Piracy stats don't add up

A confidential briefing for the Attorney-General's Department, prepared by the Australian Institute of Criminology, lashes the music and software sectors. The draft of the institute's intellectual property crime report, sighted by The Australian shows that copyright owners "failed to explain" how they reached financial loss statistics used in lobbying activities and court cases.

Figures for 2005 from the global Business Software Association showing $361 million a year of lost sales in Australia are "unverified and epistemologically unreliable", the report says. BSAA chairman Jim Macnamara said the figure was an extrapolation, but other studies had supported it. "They're entitled to say they're not convinced, but not necessarily entitled to say it's unverified," he said.

The study, which says some of the statistics used by copyright owners are "absurd", will be redrafted after senior researchers disagreed with its conclusions. Painting a picture of an industry seething with competitive jealousies, the report describes how "well-connected Canberra-based lobbyists" fight for government attention and police time on piracy.

Researcher Alex Malik, working for the AIC under a commission from the Attorney-General's Department and IP Australia, was particularly critical of the use of statistics in court. "Of greatest concern is the potentially unqualified use of these statistics in courts of law," the draft reads. Mr Malik declined to speak to The Australian, citing a confidentiality agreement.

Institute principal criminologist Russell Smith said the report was an early draft that was being edited by the agency. "We wouldn't use language like that because it's not accurate, it's hyperbolic and overblown," he said. "It was a very early draft written by a consultant, and we would want a chance to revise it.

"We have an extensive quality control system in the institute, so that drafts are read by most senior staff. "The report hasn't been finalised. It's still being edited and revised." Copyright owners have lobbied for several years to have a study done, hoping their figures will result in more law enforcement action on piracy.

The report, intended as a confidential government briefing, casts doubt on the methodology of some industry piracy studies. It says the manager of the recording industry's anti-piracy arm, Music Industry Piracy Investigations, did not know how piracy estimates were calculated, as that work was done by the International Federation of Phonographic Industries in London.

Copyright owners often use street-value estimates to calculate losses, but this assumes that every person who bought pirated goods would otherwise have paid for a legitimate item, the report notes. MIPI manager Sabiene Heindl defended the figures, which she said were based on local survey, research and seizure statistics, but compiled in Britain. "The reason I wasn't personally aware of how they are prepared is because they are compiled by the IFPI," she said. "They have a group that has been doing this for some time."

Ms Heindl said the report was not intended to be made public. "We haven't had an opportunity to see the report," she said. "My understanding is it wasn't to be a public document and that any submissions were to be considered confidential."

The most recent locally commissioned study was in the late 1990s, Mr Macnamara said. Many copyright holders claimed links between piracy and organised crime, but AIC researcher had found nothing to support that view. "Either there is no evidence of any links between piracy and organised crime or it is simply beyond the capacity of rights holders to identify these links," he wrote, adding that he was concerned about the way piracy figures were being used. "It is inappropriate for courts and policy makers to accept at face value currently unsubstantiated statistics. "Either these statistics must be withdrawn or the purveyors of these statistics must supply valid and transparent substantiation."

Some industry groups were reluctant to work with researchers, because of concern about data leaking to competitors. Much of that has to do with a fight over access to resources. "There is a perception among some rights holders that they are in competition with each other over limited federal government resources," the report says. "They fear that if they reveal the nature of their relationships with government, such as the placement of well-connected Canberra lobbyists, they will jepordise their advantage."

The Australian
NOVEMBER 07, 2006