Is Microsoft battering China's piracy problem, or is it just another marketing ploy?

Is Microsoft battering China's piracy problem, or is it just another marketing ploy?

Summary: Microsoft won a copyright case against two Chinese companies, but was it because of Microsoft’s resolution to fight piracy in China, or just one of the tricks to boost sales in the country?

TOPICS: China, Microsoft, Piracy

Microsoft recently won a case in a Beijing court against two Chinese high-tech companies for infringing the copyright of Windows, Office, and SQL Server products. Microsoft received CN¥3.18 million ($510,000) in compensation.

But one analyst believes it may be a marketing ploy in order to sell more Microsoft-branded products in the country, known to be a piracy powerhouse. 

According to Microsoft's charges, the two Chinese companies, Mainone Zhida Technology Ltd. and Mainone IT Ltd., both under the Mainone Group, had been copying, installing, and selling copyrighted Microsoft software and were asked as early as 2011 by the software giant to take actions and stop infringing its rights. 

After nine months of vain attempts to get a satisfactory response, Microsoft filed an lawsuit to a Beijing against the two companies.

"Mainone's actions were not only serious copyright infringing to Microsoft, they also put customers' safety at stake," said Microsoft China's chief legal officer Tim Cranton to a local newspaper.

Mainone, one of the biggest IT service providers to medium-small-sized companies in China, did not appeal.

Along with its steadily growing market share, Microsoft has been stepping up its efforts in fighting piracy in China for many years. After putting Hong Lei, the mastermind behind a popular modified and easy-to-install pirated version of Windows XP, behind bars, Microsoft came after several Chinese companies such as HISAP and Dazhong Insurance. 

But according to analyst Fang Xingdong, Microsoft's anti-piracy moves are not just to recoup its losses as a result of copyright infringement, the cases were part of a wider a marketing strategy in China. 

"To some outsiders, Microsoft looks like a victim to pirated softwares, but the companies got sued never stand a chance against Microsoft," Fang said. "There are millions of software developers out there, but why do we only hear from Microsoft?"

According to Fang, Microsoft's monopoly leaves the consumers with no choice to choose or to bargain but to turn to pirated softwares.

"In the last decade, almost all medium and large scale companies in China received legal letters from Microsoft. Microsoft then sent follow-up salesmen and asked the companies to pay or wait to get sued.," added Fang. "These anti-piracy moves are not to win the lawsuits, but to increase its sales."

Topics: China, Microsoft, Piracy

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  • Now that really sounds like just another excuse

    "There are millions of software developers out there, but why do we only hear from Microsoft?"
    Maybe because they where the ones who's stuff was being pirated?
    "Microsoft's monopoly leaves the consumers with no choice to choose or to bargain but to turn to pirated softwares"
    Isn't that not true since there are Macs and Linux software or computers to use?

    Then again this from a country that makes fake iPads and Apple stores because why, Apple has a monopoly on Apple stores and iPads?

    This sounds like someone trying to justify theft for who got caught stealing, just like children do.
    • 100% agree with everything in this post.

      And I have no clue what the author is trying to say. Is she saying it is just a ploy for MS to go after companies that are selling copies of their wares for a profit?

      To even repeat the meme of consumers being forced to pirate because they have no choice is simply ... simply... I have no idea because it such a whacked idea.

      1) Linux.

      2) Mac OS. (but it is even more expensive with the hardware).

      3) Chrome OS.

      4) iOS/Android (go fully portable).

      5) Develop your own OS (Come on, China represents a market of 1-1.5 billion. A quality home-grown OS could do very well).

      6) Choose not to play.
  • The other possibility is

    that Liu Jiayi is a Chinese Intelligence Officer.
    Tony Burzio
    • Sounds more like....

      the author is trying to somehow play this against Microsoft and divert from China's protectionist stance in regards to their own citizens, regardless of the crime.

      Microsoft publicly outs companies in other countries too, both here and abroad. China isn't somehow being picked on by a big, bad American company. However, the top countries in the world for software piracy are 1) China, 2) Russia, and 3) Brazil. Do you honestly suggest Microsoft is actively pursuing pirates in China for no reason?

      Also, do tell about how Microsoft is forcing these companies to not use Linux software....
      • Here's how

        They are not offering free Linux versions of Office and IE. :)
        • And yet...

          China would still rather pirate commercial software than to legally use free software.

          That's telling....
      • Why are companies "American" only when bad things happen?

        Every other time they're called "multinational".

        Even when news sources report increasing amounts of corporate welfare given to them, with politicians even inquiring about such things, with - for example - Microsoft telling Senator Grassley (IA) how Microsoft has "no moral imperative to hire Americans". With MS's answer, they should give back every single penny taxpayers shelled out for them, with interest. Make it a free market instead of whatever-this-is-where-companies-can-gut-their-erstwhile-home-country-and-get-paid-for-doing-so.
  • The zinger

    "These anti-piracy moves are not to win the lawsuits, but to increase its sales."


    Piracy IS lost sales!
    • Not necessarily

      You assume, like the "intellectual property lobby", that every person who uses illegally copied software would buy what he used if he could no longer pirate it. I humbly submit to you that many would simply abandon the use of the software and many would switch. How many would actually buy is a question best left to economists.
      John L. Ries
  • CNN reported in 2007 that

    "How Microsoft conquered China" (CNN Money) that MS encouraged pirated copies, just so MS software would be more widely adopted than cheaper alternatives... noting price hikes and the discontinuation of upgrade versions (Office) for 2010, it's clear developed countries are paying for this trickery.

    ZDnet also reported an article in the past, entitled "Does sharing source code to Russia and China pose a security risk?"

    Those and other articles sum up the subject of this article far more quickly and with much more detail. It is indeed a marketing ploy, and even Gates said it himself (CNN Money).
  • Where is Loverock Davidson I want to hear what he has to say

    Come on Lovie give it to us:-)
    Over and Out
    • Yup

      He has more relevent things to say than yourself.