A private draft prepared by the Australian Institute of Criminology for the Attorney-General's Department says that piracy stats aren't backed up by fact and that copyright holders "failed to explain" how they came up with financial loss figures.

The draft questions whether the techniques used by copyright holders (record companies etc.) to determine piracy statistics are valid and if the data they come up with is accurate.

The Business Software Association, an international software body, claimed that in the year 2005 piracy in Australia cost them $361 million. The draft says these figures are “unverified and epistemologically unreliable.” It even goes so far as to call some of the stats used by copyright holders “absurd,” and adds that “of greatest concern is the potentially unqualified use of these statistics in courts of law.”

According to the draft, the RIAA’s Australian arm, the MIPI did not know how they calculated piracy stats, because the IPFI never told them. Strange? Maybe that’s just how things work with international organisations.

The reasoning behind the statements in the draft is that anti-piracy organisations calculate losses by counting each pirated good that is sold. They are making the assumption that each person who buys a pirated CD, for example, would have bought an original one instead. This cannot be backed up, as many of those people might not have been able to buy, or might not have bought the original CD.

The draft concluded with a statement asking for statistics that cannot be verified to be withdrawn. “Either these statistics must be withdrawn or the purveyors of these statistics must supply valid and transparent substantiation.”

The truth on the other hand: Why Most Artists Profit from Piracy!