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Last Updated:  Wednesday, 9 April, 2003, 10:18 GMT 11:18 UK
How cyber piracy affects you
Man putting a CD into a computer
Software piracy is booming
The temptation is great: simply copy a program to CD and hey presto, software for free. The perfect crime where Bill Gates is the only victim, right? Not quite - the implications could be closer to home than people expect.

"Copying software is so easy, of course I've done it," says Matthew, a London-based IT specialist. "That was in my undergraduate years - I didn't know anyone who bought the stuff legitimately.

"Someone would turn up and say 'give this a crack, it's the latest version' and it'd get passed around until it was obsolete. It was mostly office and spreadsheet programs, the kind of stuff you can download from the web now."

I bought a photo editing program last year - I wouldn't have been interested if I hadn't tried out a bootleg copy
After graduation, Matthew used a mix of licensed and copied software until 1998. "On holiday in Malaysia, I bought a copy of Microsoft's FrontPage from a guy at a dodgy market stall. For months it worked fine, but it turned out to be laced with the Chernobyl virus - it cost £600 to repair the damage."

His fingers well and truly burned - and his spending power far greater than in his student years - Matthew now only uses licensed software. "Not only do they work properly, I get all the technical support and upgrades I need.

"I think Microsoft and other big firms benefited from that early piracy by my generation. Yes we saved money, but we became much more computer literate and so are now regular customers. I bought a photo editing program last year - I wouldn't have been interested if I hadn't tried out a bootleg copy years ago."

Rip roaring trade

As Matthew discovered, illegal copies cost more than industry fat cats dear. New estimates find the industry is losing more than $10bn a year from pirated desktop software.

Piracy is at its most widespread in the Far East, where nine in 10 packages used are unlicensed copies, with Eastern Europe fast catching up.

THE COST TO THE UK
CD
2.4 million Britons are thought to have infringed copyright
Cutting the software piracy rate from 25% to 15% would mean:
40,000 jobs in the IT sector
Extra £2.5bn in tax revenues
Additional £10bn toward GDP
BSA figures
A "pirate" can range from a student with a recordable CD drive, to a home user who trawls the net for illegal software; from a company which buys one copy of a program then uses it on several computers, to a dealer selling counterfeit packages. Organised crime rings are partly funded by counterfeiting.

For software companies, piracy means lost revenue, which in turn means fewer jobs, scaled-back operations and less tax for the public purse.

For users, counterfeit software may be a false economy. The program may contain a virus or be incomplete; and the user will have no entitlement to future upgrades.

For businesses, there's the threat of legal action and hefty fines - Microsoft, for instance, has been criticised for tackling charities which bought copied software in good faith - and even professional embarrassment. Under a new EU directive, organisations caught out may have to apologise in print as well as face fines.

Special Branch officers in action in Manchester
Special Branch unwittingly bought a fake version of Office 97
Increasingly, innocent users are being "taken in" because of the difficulty of spotting counterfeit software. Victims have included Special Branch - the UK's anti-terrorism police - and Clackmannanshire Council in Scotland, which inadvertently bought fake product licences and had to pay £150,000 for new licences and legal costs.

In 2000 alone, the software industry in Europe lost $3bn to pirates. This is thought to be only a tiny fraction of the copying carried out every day on the internet.

The watchdog organisation, Business Software Alliance, says this is unacceptable for an industry that commits millions of pounds to research and development, and in recent years has contributed six times as much to Europe's GDP as the consumer goods industry.

"Because software is so valuable, and because computers make it easy to create an exact copy of a program in seconds, software piracy is widespread. Piracy exists in homes, schools, businesses and government," says a BSA spokesman.

Cheap and legal?

And it has shaped the nature of the industry. If Russia, for instance, cracked down on piracy, it would have more legitimate software companies. Instead it has become an enclave for pirated software.

PIRACY RATES
Far East: 92% of software is illegally copied
Eastern Europe: 67%
Western Europe: 37%
UK and North America: 25%
International Data Corporation figures for the BSA
If the pirates were stopped, it might just benefit the consumer. With more companies investing in new products, competition would increase and in turn prices could fall.

To this end, the EU and the UK Government have brought in tougher measures to curb copyright and trademark abuse. That's not to say these measures will be widely enforced. And as the EU expands, it takes time for new member countries to match its intellectual property laws.

The industry itself must help tackle the problem, says the Federation against Software Theft. Yet in the past, companies which made hard-to-copy software found sales suffered as users got fed up with the security measures involved.

The real challenge remains: how do you convince someone to pay £800 for a CD when they can easily pick up an exact copy for 80p?


Send us your comments:

If people do not want to use pirate software, but don't want to pay big licence fees, don't use Microsoft. Sun Microsystems do an office package called star, this will run all MS documents, has slightly less functions, but has all the ones that most people use. Sharewear is also available - it can be got free and legitimate to do most things. Linux is an alternative to MS and again is free. You don't have to pirate - just be imaginative and don't be afraid to try non-MS software. Just don't be cheap on virus protection software.
Damien Bové, England

If you're a student, or a struggling underpaid worker with children and a home loan, but you want to improve your IT skills to make yourself more employable, then how on earth can you afford the high price of software? Recently here in Malta, Microsoft have been selling XP home edition and XP office and visual basic for around £60 to school kids and students. Why? Because piracy is such a huge problem in this emerging economy, so invest in Malta and in return you get more respect for the big name companies in IT; less piracy because Microsoft now has a presence here and regularly audits business; and probably sooner rather than later, a culture where people by licensed software.
Paul Smith, Malta

Entitlement to 'upgrades' is really just a way of ensuring one never owns the software, one just rents it from (usually) Microsoft. Free software is reliable, effective, easy to install, and, obviously, free.
Victoria, UK

I write a website at home, purely for fun and I wanted to produce some PDF files for it. Did I go to Adobe and buy Acrobat for £220? Or did I look on the internet and find GhostScript, which can produce PDF files and can be downloaded free of charge? I will admit that in the past I used some pirated software rather than pay the exorbitant licence fees (this was back when I was a university student). But nowadays there's so much good quality free software out there that there's no real need to pirate.
Ed Chivers, United Kingdom

I agree that piracy costs software firms money, but Microsoft, for example, don't seem to suffer. I believe that the high cost of Office used to be explained as including an element to cover losses due to piracy; yet when Office became difficult to copy, the price didn't drop. Perhaps making software affordable would encourage people to do the 'right thing'?
Peter, UK

There's little incentive to feel guilty about piracy when expensive commercial software may cause unwanted side effects and perform below its specification. If cars or consumer applicances, for example, failed to meet specifications, people would not put up with it. The software industry needs to address its own quality issues first.
Gavin, England

Software piracy is theft, pure and simple. As a software developer I know this and if it was my work being stolen I know how I'd feel about it. However I look at the prices of some software packages, that increasingly in this day and age are not luxuries for business use but necessities, and the size of some companies' profit margins and business tactics - and then I wonder if maybe the theft isn't on both sides.
Sam, UK

Software piracy deprives them of a potential sale - but ONLY if you would have bought it anyway. Many people pirate software becuase they could not afford to buy it (in the Far East, for instance). Microsoft knows this, and knows that piracy brings their products to an audience that would otherwise use alternatives (Linux, for example). Microsoft would much rather people used pirated MS software than legally obtained rivals - Bill Gates admitted as much in the early days. In a perverse way, piracy strengthens Microsoft's world monopoly.
Jim, UK

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SEE ALSO:
The high price of piracy
03 Apr 03  |  Technology
Software pirates target Scotland
28 Jun 02  |  Scotland
Hunting down the pirates
13 Dec 01  |  Science/Nature


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