Microsoft exults at success in pulverizing piracy

The company outlined more than 400 law-enforcement efforts in 49 countries on six continents around the world to prevent the piracy or counterfeiting of its software products. Microsoft is calling Tuesday “Global Anti-Piracy Day” to laud the efforts.

Calling the efforts a “diversity of enforcement,” Microsoft General Counsel for Worldwide Antipiracy and Anticounterfeiting David Finn said that the company has “never been so involved with so many countries doing so many things” to combat software piracy and counterfeiting.

Law-enforcement efforts to crack down against sustained criminal activity to pirate and counterfeit its software and then resell it for profit has been a pet project of Microsoft’s for some time.

Indeed, Finn said some of the cases the company is unveiling Tuesday are the product of at least five years if not more years of effort.

“This kind of coordinated effort doesn’t happen in minutes,” he said. “It really is a lot of work.”

Countries as diverse as Argentina, Australia, Kuwait, Nigeria and Pakistan are all regions where Microsoft has been working with law-enforcement efforts to prosecute people for software piracy and counterfeiting.

A list of all of the cases the company is unveiling Tuesday is on Microsoft’s Web site.

In Canada, Microsoft’s anti-piracy initiatives run the gamut from awareness generation to legal proceedings against culpable parties.

For instance, earlier this year the company instituted legal action against three Canadian system builders, whom it accused of hard disk loading.

Hard disk loading is the practice of installing unlicensed copies of software onto a new PC before it is sold, or providing buyers with counterfeit certificates of authenticity.

This legal action represents the enforcement arm of Microsoft’s three-pronged approach to combating software piracy, said Michael Hilliard, corporate counsel for Microsoft Canada. The other two arms are engineering improvements to the product and education.

Hilliard says software piracy is a real problem that all Canadian businesses need to address.

He cited a 2007 Business Software Alliance (BSA) estimate that pegged losses to the Canadian economy in 2006 due to software piracy at a whopping $890 million.

That report also showed Canada’s software piracy rate to be 34 per cent, which was slightly below the world rate of 35 per cent.

An IDC report estimates that reducing software piracy by just 10 per cent could add 5,200 new jobs, $875 million in tax revenues, and $2.7 billion in economic growth to the Canadian economy.

With education, Warren believes, young people will begin to realize that piracy hurts real people, and not just a faceless corporation.

Hilliard also maintains education is an essential tool in the fight against piracy.

He outlined various programs Microsoft offers, such as Windows Genuine Advantage, to let consumers verify the authenticity of installed software.

The Microsoft Web site also offers numerous anti-piracy resources along with tips to help ensure that software is genuine.
“The challenge,” stated Hilliard, “is for companies, such as Microsoft, to demonstrate the value of intangible assets.

Overseas, cases Microsoft is going public with include the successful prosecution and sentencing of two people in China who sold customers unlicensed software by forging Microsoft Open Licenses, according to Finn.

Each of the defendants received a sentence of six months in prison by the Nanning Quingxiu Peoples Court on Oct. 7.

Another case in Japan is the most significant criminal prosecution Microsoft has seen in that country around this kind of fraud, Finn said. Microsoft Japan this month filed criminal action against an alleged software pirate accused of selling counterfeit versions of Windows XP online that possibly affected 50,000 sales, he said.

One of the results of Microsoft’s years of effort to crack down on software piracy and counterfeiting is an automated software validation system first revealed in 2005 called Windows Genuine Advantage (WGA).

WGA started as an update for Windows XP but then was built into Windows Vista. It raised ire in its early days for bugs that would identify people’s genuine copies of Windows as counterfeit or pirated, but Microsoft seems to have smoothed out the process since then.

Though it’s just one of many tactics Microsoft is using to crack down on piracy and counterfeiting, the software-validation system has been instrumental in finding and prosecuting people around the world for criminal activity around its software, Finn said.

Another strategy the company and local authorities have used include sending investigators to make test purchases of software

Open-source proponents who advocate that software should be free from proprietary software licensing restrictions have criticized Microsoft for waging such a relentless legal fight against piracy and counterfeiting. However, Finn said the cases Microsoft is prosecuting around the world are typically not against individuals who may make a copy of Windows or Office and pass it on to their friends.

“We’re talking about organized criminal syndicates who earn millions and millions of dollars by defrauding people all over the world,” he said, adding that often the software they sell to unsuspecting buyers also contains malicious code.

The cases Microsoft and law-enforcement agencies pursue also are against people who cheat individuals and Microsoft partners that resell products legally, Finn said.

Microsoft Canada’s corporate counsel, Hilliard also maintains education is an essential tool in the fight against piracy.
He outlined various programs Microsoft offers, such as Windows Genuine Advantage, to let consumers verify the authenticity of installed software.

The Microsoft Web site also offers numerous anti-piracy resources along with tips to help ensure that software is genuine.

“We have to demonstrate the value and respect that should be given to intellectual property and intellectual property rights, particularly to young people,” stated Hilliard,

Another Canadian commentator, however, says there’s more to the issue of piracy than software behemoths would have you believe.

G. Elijah Dann, who has taught business ethics and philosophy courses at the University of Toronto, says software piracy loss figures trotted out are sometimes exaggerated – but even if not, they raise a broader issue.

“If software companies are able to withstand such huge losses [caused by] piracy, then how much profit are they making in the first place?”

Dann argues that corporations often think they can treat ethics like a buffet.

“They go to the ‘ethical buffet’ and pick and choose what they like that’s in their interests. But when people on the other side of the buffet do things that affect them, they ignore their claims. My challenge to them would be, if you want to talk ethics, move away from the buffet table and sit down with the broader community in which you live and talk about corporate ethics with all stakeholders.”   

Dann says broader issues of economic justice should be considered, he says.

For example, the high cost of software gives students from richer families an economic advantage over poorer ones.

With files from Warren Lee and Rosie Lombardi.

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