Tuesday, May 16, 2006

Traveling Pirates

MPAA claims to be losing billions, but its figures, in comparison to other amounts of money lost thanks to the internet - this time to public coffers - don't stack up as being so big after all. Online travel firms cost some cities 1/3 as much per person, as the MPAA claims it lost to 'piracy'.

I know this subject was only just talked about, here but in the last two days, I saw two stories involving the internet and public money that caught my eye. The first was that the prosecution of 6 men for 'internet piracy' cost the UK taxpayer £18.4 Million ($34.3M) in legal aid fees, and another £750,000 (roughly $1.4M) for the cost of prosecution. This was, the court case stemming from what is known as "Operation Blossom". Admittedly, this case was in the 2004-2005 judicial cycle, but was brought up in a letter between two Labour MPs.

Meanwhile, another story that hit my eye was concerning online travel firms in the US, and how they're doing cities out of tax. A federal suit filed by the city of San Antonio (thats in Texas) claims online hotel booking agencies, including Expedia and Travelocity, has, according to city lawyer Michael Bernard, "shorted the city about $10 million (£5.36M) since 1999." Nor is San Antonio alone in this as Los Angeles and my second favourite US city, Atlanta, are amongst other cities filing similar suits.

An important thing to remember is that in these two cases, it's not a company that's lost money, its the people living there. Additionaly, the amounts are real, calculable, and are being produced with records for, or by, court, whereas the MPAA's loss figure is an estimation in a study it itself paid for, where an inflated figure is beneficial. All 3 cases show ways in which people are (allegedly in some cases) losing money thanks to the internet. The question is, just how much is everyone losing?

If we look at it as amount lost per citizen, we get some very surprising results. Of course, we also have to remeber that the $10M San Antonion amount is over the last 6 years. (pop figures from CIA world factbook and US census data 2000)

Table of losses expressed per-person

Anyone else notice that online travel are apparantly duping San Antonians for 1/3 as much as the MPAA losing, per person, per year. how many stories have you seen on the hotel tax evasion? How many people sued, threatened, homes raided over it? Anyone predicting the end of the world unless it stops, and lobbying for new laws to make sure it does? To the people of San Antonio, its a large lump of change, but they're not pressuring anyone to have their rights revoked. As for the UK, £18M is about the estimated annual running costs for the New Law hospital (source) - a brand new fully equipped hospital in Scotland.

When you think about who is losing what money, do the unsubstantiated (alnd almost certainly inflated) figures put out by the MPAA seem that bad? Lets be glad the cities lawyers have kept their head and common sense, and not thrown acusations about, sent threatening letters, letters to expedia's hosts full of false and unsubstantiated claims. Good to see some people can use the law in an internet related case, and not act like a scene from Monty Python.

Ben jones

External links
San Antonio sues
Operation Blossom costs
Exchange rate used £1 = $1.86432

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