PolitiFact Trashes Lamar Smith: Says His Claims About Economic Impact Of Piracy Are Flat Out False

from the fact-checking dept

We've pointed out before that Lamar Smith based his entire argument for why SOPA was needed on misleading or simply incorrect claims -- but who are we to say that? Thankfully, it appears that the professional fact checkers are in agreement that Smith's argument for SOPA isn't based in reality. The famed PolitiFact fact checking operation has completely dismantled Smith's claim that "illegal counterfeiting and piracy costs the US economy $100 billion every year."

It turns out (as we've pointed out) there's nothing true about that statement. PolitiFact tracks down the key points on which Smith bases this claim, noting that it's a Chamber of Commerce report that says, "the U.S. consumption-based share of counterfeit and pirated goods is between $66 billion and $100 billion." Smith, obviously, just takes that higher number (already a questionable move), and insists that's the "harm." But, as PolitiFact points out, that's not what the report actually says.

In fact, the report flat out states that it "has not attempted to estimate business losses associated with counterfeiting and piracy." So to pretend that's what the report says is, well, lying.

PolitiFact checks in with a number of experts -- including someone from the Chamber of Commerce who produced the report -- who admits that it's simply not true to say that $100 billion is the cost to the economy. Add everything up, and PolitiFact says that Smith is being anything but truthful in his claims:
Smith’s statement draws on a high-end estimate also based on flawed assumptions for the U.S. "consumption-based share of counterfeit and pirated goods" in 2008. The cited $100 billion figure doesn’t reflect the costs to the economy, contrary to Smith’s claim; the 2011 study did not assess such costs, which are understandably slippery.

Maybe there is no solid estimate of the cost to the economy. Smith’s CNN.com statement rates False.
Unfortunately, there still doesn't appear to be any punishment for trying to pass a really bad bill by using misleading stats, other than public ridicule.

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  1. icon
    Josef Anvil (profile), 7 Feb 2012 @ 1:48pm


    Maybe my math is just THAT bad. I thought the music and movie industries took in roughly $14 billion each in 2011. So thats $28 billion, but lets just say $100 billion for fun. I know there are counterfeits out there and let's not forget software and books, but I'm guessing that ICE and the MPAA and RIAA are more focused one movies and music.

    So Lamar Smith wants us to believe that revenues for these companies would double if we eradicate piracy ? If you do adjusted dollars for all the industries impacted by piracy for 1992, will we find that the revenue is double what it is now?

    $100 billion loss to the economy??? So all of the money would have to leave the US and not be processed by US financial institutions. Kim Dotcom must be rolling in cash.

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