World Economy

Counterfeiters, Hackers Cost US $600b

Including Hong Kong, China accounts for 87% of counterfeit goods seized entering the United States.Including Hong Kong, China accounts for 87% of counterfeit goods seized entering the United States.

Counterfeit goods, software piracy and the theft of trade secrets cost the American economy as much as $600 billion a year, a private watchdog says.

In a report out Monday, the Commission on the Theft of American Intellectual Property says the annual losses range from about $225 billion to $600 billion. The theft of trade secrets alone costs the United States between $180 billion and $540 billion annually. Counterfeit goods cost the United States $29 billion to $41 billion annually; pirated software costs an additional $18 billion a year, AP reported.

The findings echo those of the Office of the Director of National Intelligence, which in 2015 pegged the annual cost of economic espionage by computer hacking at $400 billion.

The commission labels China the world’s No. 1 culprit. Including Hong Kong, China accounts for 87% of counterfeit goods seized entering the United States. The report says the Chinese government encourages intellectual property theft.

The commission is led by former Republican presidential candidate and Utah Gov. Jon Huntsman, who also served as US ambassador to China, and Adm. Dennis Blair, a former director of US national intelligence.

“The vast, illicit transfer of American innovation is one of the most significant economic issues impacting US competitiveness that the nation has not fully addressed,” Huntsman said. “It looks to be, or must be, a top priority of the new administration.”

Meanwhile, Microsoft’s new Digital Crimes Unit has started an initiative to identify and take action against those selling counterfeit software in online marketplaces or e-commerce sites in Indonesia. This action is expected to minimize the cyber security danger of using counterfeit software for consumers and businesses.

As a result of an initial wave of legal actions, some online vendors have admitted providing counterfeit Microsoft software and/or illegal product keys. This month, Suryabaru IT in Surabaya, Room 56 in Jakarta and Inotech in Bandung–as well as offline shops such as ASEAN Notebook and Ruphen Shop in Jakarta–have published apologies through several media outlets such as Bisnis Indonesia, Pikiran Rakyat, Jawa Pos and They admitted that the software they had been selling might contain dangerous malware that could allow hackers to steal private information from the buyers’ computers.

The level of counterfeiting, including of software, in Indonesia is still alarming. A recent study by Masyarakat Indonesia Anti-Pemalsuan and the faculty of economics at the University of Indonesia listed printer ink (49.4%), clothing (38.9%), leather goods (37.2%) and software (33.5%) as the goods with the highest incidence of counterfeiting in Indonesia.

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