The Cost of Cybercrime

Today the UK Government and information technologists Detica published a report on "The Cost of Cybercrime". The Report puts the annual cost to the UK economy of different sorts of Cybercrime at £27bn.

The largest component is IP theft, which is said to cost £9.2 billion per year. While it is good to see an attempt to raise awareness of the damage caused by illegal activity online, the figures in this brief document do raise some questions. In particular, when it splits out the losses from IP theft to different industries, the Report seems to indicate that losses to "Media" are negligible and those for "General retailers" are nil. Earlier research by IPSOS-MORI and others has indicated that losses to the audiovisual sector alone are in the £100s of millions: http://www.ukfilmcouncil.org.uk/copyrighttheft.

It is not clear whether the Report takes into account the contribution to UK GDP from Cybercrime. After all, a proportion of ISP profits come from broadband access subscribers whose Internet use is principally for infringement. Given that we have pretty clear data on the use of the Internet for infringement, it would not be too difficult to estimate the contribution to ISP profits from infringers.