Global software piracy on the rise

A BSA study puts the tab on piracy at $11.4bn, but worldwide governments keen to grow their technology sectors are stepping up efforts to curb the trend
Written by Peter Galli, Contributor

The global software piracy rate rose last year for the first time in six years, indicating that the downward trend in piracy rates could be over, according to the latest piracy survey from the Business Software Alliance.

The survey, released Monday, says that software piracy continues to "pose challenges for the industry and the global economy. While global software piracy [rates] rose slightly in 2000 to 37 percent [from 36 percent in 1999], the ensuing dollar losses declined 3.5 percent from 1999 to $11.75bn. This decline in dollar terms is not an indication of a decrease in piracy but rather a combination of slow growth and somewhat lower prices. But, at $11.75bn, it is no small problem."

While 2000 was a year of relatively slow growth, it was also a year of steady piracy, the BSA said. "It appears that there is more change in the attitudes towards piracy in periods of economic growth, when businesses are adapting new technology to keep up with demand and competitive pressures," the study said.

There is also a fundamental piracy problem in the more technologically advanced regions of North America and Western Europe, the study found.

Of concern is that while these regions had the lowest piracy rates in the world, "they are showing the least progress in reducing piracy. This suggests a core piracy problem that is more entrenched and, therefore, more difficult to overcome," the BSA said.

Bob Kruger, the BSA's vice president of enforcement, told eWEEK that one of the major reasons for the spike in piracy was that many businesses, feeling the economic pinch, appear increasingly to be taking the risk of running unlicensed software.

"As the economic slowdown hits, some firms are forced to turn their attention away from ensuring all their software is correctly licensed and taking greater risks by using some unlicensed software," he said.

The Internet also poses a considerable challenge and has opened a new frontier for the easy distribution of pirated software, Kruger said.

While Eastern Europe was once again the region with the highest piracy rate, at 63 percent in 2000, it accounted for only 3 percent of the total dollar losses by region over the period. It has been the region with the highest piracy rate in every BSA study since 1994.

Within the region, Russia and the Ukraine (and other Commonwealth of Independent States countries) continued to have the highest piracy rates in the region in 2000, at 88 percent and 89 percent, respectively.

Latin America came in second with a 2000 piracy rate of 58 percent. It accounted for just 7 percent of total dollar losses by region, with the Middle East close behind at a piracy rate of 57 percent and 3 percent of total dollar losses.

The study found Vietnam to be the country with the single highest piracy rate, at 97 percent, down from 98 percent in 1999. China came in second with a piracy rate of 94 percent, up from 1999's 91 percent. Indonesia was third at 89 percent, also up from 1999's 85 percent.

Both the US and Canada showed declines in the piracy rate last year, with the US coming in at 24 percent -- the lowest in the world -- and Canada at 38 percent. Software piracy in North America accounted for 25 percent of the total dollar losses, at a combined $2.94bn last year, only slightly less than Western Europe's 26 percent piracy rate and revenue losses of $3.08bn.

Greece had the highest piracy rate in that region with 66 percent, while some of the largest markets like France, Germany, Italy and the United Kingdom failed to lower their piracy rates last year. "This is a departure from the general trend of lower piracy that has been observed since 1994, and could represent a disturbing trend for the future," the BSA said.

Kruger said the Washington-based BSA, whose members on the piracy side include Adobe, Microsoft, Apple and Symantec, is reacting to increased piracy by operating its programs more aggressively than ever before, and is considering migrating programs that have been effective in reducing piracy rates to those regions with high rates.

"We are also looking to see if the existing laws are adequate to meet the challenges of the changing piracy market, especially on the Internet side," Kruger said. "We are also examining our existing education programs and will be getting far more aggressive in our enforcement efforts."

In line with that move, the BSA announced today that it had secured 159 software piracy settlements globally -- 88 in Europe, the Middle East and South Africa, 36 in the US, 14 in Asia, and 21 in Latin America.

"This is the largest number of settlements we've ever announced at one time and reflects our commitment to reducing piracy," Kruger said. "We are not discouraged by the rising numbers and will continue to do whatever is needed. No company is too small to be investigated, and we have hundreds of current investigations under way. We expect more settlements this year than last, where we achieved more than 300 in the US alone."

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