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Piracy, Social and economic lmpacts

Introduction: Piracy is an act of taking, using or duplicating of copyrighted or patented material without authorization or without the legal right to do so. Counterfeiting and piracy are longstanding problems that appear to be growing in scope and magnitude. These practices can have negative effects on the society as well as on the economy. The emergence of the Internet has signicantly increased the distribution channels for counterfeit and pirated goods, and raised jurisdictional problems in combating such practices. The areas affected by piracy and counterfeiting are the following: copyrights, trademarks, patents and industrial designs. What are the economic and social consequences of counterfeiting and piracy?

Consequence 1: Piracy destabilizes markets Market destabilization can be seen in areas heavily affected by counterfeiting and piracy. Manufacturers, both local and from abroad, loose trust in the market place if they realize that their intellectual property rights are not respected and cannot effectively be enforced. This has been demonstrated to lead to a decline in investment.

Consequence 2 Piracy stirs up criminal environment Another negative impact is the illegal and often criminal environment in which the illicit piracy and counterfeiting activities take place and the resulting negative impact on the public order. Because of the high prot and the relatively low risk, counterfeit and piracy activities are in many cases related to organized crime. Prots made from illicit activities can be employed to fund other criminal activities.

Consequnce 3: Counterfeited goods are sometimes harmful to human Approximately 192,000 people died in China in 2001 due to counterfeit pharmaceuticals. Dozens of infant deaths in eastern China may have been caused by counterfeit milk formula. The aspect of a concrete risk for security and health of consumers is becoming an ever greater threat. The highly dangerous effects on consumers of fake medicines, cosmetics, surgical equipment, food, cigarettes, alcoholic drinks, vehicle and aircraft parts, etc. receives increasingly attention among policy makers in the past years.

Consequence 4: Non-prot Losses There are of course also losses from piracy that do not (directly) concern prots. Counterfeit copies of movies, for example, can degrade the reputation of the movie maker in the eyes of viewers who see those badly made copies.

Transition: However, despite the effort to eliminate piracy and counterfeiting at both national and international level, the phenomenon still has many supporters for nancial reasons or unawareness.

People always nd counterfeited products affordable The number of additional authorized copies that would be sold is not equal to the number of illegally duplicated copies. Pirates typically sell their wares at prices substantially discounted from street prices. In addition, some unauthorized copies are produced for noncommercial reasons (e.g., making a copy for a friend). There is a substantial difference between getting a copy for free from a friend and having to pay the street price; hence some of these copies would not be purchased if the consumer had to pay something approximating the street price.

Piracy improves competitiveness - the producer has to compete against the pirated version of its product. Therefore, the producer cannot put a potential maximum price on the product but has to opt for a price that would not induce too many consumers to switch over to the pirated version.

In conclusion Even though piracy has for more than 20 years been considered to be the biggest problem of industrial market, there are no visible signs indicating that it would disappear nor have any efficient efforts been made towards its abolishment. A possible economictheoretical reason behind the existence of piracy is the network effect characteristic Also, the users of either legal or illegal items are not interested in the abolishment of piracy, due to the network effect, piracy enhances the welfare of them all. By condoning it or turning a blind eye to the problem, we become accomplices to theft, extortion and murder. So dear parents and friends, time has come to make a change in our attitude. Like Gandhi said quote: you must be the change you wish to see in the world" Thank you all for your honorable attention!!!