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."
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.
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.
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.
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?[1].
Source: [1] http://news.bbc.co.uk/2/hi/uk_news/2924531.stm
