Bootlegging

The Grey Market in NYC

Bootleg Products

• Handbags• Apparel• Jewelry • Fragrances• DVD’s / CD’s• Electronics• Batteries• Auto and airplane parts• Steroid creams• Prescription Medication• Consumer Staples

Experiencing …

• Do you buy bootleg products?Yes No

• If you answered yes to the question above, how often do you buy bootleg products?

1-2 Times per Week

3-4 Times per Week

1-2 Times per Month

3-4 Times per Month

1-2 Times per Year

3-4 Times per Year

5-6 Times per Year

7-8 Times per Year

9-10 Times per Year

72%

28%

3%

6%

28%

6%

22%14%

11%

6%

6%

• Do you feel harassed by vendors?

Yes No

• When you go out, how often do you get approached by these vendors?

Not at All Somewhat Often Often

What is the quality of the products you buy?Poor Fair Good Very Good

Would you repurchase the bootleg products you once bought if they broke?Yes No

6% 33% 47% 14%

31% 69%

46% 54%

8% 72% 20%

Why are Bootleg Products a Problem in New York City???

• Economic - Hurts Business

• Political - Non- enforced laws

• Cultural - Downgrades social aspect/ view of our society

• Social - Harassed by vendors.

Economics• Businesses

– Revenues• Real Vuitton Cherry Wristlet: $355; Fab Fake:$20 (6% of retail price.)• Real Prada: $1,095; Fab Fake:$40 (4% of retail price.)• Real Vuitton Wallet: $535; Fab Fake:$10 (2% of retail price.)• Real Gucci: $1,350; Fab Fake:$30 (3% of retail price.)• Real Vuitton MM Bag: $905; Fab Fake:$40 (5% of retail price.)

– $23 Billion Counterfeiting Industry in NYC – 2004– 2005 Total Global Losses to United States companies

$30-$35 billion

– 750,000 American jobs lost- 2005.• Taxation

– 1994 - Mark Green – NYC Commissioner of Consumer Affairs - $350 million in

unpaid taxes. – 2003- $1.03 in lost tax revenue

• $380 Million in sales taxes ( Consumer)• $290 Million Business Income Taxes (Businesses)• $360 Million Personal Income Taxes (Vendors)

• INTERPOL – The International Criminal Police Organization - Warning – Terrorism– Al-Qaeda– Hizbullah (Hezbollah)– Chechen separatists– Ethnic Albanian extremists in Kosovo– Paramilitaries in Northern Ireland

Primary goal of any business should be the wellbeing of the human person not the

pursuit of profit!

Profit is necessary but profit is a means to an end, not an end in itself!

Economy should serve people not the other way around!

Humans are social creatures and that we have a moral obligation to build a society that provides the greatest opportunity for benefit for the greatest number of people possible.

“A firm preserving determination to commit oneself to the common good”

Solidarity is essential to any Catholic Business ethic because it incorporates the CST principles.

“ Commitment to the common good.”

In a democracy Government is a means by which we can act together to protect what is important to us & to promote our common values.

What’s being done????

• Penalties– Minimum 15 days; Maximum 15

years.– Minimum $250 to Maximum of

$2,250,000 or twice their gains, or twice the loss to the public and, the forfeiture of their illicit proceeds.

– Proposed Law: Minimum 6 months to imprisonment with 4 years per felony and a minimum of $10,000. (For bringing a camcorder into a movie theater.)

• Software and Industry Association (SIIA)• International Anti-Counterfeiting Coalition

(IACC)• Business Software Alliance (BSA)• Intellectual Property Organization (WIPO)• World Copyright Treaty (WCT)• WIPO Performances and Phonograms

Treaty (WPPT)• Trade-related Aspects of Intellectual

Property Rights (TRIPS)

– Impose penalties on consumers that willing buy bootleg products.

– Landlords should incur violations on their properties if this type of activity is performed on their premises.

– Law enforcement agencies have to recognize that intellectual property crime is not a victimless crime. Cross-border investigations may be a solution!

Law Enforcement, Public Awareness, and Business

Cooperation• Create a force which include members from the New Create a force which include members from the New

York State (NYSP, New York City and the Federal York State (NYSP, New York City and the Federal government (FBI) patrolling agencies. government (FBI) patrolling agencies. – Get funding from the Federal and State governments to Get funding from the Federal and State governments to

support enforcement of the existing laws. support enforcement of the existing laws.

• Increase public awareness and educate consumers Increase public awareness and educate consumers so they know when they are buying from legitimate so they know when they are buying from legitimate street vendors. street vendors.

• Businesses (Industries) should help each other out Businesses (Industries) should help each other out when it comes to anti-piracy practices.when it comes to anti-piracy practices.

No Clowning Around

• Recognize the issue. Think about the issue. See the issue in your future.– 72% purchase bootleg

products– Increase in bootleg sales

(1994-2003).– Dead business? How about

yours? Unemployment!

• Put some feeling into the issue and make the connections.– Extreme organization groups.