02 September 2010

The Truth about Fakes (and Piracy)

Here's a fascinating item:

A new EU-funded report has declared that it is OK to buy fake designer goods.

The study, co-written by a Home Office adviser, says consumers benefit from the market for knock-off designer clothes at knock-down prices.

It also rejects the complaints of designer companies, claiming that losses to the industry as a result of counterfeiting are vastly exaggerated – because most of those who buy fakes would never pay for the real thing – and finding that the rip-off goods can actually promote their brands.

The report adds that the police should not waste their time trying to stop the bootleggers.

It disputes claims that the counterfeiting of luxury brands is funding terrorism and organised crime, and argues there is little public appetite for tough law enforcement measures as consumers enjoy the bargains offered by the illegal trade, which has been estimated to be worth £1.3 billion in the UK.

Professor David Wall, who co-authored the report and advises the government on crime, said the real cost to the industry from counterfeiting could be one-fifth of previously calculated figures.

There are a number of interesting points here.

First, is the obvious one of what the research claims about the difference between the real threat of fakes and the, er, fake threat that the industry likes to proclaim.

Secondly, there is the similarity between what is going on here and what the content industries claim about the extent and damage of piracy.

But in many ways the most striking thing about this story, which effectively declares fake goods to be socially acceptable these days, is its provenance. It appeared not in some lefty rag, but in the The Daily Telegaph, not known for its whacky, pinko leanings.

My reading of this is that whatever the industries concerned might say about how awful, deceptive and damaging fakes and piracy are to the economy, ordinary people - and the newspapers that try to mirror their views - know that the true picture is rather different. It also means that ACTA is even more wrong-headed than even I thought.

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PV said...

Wow. This truly is a watershed moment in terms of how people view piracy and counterfeiting. The thing is, counterfeiting can actually be dangerous because its quality is unknown (especially when it comes to things like medicines); with piracy, there is no actual loss in the quality of the product. It's good to see that the mainstream media recognizes distribution of copies as an effective promotion tool (as opposed to a crime tantamount to a thousand thefts).
a Linux Mint user since 2009 May 1

Glyn Moody said...

@PV: yes, counterfeit medicines can certainly be a problem, as can other areas where health and safety is an issue.

Anonymous said...

Someone who buys a knockoff designer handbag from a sidewalk vendor is clearly not being misled about the authenticity of the goods but he may still be misled about the quality.
Its always been true that the financial claims of counterfeit goods being seized were inflated. Its the same way with drug seizures at the TV news statements about "street value". Some of those dealers would sure like to have found that particular street! Seizing a bolt of smuggled cotton fabric is fine but it shouldn't be valued as if it was destined to become a Christine Dior gown when in fact it might well have been destined to have become cotton rags.

The problem arises when the product involved is no longer a foolish fashion accessory but is instead an airliner part or a pharmaceutical product.

What are you going to do then? Go out and start up an intellectual property enforcement program after the airliner has crashed? The countries that permit the manufacture of knock-off handbags have the same attitudes toward handbags as toward airliner parts.

Glyn Moody said...

Yes, the point about health and safety is a good one. Indeed, I think that's the way forward here: fake in themselves aren't a problem - it's fakes that are dangerous. For aircraft parts, that's probably most of them...

That's the issue that needs addressing.

guy said...

I'd be curious to know whether anyone actually does produce 'fake' aircraft components. Is there a market? Surely not. Who would buy them?

The reason for the existence of fake 'designer' handbags is the entirely artificial scarcity that their brands create that inflates their price far beyond their cost of production.

The whole argument about counterfeit goods funding crime and terrorism is bogus not because of the products themselves are counterfeit. Its the illegality of their sale that causes the problem since it inflates prices and attracts existing criminals to a lucrative market. Just like drugs.

Clearly we need a 'war on handbags' to stamp out this breeding ground for crime.