[LINK] Software Piracy Costs $40 billion a year

[Adam Todd]

Three interesting parts to this story.

1.  Chinese counterfeit Windows Vista
2.  Piracy issues
3.  Claims that 29% of software installed on computers in Australia 
is illegal and costs Software companies $622 million a year in losses 
($40 billion world wide.)

I say again, on the last point, of the 29% of pirate installations, 
if the software wasn't able to be pirated, the user would not have it 
at all and hence the user would not likely buy a copy, so it's hardly 
a "loss" as claimed by the BSAA.


http://www.smh.com.au/news/security/aussie-dobbers-help-smash-piracy-syndicate/2007/07/26/1185339135199.html



Aussie dobbers help smash piracy syndicate


High quality fakes ... a genuine version of Windows Vista, left, 
beside a counterfeit copy.
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Asher Moses
July 26, 2007 - 12:37PM

Australian whistleblowers helped Microsoft and the FBI bust a major 
Chinese counterfeit software syndicate, which was allegedly 
responsible for distributing more than $US2 billion worth of fake 
Microsoft software around the world.

Three hundred and fifty-two fake versions of Microsoft Windows and 
Office were reported to Microsoft by Australian individuals and 
businesses, most of whom bought the software from Australian computer 
stores believing it was genuine.

Microsoft Australia's director of intellectual property, Vanessa 
Hutley, said those 352 fakes were analysed by Microsoft and formed 
part of the evidence - totalling 55,000 counterfeit products 
worldwide - used to bring the syndicate down.

"The counterfeits are extremely high quality so they [customers] are 
not paying $1 or $2, they're paying close to the real price thinking 
they're getting a genuine product," she said.

Hutley said the investigation into the syndicate, based in the 
southern Chinese province of Guangdong, was one of the largest of its 
kind in the world and had been going on for years.

"This particular syndicate's material was detected as far back as 
2003, and this has been an ongoing, six-year, very very intensive 
investigation around the world - 27 countries were affected by these 
counterfeits," she said.

Rather than hunt software pirates on an individual basis, Hutley said 
Microsoft was focused on stopping piracy at its source, and would 
also educate individuals on the downsides of piracy.

According to Business Software Alliance figures released in May, 29 
per cent of software installed on PCs in Australia in 2006 was 
obtained illegally, amounting to $US622 million in losses to the industry.

But the piracy rate of 29 per cent was lower than the 2005 rate, 
which was 31 per cent.

Globally, software companies claim they lose $US40 billion a year to piracy.

But in addition to costing Microsoft money, Hutley warned that 
pirated versions of Windows also often contained "incomplete code" and malware.

The pirated Microsoft software found in the Chinese raids, conducted 
by the FBI and China's Public Security Bureau, included copies of 
Windows Vista, Microsoft Office 2007 and older versions of both products.

In a statement the FBI said it confiscated discs with an estimated 
retail value of $US500 million. Chinese police arrested 25 people and 
seized property worth about $US8 million.

"This case should serve as a wake-up call to counterfeiters," said 
Microsoft's senior vice president and general counsel, Brad Smith.

"Customers around the world are turning you in, governments and law 
enforcement have had enough, and private companies will act 
decisively to protect intellectual property."

The whistleblowers who bought counterfeit versions of Windows were 
able to detect the fakes using Microsoft's Windows Genuine Advantage 
anti-piracy tool, Hutley said.

Some then opted to submit physical copies of the discs to Microsoft 
for analysis, and Hutley said Microsoft was then able to trace the 
discs back to the counterfeit syndicate.

"We had 87 per cent of these CDs that we have here in Australia 
submitted to us by customers who had detected it was counterfeit 
because of Windows Genuine Advantage," she said.

In November last year Microsoft filed more than 50 lawsuits against 
merchants selling counterfeit software worldwide, including three in Australia.

Hutley said Microsoft offered free replacement copies of Windows to 
consumers who sent in counterfeit discs.