Merriam-Websters Collegiate Dictionary defines piracy as, an act of robbery on the high seas or an act resembling such robbery (885).
From this we can define software piracy as an act of robbery on the information superhighway. Many people do not see it as such. Even though the average person would never consider going into a convenience store and stealing a stick of gum, many have no qualms about stealing thousands of dollars worth of software. In a study done by the Canadian Alliance Against Software Theft, 43 percent of adult Canadians who were asked thought that pirating software for personal use was OK. This feeling has come about in several ways.
Older computer users, with Unix backgrounds, remember many of the applications they used as freeware. Software pirating also results from users having access to freely downloadable applications, evaluation copies, and public betas. This leads users to believe that all software is free. While many downloadable applications carry expiration dates, many companies rely on nag messages rather then a disabling mechanism. These messages are easily ignored and allow the user to continue use of the product (Stevenson 18).
Despite these factors global software piracy rates are on the decline. However, the number of illegal applications installed continues to grow, according to the business software Alliance (BSA) and the Software and Information Industry Association (SIIA).
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In 1998, 38 percent of applications in use globally were pirated, down from 49 percent in 1994. Yet, 231 million business software applications installed were pirated, 2.5 million more than in 1997. This led to an eleven billion dollar loss in revenue by software companies (Paquet).
Jason Penchoff, a BSA spokesperson, states, Software piracy affects company productivity and jobs. For every free package or unlicensed package of software, companies are losing money. If an automaker lost 38 percent of its revenue, there would be a huge outcry (qtd.
in).
So how are users obtaining all this illegal software? Consumers now have the ability to purchase goods from their computer. Generally when we think of electronic commerce, we mostly think of business to consumer transactions. But one of the most rapidly growing developments in electronic commerce is the consumer-to-consumer market. The rapid growth of Internet auction sites has created shopping opportunities for online consumers that were never before available. According to SIIAs Piracy on Internet Auction Sites, consumer-to-consumer online auction revenue will climb from $4 billion in 1999 to more than $15 billion in 2004 (3).
This has created a new opportunity for rampant software piracy. Through these auction sites, such as Amazon, eBay, MSNBC Auctions, Yahoo and others, software pirates are establishing a large customer base among often unsuspecting individuals. In order to determine how bad of a problem this was, SIIA initiated its first investigation into online auction sites in 1999.
The investigation showed that 60 percent of software being sold online was illegal. In the spring of 2000 a similar investigation showed that the number had risen to 91 percent (4).
Clearly software pirates have recognized these auctions as an easy, cheep, and relatively anonymous place to sell illegal software. For the price of a recordable CD-ROM, which is usually les than a dollar, the software pirate can make a copy of an application that is then sold for around $40. High profit combined with the low-risk of being reported by unwitting consumers, has made auction sites a haven for software piracy. The SIIA received one email from a pirate who bragged, 114 orders last week alone (qtd.
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At $39 profit per CD, this amounts to over $4400 dollars in just one week. Attempts to remove these pirates often prove feudal, as the seller will often just change their screen name or auction description (4).
Another way that software pirates are attempting to distribute software is auction site stalking. In this scenario, the software pirate contacts several individuals who have bid on an item, and then offers the same software for a lesser price. Just by bidding on items, consumers can expose themselves to spam emails from software pirates (6).
The SIIA has the following to say about the role the Internet plays in software piracy: While the Internet offers users access to a wealth of goods and services that they have never before enjoyed, it is being exploited by criminals and subjecting honest user to new manners of fraud. The ascendance of Internet piracy across online auction sites highlights the pitfalls that many consumers unknowingly face in the C2C [consumer to consumer] space (10).
Along with organizations like the BSA and SIIA, software companies are doing their part in an attempt to cut down on the sail of pirated software. In August of last year, Microsoft launched the first phase of its global campaign against software piracy.
It has seen the seizure of nearly five million copies of pirated Microsoft software. The company also has demanded the removal of 38,000 web sites, which it accused of selling illegal Microsoft software. While speaking with Computer Weekly, Julia Phillpot, anitpiracy manager for Microsoft UK, warned companies to beware of resellers offering what appears to be legitimate software at extremely low prices. (Thomas 3).
She also had a message for companies that knowingly use pirated software, It is not worth the risk. If we catch them we will often ask for damages that far exceed the amount they would have paid for the software in the first place (qtd.
in 4).
Since January 2000, Microsoft has been awarded over $17.5 million in settlements on piracy cases (4).
One step that Microsoft has taken is being seen by some as a scare tactic. Many small companies have received a letter from Microsofts licensing compliance manager. Included was a newspaper clipping about a company that paid a large fine for illegal use of software after a BSA raid. The letter went on to say that many companies can, unwittingly find themselves faced with penalties because they didnt realize that they werent compliant. We want to make sure this doesnt happen to you (qtd.
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in Foster 71).
Many business owners that receive this letter believe that Microsoft suspects them of piracy. One owner stated, [t]his kind of letter is disgusting and the kind of thing I would expect from a two-bit porno outfit or stock market scammer. A multibillion dollar company ought to do better (qtd. in).
Microsoft, on the other hand, claims that this is just part of an awareness campaign and they are not trying to scare anyone.
According to their studies though, one in four small businesses are using illegal software (71).
The notion that everybody does it and no one will find out is becoming less and less true. In a recent case three men were sentenced to a total of ten years in prison for their involvement in a multimillion-pound software-counterfeiting scheme. The men, all from London, were convicted for conspiracy to defraud Microsoft (Brown 6).
The judge in the case stated they had all been involved in, a careful and sophisticated fraud that struck at the route of commercial trust and probity (qtd. in).
In a second case the BSA announced an out-of-court settlement with the Manhattan Institute of Information, following a raid that revealed the institute was using unlicensed Microsoft software.
The settlement included the payment of court costs and the placing of apology ads in two major newspapers (Kimmel 63).
In yet another case, the SIIA and an alleged software pirate settled out of court for an undisclosed amount. The individual was also forced to turn over the names of all the individuals that had been sold software. The SIIA is contemplating filing suit against the pirates customers as well. (McGuire 13).
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Microsoft Anti-Trust Case In 1890, Congress passed the Sherman Anti-Trust Act. Since then there has been very few companies that have violated this act. In 1911 it was used it to break J.D. Rockefeller’s Standard Oil trust in to 30 different competing companies. Then in 1982 AT&T’s monopoly was broken up in what has been called the biggest anti-trust case to date. Now Microsoft has been ...
As long as there are computers and the Internet, software piracy will continue to occur.
Companies like Microsoft are forced to spend money combating pirates, which intern causes higher software prices and fewer jobs in the software industry. If this is to come to a stop we must do our part by only using officially licensed software and reporting software pirates to agencies like the BSA and SIIA. In the long run it will save consumers money, and maybe keep them out of jail. Works Cited Brown, T. Microsoft Pirates Jailed for 10 Years. Computer Weekly 12 April 2001: 6.
Foster, Ed. Are Microsofts Scare Tactics Intended to Disturb Businesses Mr. Littles?. InfoWorld. 22 Jan 2001: 71. Kimmel, John.
BSA Offers Reward for Software Piracy. InfoWorld 28 Dec. 2000: 63 McGuire, David. Software Watchdogs Settle Piracy Suit; Vow to Keep Up Hunt InfoWorld 9 Feb. 2001: 13. Mish, Frederick C., ed.
Merriam-Websters Collegiate Dictionary. Springfield: Merriam-Webster, Incorporated, 1999. Paquet, Cheri. Software Pirates Go Slow. PCWorld.Com 28 May 1999. 5 May 2001 .
Stevenson, V. Protecting Yourself From Pirates. Network World 13 April 1998: 18 Thomas, Daniel. Microsoft Steps Up Piracy War. Computer Weekly 5 April 2001: 3 Piracy on Internet Auction Sites. Washington D.C.: Software & Information Industry Association, 2001..
