Organized crime groups in Taiwan, the former Soviet Union and Paraguay are pirating music, movies and video games and selling them in the US and other countries, a Justice Department official told Congress.
"Piracy is now big business: a worldwide, multibillion dollar illicit economy which robs legitimate industries and creators of income, while driving up costs for consumers," John Malcolm, a deputy assistant attorney general, told the House Judiciary subcommittee on courts.
Congress is looking into illegal sales of CDs and DVDs at a time when the spread of digital technology has spawned new forms of piracy. For example, pirated copies of the latest James Bond film, Die Another Day, were sold in every large Asian market last November, two months before the film's release in Asian theaters, Jack Valenti, president of the Motion Picture Association of America, told the House panel.
Counterfeiting and piracy costs the software and entertainment industries US$200 billion a year, according to the International AntiCounterfeiting Coalition Inc, representing trademark owners such as Walt Disney Co and AOL Time Warner Inc.
Software piracy alone costs US companies US$11 billion a year in lost revenue, Richard LaMagna of Microsoft Corp said on Thursday.
Taiwanese gangs own plants in Malaysia and other Asian countries that make millions of pirated discs and ship them through Paraguay into Latin America, Malcolm said. Taiwanese gang members in the US also import "massive amounts" of counterfeit software and computer chips, he said.
Next month the US publishes its Special 301 Priority Watch List, on which Taiwan will likely be included, of countries that it believes are failing to protect intellectual property rights.
Taiwan says it has made progress in cracking down on pirates, with a 220-strong anti-piracy task force seizing 20 percent more counterfeit products last year than the year before.
But a report by the US Trade Representative Office earlier this month said that piracy remained "at a very high level."
"Minimal progress was made in strengthening its intellectual property rights protection regime during the past year," it said.
In the former Soviet Union, crime groups run 26 plants that make 300 million CDs and DVDs a year, Valenti said. They sell the discs throughout Western and Eastern Europe.
"Russia is totally out of control at this time," he said.
US companies' sales to Western Europe, their most profitable international market, could be "demolished by these pirated imports from Russia," Valenti said.
He said he has scheduled a meeting with Russian President Vladimir Putin to address the piracy issue.
Crime groups also make CDs and DVDs in Pakistan, Thailand, the Philippines, Indonesia, Ukraine and Bangladesh, he said.
AOL Time Warner, Sony Corp, Viacom Inc and dozens of other media companies formed a new association on Thursday to urge the US to do a better job of protecting movies, songs and software from piracy.
"Protection of intellectual property rights is our top public policy priority," said Robert Kimmitt, executive vice president of AOL Time Warner, at a press conference to announce the organization's formation.
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