customer base is based entirely on scarcity? Even if 100% of those that bought the counterfiet watches would NEVER have bought an original, the fact that those counterfiets are on the market is reducing the scarcity of the original products."

    Because this isn't true, either. Rolex is based on quality much more than scarcity. I'm not even an economics /student/ and I can tell you that there are many more factors to the overall cost of something than just that single marker.

     

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    Anonymous Howard, Aug 2nd, 2010 @ 5:37pm

    Counterfeiting cost 17 trillion a year, no make that 20 million, I know it was some big number.

     

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    Michial Thompson, Aug 2nd, 2010 @ 5:40pm

    Re: Re: Re: Re: I'll call you out little mikee

    In the past you might have been right, Rolex quality was unsurpassed, but in modern times with modern equipment anyone with a reasonable background in engineering and a desire to take the time for quality a Rolex copy could be easily made that matched or exceeded their quality levels.

    Rolex is more about the name today than anything else. Their quality may be top knotch, but it is easily re-created with todays equipment.

    Making exact copies of music isn't the only thing that the digital age has made cheaper.

     

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    Jay (profile), Aug 2nd, 2010 @ 5:56pm

    Re: Re: Re: Re: Re: I'll call you out little mikee

    You're still not paying attention to all of the variables regarding a counterfeit. Supposedly people can make a "perfect" copy of a Rolex. Enough to fool customers that one is similar in styling. You're ignoring the time it takes to make this "perfect" copy, which is divested into schematics, knowledge of a certain brand of watch (which is always changing) and even type of battery.

    Your argument throws away so much for an assumption of perfection. This isn't the case.

     

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    teka, Aug 2nd, 2010 @ 6:11pm

    Re: Re: Re: Re: Re: I'll call you out little mikee

    Are you really claiming that since a skilled machinist could theoretically replicate a Rolex, physical goods are the same thing as digital goods?

    First off, this is not the easy task that you claim has been "made cheaper" by "the digital age". i am not a watchmaker but i have enough of a grasp of fine machining to know that reaching that level of precision is expensive and difficult.

    Rolex is still known as a high-quality watchmaker and i have not seen anything to make me assume that this perception is changing. As an aside, i might personally pay more for a hand-built watch built from scratch by a machinist then a factory-made watch.

     

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    Cipher, Aug 2nd, 2010 @ 6:38pm

    Re: Re: Re: I'll call you out little mikee

    When I see someone wearing a Rolex, my first thought anymore isn't WOW that's an impressive piece of jewelry, but rather is it real or fake? That question alone devalues the actual Rolex significantly.

    How is this even remotely relevant to the fact that the industry is just making shit up for their purported sales loss numbers?

     

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    tezza, Aug 2nd, 2010 @ 7:02pm

    Re: Re:

    really?
    a billion aliens?!
    On the Moon!!

    AWESOME!!!

    :D

     

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  38.  
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    Anonymous Coward, Aug 2nd, 2010 @ 7:35pm

    46% of reported statistics are unsuported.

     

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    Anonymous Coward, Aug 2nd, 2010 @ 7:37pm

    20% of words are mispeled

     

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    Stephen Samuel (profile), Aug 2nd, 2010 @ 7:47pm

    So, then it's actually LESS than$5bn?

    Cipher: part of the value of a REAL rolex is that it's expensive, and people KNOW that it's expensive.

    Somebody that's able to afford a real Rolex isn't going to buy one, and is unlikely to be fooled by some of the counterfeit Rolexes that I've seen out there (not once they've tried a real one, anyways).

    Somebody who can only afford to spend $50 on a watch isn't going to buy a real Rolex, so that's not any sweat off of the nose of the real manufacturer. .... As was pointed out in the article, though, many of the people (especially younger people) who buy a fake {brand} watch will aspire go get a real {brand} watch "when I get older". In that respect, having counterfeit gear out on the market really is free advertising for {brand}.

    In other words, counterfeit goods result in sales that would otherwise not have existed ... while, at the same time, {brand} can disclaim any responsibility for those cheap knockoffs that sell in a market that they can't afford (brand wise) to pander to.... even though that market is a 'farm team' market for the real McCoy.

    Yeah... that's right. Rolex (your example) actually gets to play both sides of the market. They get to disclaim the cheap knockoff Rolexes, On one hand, that actually BUILD a market for real Rolex watches at full price, while distancing themselves from the same farm team that they're taking advantage of.

    I wouldn't be at all surprised to find that some high-end brands are actually supporting some knockoff retailers on the sly because it ends up as free advertising.

    Microsoft has been doing this for years -- turning a blind eye to counterfeit MS software in places where their full prices can't be afforded in order to prevent competitors from gaining a foothold ("Why should I pay $50/copy for Mikie's Office suite when I can bootleg a 'real' copy of MS office for free).

    At the same time, they file lawsuits against larger companies to get them to buy 'site licenses' for more copies than they actually use so that they don't have to go through the bureaucratic hell of having to maintain proof of purchase for every piece of software on every machine that any employee has ever used.including reinstalls and replacements.

    It's actually no skin off of Microsoft's backs because they don't actually pay anything out of pocket for the bootleg copies. On the other hand, they still get to maintain a monopoly on the market because everybody can presume that "everybody who matters has a copy of MS Xxx". This leaves people in that market feeling that they have to have a copy of MS Xxx, and so the cycle continues.

     

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  41.  
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    Jay (profile), Aug 2nd, 2010 @ 8:01pm

    Re: So, then it's actually LESS than$5bn?

    Well, Bill Gates has gone on record in saying that "if people must copy a program, the best they can do is copy mine"

    Adobe feels the same way. Those people that are adept at how Photoshop does theirs can be sure to understand that once they get a job in the technical field, they'll be using the programs they are most familiar with. I wonder how much of the supposed piracy actually benefits these giants...

     

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  42.  
    identicon
    Anonymous Coward, Aug 2nd, 2010 @ 8:17pm

    Re: Re: Re:

    the statement does support a falsehood. If she reports it, then she is saying it's true. Can I put out a study that says we lose 100 trillion dollars a year to music piracy? Sure. Will she report that?

     

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  43.  
    identicon
    Michael, Aug 2nd, 2010 @ 8:29pm

    Re: Re: Re: I'll call you out little mikee

    "The article is refering to Counterfiet which is a physical item, not a digital one. Just last week little mikee posted about how someone was trying to mix the counterfiet and the infringement into the same box to justify more regulations and more laws etc."

    i apologize, I have never seen any study that claimed the $200 billion loss that did not lump in counterfeiting with infringement. I assumed you (because all you do is spout industry numbers) would continue down that path. So, to start with, can you provide a study that has not been debunked in which the $200 billion number is attributed to counterfeiting alone?

    "Whe I read that you cannot count those that wouldn't have bought an original product I see that as a lost sale. Simply because if they wouldn't have bought the original, then they have absolutely no right buying a counterfiet just because it was prices cheaper."

    Absolutely, but you cannot count this as a loss to the copyright holder due to counterfeiting. This is a lost sale due to the product not providing enough value to the customer. Saying that the person who did not buy a corvette because they could only afford a civic is stealing from Chevrolet is the exact same thing. At best, the customer who bought the counterfeit product was a lost opportunity to the copyright holder - because they sell something the customer wants, but do not provide enough incentive at the price point they have chosen.

    "Allowing counterfiets only devalues the market created by the rights owner."

    This suggests you do not understand the economics involved. Studies suggest that counterfeit products in the fashion industry increase the value of the originals. It does not diminish the market by flooding it with numbers. I understand why you think it does, but repeated studies (just search Techdirt a little) indicate otherwise.

    "Forcing the rights holder to just lower the price because a few think it's ok to profit from someone elses success is just as ludicrous as claiming I have every right to counterfiet currency because I would never otherwise be able to have that currency"

    Nobody is saying they have to reduce their prices. I am not sure where you get that, but take it out of your argument. I am not saying that anyone has the right to create counterfeit products. All I am saying (and the article) is that the $200 billion number is bogus by all of the evidence provided. If you can come up with compelling proof that counterfeit products are a real economic problem that hurts our economy as a whole (not just some specific companies, but overall), please provide it.

     

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  44.  
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    Michial Thompson, Aug 2nd, 2010 @ 8:33pm

    Re: So, then it's actually LESS than$5bn?

    First off is it possible for even one commenter on here to read? Discard ALL digital anything in my conversation...

    Counterfiet and Copy and Infringement are all THREE DIFFERENT ITEMS.

    You can physically COPY a Rolex without it being counterfiet. All you need to do is remove any and all logos and names etc and rebrand with anything that is not trying to make your product sound or look like a Rolex. This would be a copy of the Rolex, but would NOT be a counterfiet.

    When you counterfiet something you are making an effort to present your product as something it is not. So when you put the Rolex logo and name on your product you are then counterfieting a Rolex watch. Big difference....

    If you started a company called Mikes Watches and sold a Watch called Mikes Time Piece you are not counterfieting anything. While you may or may not be infringing on patents that's an entirely different thing.

    Counterfieting is intended to fool someone into thinking that a fake is the real thing (even if you know different). Why exactly does someone need a counterfiet anything? The answer is to fool/defraud others either fool them into thinking you have something you don't or worse to defraud them our of something.

    Counterfiets HURT everyone and help absolutely noone except the counterfieter. If you want to quantify the numbers it's simple, you simply total the number of counterfiets sold times the amount of the sale and compare that to the cost of the same numbers of real items. VERY simply.

    Claiming that someone might some day buy the real thing, or that they would never buy the real thing doesn't justify anything other than the effort to keep an illegal industry available.

    Counterfieters make money by capitalizing on the rights owners advertising, hard work. What is wrong with simpl rebranding their fake product with a legitimate brand and advertise, distribute and sell their products? Hmmm they would have to then EARN the money and OH they wouldn't be able to sell as cheap.

    keep to tangible goods, not digital, so software doesn't really apply because the actual counterfiet market in digital goods is insignificant, the internet has pretty much wiped out that market all together, why pay next to nothing for a counterfiet digital anything when you can just download the same thing for free and face the same penalty....

     

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  45.  
    identicon
    Rick, Aug 2nd, 2010 @ 9:01pm

    Re: Re: Re: Re: Re: I'll call you out little mikee

    In the past you might have been right, Rolex quality was unsurpassed, but in modern times with modern equipment anyone with a reasonable background in engineering and a desire to take the time for quality a Rolex copy could be easily made that matched or exceeded their quality levels.
    If they are better, and aren't breaking anything other than trademark law, I don't see it as that big of a problem. While it sucks for Rolex, the justification of trademark for the government to concern itself with is consumer protection, and while there would be some issues, if consumers are better off with fake Rolexes, then the harm is pretty limited. It seems similar to how De Beers whines about synthetic diamonds that are actually better quality than real diamonds.

     

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  46.  
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    Jay (profile), Aug 2nd, 2010 @ 9:47pm

    Re: Re: So, then it's actually LESS than$5bn?

    "Counterfiets HURT everyone and help absolutely noone except the counterfieter. If you want to quantify the numbers it's simple, you simply total the number of counterfiets sold times the amount of the sale and compare that to the cost of the same numbers of real items. VERY simply."

    Very FALSE.

    From the very real GAO report about counterfeit items:

    ". Some consumers may knowingly purchase a counterfeit or pirated productbecause it is less expensive than the genuine good or because the genuine good is unavailable, and they may experience positive effects from suchpurchases. For example, consumers in the United States and othercountries purchase counterfeit copies of high-priced luxury-brandedfashion goods at low prices, although the products’ packaging and salesvenues make it apparent they are not genuine. Consumers may purchasemovies that have yet to be released in theaters and are unavailable inlegitimate form. Lower-priced counterfeit goods may exert competitivepressure to lower prices for legitimate goods, which may benefitconsumers.

    ..

    "Counterfeiting and piracy areillicit activities, which makes data on them inherently difficult to obtain. Indiscussing their own effort to develop a global estimate on the scale ofcounterfeit trade, OECD officials told us that obtaining reliable data is the most important and difficult part of any attempt to quantify the economicimpact of counterfeiting and piracy. OECD’s 2008 report, The EconomicImpact of Counterfeiting and Piracy, further states that available information on the scope and magnitude of counterfeiting and piracyprovides only a crude indication of how widespread they may be, and thatneither governments nor industry were able to provide solid assessmentsof their respective situations."

    "Because of the lack of data on illicit trade, methods for calculatingestimates of economic losses must involve certain assumptions, and theresulting economic loss estimates are highly sensitive to the assumptionsused. "

    If you're going to make an assumption about the real items, make sure it's not automatically debunked in 5 seconds flat.

     

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  47.  
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    techflaws.org (profile), Aug 3rd, 2010 @ 3:03am

    Re: Re: So, then it's actually LESS than$5bn?

    First off is it possible for even one commenter on here to read?

    You mean just like you, when Mike had to correct you and you said "I stand corrected"?

     

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  48.  
    identicon
    Michael, Aug 3rd, 2010 @ 4:29am

    Re: Re: So, then it's actually LESS than$5bn?

    "Counterfiets HURT everyone and help absolutely noone except the counterfieter. If you want to quantify the numbers it's simple, you simply total the number of counterfiets sold times the amount of the sale and compare that to the cost of the same numbers of real items. VERY simply."

    You repeatedly make this argument and it is immediately debunked. You would really have an easier time convincing people if you actually read and thought about what you are saying.

    Your statement is completely wrong. It assumes that everyone that bought a counterfeit product:
    1) did not know it was counterfeit - the GAO study proved this incorrect since they found many people (just one would do) that bought the counterfeit product knowingly.
    2) Everyone that bought the counterfeit product would have bought a real one if a less-expensive counterfeit was not available. We know this is untrue as well.

    So, your "VERY simple" math is now far more complicated because of some basic economic concepts that you simply want to ignore because they go against your argument.

     

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  49.  
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    Troy, Aug 3rd, 2010 @ 5:10am

    Its not just consumer goods

    Most of the discussion is centered around consumer knockoffs like purses and such. What about the very real loses to counterfeit items such as routers, servers, etc? It is difficult to tell the difference between a genuine Cisco router and a knockoff once it is in the channel. Counterfeit items like these CAN and DO result in REAL loses to companies.

    Even at the consumer level not every counterfeit purchase is intended. When a consumer intends to buy real Prada shoes or hand bag and instead ends up with a high quality knockoff then that is a real loss.

     

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  50.  
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    Michial Thompson, Aug 3rd, 2010 @ 5:58am

    Re: Re: Re: So, then it's actually LESS than$5bn?

    The GAO and your agument assume that the consumer has every right to buy a knock off just because they know that it's a knock off, and it's cheaper. The consumer has absolutely no right to the knockoff nor does the manufacture of the knock off have any right to capitalize off of the work of the creator....

    When you take the simple approach that all corporations are bad just because they make money you will quickly find that no corporation exists and you will be begging for stuff you once had access to.

    Without the financing of the big corporations most of the products we have today would never exist. The money that goes into R&D is not free, and its far from cheap, and those willing to invest that money deserve to recover it.

     

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  51.  
    identicon
    Bob, Aug 3rd, 2010 @ 6:59am

    Re: Its not just consumer goods

    [quote]When a consumer intends to buy real Prada shoes or hand bag and instead ends up with a high quality knockoff then that is a real loss.[/quote]

    All counterfeit products are sold well below what the real product costs. Anyone buying such cheap products must know somewhere deep down that they must be getting a deal for some reason or another.

    There are no free lunches and those infomercials on late at night will not make you skinny.

     

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  52.  
    identicon
    EvilDave, Aug 3rd, 2010 @ 7:15am

    Pot, Kettle, Black

    why is a respected publication like the NY Times still citing it as if it were factual?
    Why is a blog like Techdirt, which is not a respected publication, criticizing a respected organization like the New York Times?

    I do not trust OECD numbers as it is an organization dedicated to globalization.

     

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  53.  
    identicon
    kamakazi, Aug 3rd, 2010 @ 8:04am

    Re: Re: Its not just consumer goods

    Actually, no, not all counterfeit goods are sold significantly cheaper than the real products. In fact, if the counterfeiters can manage to pollute a normal supply chain the retailer and the customer pay full price, and think they are buying real Levi's Jeans or Adidas sneakers or Cisco routers. In some cases the counterfeit may even be "real" in that it was made in the same factory on the same assembly line by the same workers, but never authorized by the actual owner of the product. This is an almost inevitable result of farming your manufacturing out to poorer countries where enterprising people see an opportunity to make some money. Not condoning or justifying it, but if you don't have absolute control of your manufacturing chain you are most likely going to have leakage from said chain.

    And moving manufacturing to countries like China where such counterfeiter at times seem to have government support if not actual involvement, well, I guess you would need to estimate such losses and put them in your cost analysis.

     

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  54.  
    identicon
    Anonymous Coward, Aug 3rd, 2010 @ 8:14am

    Re: Better Question Is...

    Comments like this are just ignorant and incredibly distressing. Certainly the quality of the New York Times has regressed over the past decade and most mainstream media do in fact have large corporate overlords and derive 75% of their revenue from advertisers, the latter two being factors that unfortunately influence editorial decisions and reporting. However, the NYT (and LA Times and Washington Post and much of the mainstream you hate) still actively invests in newsgathering operations at high levels and are among the relatively few organizations capable of sending personnel to give first-person accounts of events.

    These accounts allow blogs to offer better synthesis, which is indeed what [most] blogs do, as they generally lack the resources to do intensive primary reporting of their own (of course, there are exceptions). Without the horrible mainstream media, the synthesis would have to be made from wholly-interested sources, as opposed to partly-interested ones. Thus, both blogs and mainstream news organizations have a role to play in the media ecosystem.

     

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  55.  
    icon
    Richard (profile), Aug 3rd, 2010 @ 8:33am

    Stephanie Clifford

    Good article. It really does get my goat when they just pick a random large figure out of the air for the shock effect. Journalists these days are getting really lazy, and reporters like her aren't helping those few out there who know what a real & true report is. Her Twitter username is @stephcliff I just linked her this piece, so let's see if she will give any hard evidence of her fact gathering.

     

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  56.  
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    Jay (profile), Aug 3rd, 2010 @ 9:17am

    Assume = Ass out of U and ME

    Look, your argument is inaccurate. You tried to say that people won't know about the differences in Rolexes because they can make a digital copy. People told you about the variables that can make this untrue.

    Then you say we should calculate how many counterfeits are seized in a year. Which again is complete BS because, again:

    "available information on the scope and magnitude of counterfeiting and piracyprovides only a crude indication of how widespread they may be, and thatneither governments nor industry were able to provide solid assessmentsof their respective situations.""

    And the OECD report is nothing more than a guess. It's a made up number.

    Now you're saying "if we didn't have government protection, or don't protect the consumer from these ill gooods, we'll lose corporations?"

    If you take away the patents and copyrights, what's going to happen is that you'll have smaller businesses in the field, not a monopoly run by one. Innovation would work and become a lot more important as first runners get the most profits.

    If you really need everyone to prove you wrong, then look at the recent posts Mike has done about software patents. No one said R&D is free, it's just a fact that monopolies do LESS of it because they have no incentive to alter the field and the status quo.

     

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  57.  
    identicon
    Anonymous Coward, Aug 3rd, 2010 @ 9:47am

    Re: Re: Better Question Is...

    An even better question... With people living almost everywhere in the globe, with access to Internet, why is it needed to send anyone there to report on whatever? Why do we keep insisting that a reporter from another country, continent, almost a different planet, has more objectivity then a local blogger?

    Why do we need mainstream media to tell us what news are "important"? Why do we need their summary, if it is proven that it is biased from their advertisers? Why do we need editorial decisions based on criteria that has absolutely nothing to do with truth, public interest, but only the shareholders & advertisers?

    I stopped reading newspapers in 1990. When occasionally I pick one up, from a coffee table or something like that, I find them so utterly depressing and limited, that I immediately put them down. When I go to one of those mainstream media sites, the articles are small, limited, mostly offer no way to give commentary, and, even when they do, there's a incredibly complex process to be able to do it.

    So, again I ask, why do we still need them?

     

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  58.  
    identicon
    Anonymous Coward, Aug 3rd, 2010 @ 1:43pm

    Re: Re: Re: Better Question Is...

    An interesting take, but unfortunately rests too much in the ideal world, at least in the present.

    The mainstream media has the advantage of having an established network. While the local blogger in Georgia may offer a more nuanced account of the Russian incursion, he or she is limited to a niche audience and be unable to convey the message to a mass audience. Once that local blogger becomes more prominent, they are also likely to be arrested or sued (deservingly or not) by self-interested parties should their reporting be particularly critical; media companies generally can afford counsel to protect reporters. In a larger context, mainstream media companies also have the war chests necessary to fight for important press freedom cases.

    As for the insinuation that media are slaves to their advertisers, that is not quite the case. As stated earlier, the media are influenced by advertisers are ownership structure; however, they have repeatedly (and recently) shown the capacity to break news that earns little goodwill from said entities. For example, in 2005, Andy Revkin of that awful New York Times uncovered connections between the climate denial industry and the White House. More recently, in 2008, David Barstow, of that same horrible rag, exposed the Pentagon's use of former military personnel as independent military analysts.

    This is no unconditional defense of the mainstream media. Undoubtedly, they have serious issues, one of which is certainly their responsibility to shareholders and advertisers. However, in addition to this, it is fair to say that the expectation of cost-free, high quality journalism (the catch-22 of I won't buy the paper until they are invest in more original reporting) and rampant public misconceptions (i.e. the liberalism of mainstream media that forces a reactionary conservative response to create the illusion of balance), among other issues, compounds the problem. Even non-profit mass media that attempts to do primary reporting is dealing with this reality.

    While a more sophisticated media ecosystem may arise, giving local bloggers a platform that is easily accessible to a mass audience (while a WordPress account makes it possible for a wide audience to access your site, it does not make your site accessible to a mass that has difficulty distinguishing it from similar alternatives and lacks the time to invest in deep searching) and a means to support continued dedication to the endeavor (i.e. sustainable revenue), the scenario you propose is unlikely to serve as a serious alternative.

     

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  59.  
    identicon
    Anonymous Coward, Aug 3rd, 2010 @ 2:47pm

    Re: Re: Re: Re: So, then it's actually LESS than$5bn?

    Rights= Morals

    No one is arguing the morals, just the economics.

    If you want to discuss the rights, that's an entirely different subject.

    I can start by saying, no producer has the right to expect profit. That's a goal, not a right.

    Also, no one is saying that we concur with the counterfeiting, but, we do find it an open market function, offer the same or similar, by a smaller price or bigger abundance. Also, we only state that "IT HAPPENS", not that it's alright to do it. Since it happens, deal with it, and no, the way they are fighting it, totally does NOT work.

    ;)

     

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  60.  
    identicon
    Fekix Unger, Aug 3rd, 2010 @ 3:14pm

    Re: Assume = Ass out of U and ME

    YEAH RIGHT!!!

     

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  61.  
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    David Sanger (profile), Aug 5th, 2010 @ 7:03am

    Whatever the amount of revenue that would have been received if everyone who bought counterfeit goods bought "the real thing", it would not all be profit.

    These "lost sales" are for goods which were never produced (for lack of demand).

    A real estimate of lost or potential profit would have to factor in the full cost of production.

     

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  62.  
    icon
    Richard (profile), Aug 5th, 2010 @ 9:02am

    Claims back-up

    She sent me a message on Twitter stating 'stephcliff

    @TheGift73 Happy to provide backup. Please e-mail me at sclifford at nytimes dot com.'

    So I asked her:

    'Dear Stephanie,

    Thank you for your reply on Twitter.

    Can you give any evidence to support the claim that you made in your article this past weekend that counterfeiting "costs American businesses an estimated $200 billion a year?" The figure seems ridiculously high?

    Could you also please state your sources.

    Kind regards,

    Richard'

    Still no reply 24hrs later and I doubt she will.
    Will keep you updated if she does.

     

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  63.  
    identicon
    thomas sabo charms, Nov 3rd, 2010 @ 8:00pm

    thoams sabo charms

    Particularly like your home, hope to have time to talk to you, thank you, bye!

     

    reply to this | link to this | view in thread ]


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