Four Things Americans Have Learned from the SOPA Fight

Among the lessons learned: It's next to impossible to determine how much piracy hurts the economy

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Can't easily look up the major exports of Luxembourg today? Can't find enough hilarious animated .gifs to while away your downtime at work? Wikipedia and reddit, along with a host of other sites are down today in what is being called the largest online protest in history. The sites are protesting the Stop Online Piracy Act (SOPA), a House bill aimed at eliminating music and movie piracy on the Internet, and its Senate counterpart, the Protect IP Act (PIPA).

The bills are aimed at curbing online piracy on foreign websites that are outside U.S. jurisdiction, but many Internet giants have expressed worries that the acts would result in major compliance problems, even censorship.

[See pictures of sites protesting SOPA.]

SOPA opponents have already scored one small victory; Texas Republican Rep. Lamar Smith, who introduced SOPA, has said he will remove one of the bill's most controversial components about blocking certain websites.

Still, the fight against piracy will no doubt continue, with the nation better informed about what is at stake. These are four new things we've all learned from the SOPA/PIPA fight.

[Read about Pres. Obama's plans to merge 6 agencies.]

Piracy Can Have Economic Benefits (the Government Said So)

According to an April 2010 GAO report, piracy could give a creative industry "increased sales of legitimate goods based on consumer sampling of pirated goods." Or, in plain English, downloading a pirated Beatles song might inspire a consumer to buy the entire White Album.

"I don't necessarily quibble with that," says Jonathan Lamy, senior vice president of communications at the Recording Industry Association of America, but he doesn't buy the argument altogether, either. "I think that type of behavior is far outweighed by the more likely outcome—that is, your ability to download an entire collection [for free] with the click of a mouse."

That GAO report also notes that piracy can mean more money for consumers to spend elsewhere.

Consumers that have purchased counterfeit goods "have extra disposable income from purchasing less expensive goods"—income that "goes back to the U.S. economy, as consumers can spend it on other goods and services."

...But it's Still Bad (Even Though No One Can Quantify It)

Plenty of estimates have been thrown around estimating piracy's economic effects. In a December 2011 press release, the Motion Picture Association of America cited a study saying that $58 billion is annually lost by the U.S. economy due to content theft, including more than 373,000 lost American jobs." The truth is estimating exactly how much piracy hurts the economy is a daunting task. In a blog post earlier this month, Cato Institute Research Fellow Julian Sanchez dissected many of the numbers cited by SOPA proponents and found them lacking.

Indeed, the aforementioned GAO report noted that while the problem of piracy is "sizeable," "it is difficult, if not impossible, to quantify the net effect of counterfeiting and piracy on the economy as a whole."

First, there is little way of knowing exactly how much pirated material is out there. Downloading a song once illegally can mean multiple "thefts," as the song is passed from one person to another.

In addition, there is no way of knowing consumers' spending behavior without the availability of pirated material. A person might download a pirated Season 2 of Glee, but that doesn't mean he would have otherwise purchased the boxed set in a store. But that same person might illegally download a Katy Perry song he would otherwise buy. Pinning down the value of those songs and movies to any consumer is impossible.

[Debate Club: Should Congress Pass Anti-Piracy Legislation?]

The Meaning of the Phrase "Collateral Damage"

SOPA and PIPA may be well-intended, aimed at protecting creative industries from theft. But even if these pieces of legislation were able to prevent piracy—and there is much debate over whether that is in fact true—opponents of the legislation say that SOPA and PIPA could result in far greater problems.