The introduction of the controversial SOPA (Stop Online Piracy Act) bill, followed by the subsequent discussions, online protests, and eventual striking down of the same, shone a bright light on an issue that most internet users hadn’t really seriously considered – How online piracy effects the economy.

This bill, had it passed, would have introduced harsh penalties for people who stream copyrighted content online without proper authorization. It would have also required internet service providers to completely block any access to websites that did not meet strict regulatory demands set forth by the governing bodies Furthermore, advertising networks as well as payment facilities would have been barred from conducting business with such websites. This was all in a bid to end online ‘piracy’.

Then the internet went wild with protests!

The fact that it was so vehemently opposed by so many internet users and lawmakers alike shows just how seriously we detest censorship. To many, this would have been tantamount to a civil right infringement of sorts. But once all the protests have died down and everything has gone back to an uneasy state of normalcy, you really must ask yourself: why did this bill come up in the first place? Is online piracy really that bad for the economy?

How online piracy effects the economy

On this kind of polarizing and controversial issue, there are going to be solid arguments from each side of the debate. Supporters of the SOPA/PIPA bills say that online piracy costs the national economy between $13-$250 billion each year. Obviously, this is a significant amount that could literally transform any nation into an economic powerhouse, should these funds be realized and put to great use.

But then the problem comes in where non-supporters claim that these figures are grossly inflated and that online piracy doesn’t quite affect the economy as negatively as the supporters would have you believe. In fact, if anything, piracy does, to some extent, help the economy by creating new, previously unreachable markets as well as jobs for the so-called pirates. They also claim that most of the people who pirate movies and music online would not have spent money on these products anyway, so where is the harm? They would, however, spend the money saved on something else thus creating a source of revenue for someone else, and that is good for the economy.

The truth of the matter is that online piracy does negatively affect the economy. Maybe not as grossly as the supporters would have you believe, but to some lesser extent, it does cause some harm. Here is how:

– Lost tax revenues from these sales would have gone to benefit local governments and communities
– Pirated software is not as well supported as legitimately acquired software. Any organization using this kind of software is vulnerable to malfunction and that could lead to lost production time
– Creatives who depend on this money to make a living could suffer economically due to piracy
– Adversely affected content production companies could be forced to lay off staff just to get by
– It eats into what would be CSR money. Many of these CSR projects focus on improving the quality of life which in turns promotes a healthier workforce

The overall argument here should be that theft is wrong and that online piracy negatively affects the economic wellbeing of the individual creatives whose works are pilfered without authorization. As much as piracy does negatively affect the national economy to some extent, the effects are not yet as clearly quantifiable as to merit a proper argument for the kind of censorship that these bills would have facilitated.