US$4b losses from software piracy in Asia

Asia Pacific (including Japan) accounted for the highest revenue losses due to software piracy among corporate users last year.

SINGAPORE--Asia Pacific (including Japan) accounted for the highest revenue losses due to software piracy among corporate users last year.

Specifically, losses in the region hit over US$4 billion for the first time, contributing about 35 percent to a worldwide figure of US$11.8 billion, said the Business Software Alliance (BSA) in a statement today.

It was citing the sixth annual survey conducted by independent research firm International Planning and Research Corp.

The BSA is a global watchdog which educates the public on software copyrights and advocates public policies that promote the development of the software industry. Its members include Microsoft Corp, Adobe Systems Inc, Apple Computer Corp, Macromedia Inc, Corel Corp and Symantec Corp.

According to the survey, last year's revenue losses in Asia Pacific represented a 46 percent jump from US$2.8 billion in 1999. Meanwhile, piracy rate increased to 51 percent, from 47 percent in 1999.

Explaining the surge in losses, BSA Asia Pacific vice president & regional director Jeffrey Hardee said: "Software sales did not match the strong PC shipment in Asia last year. In addition, many Asian currencies were weak against the US dollar."

Hardee also attributed the widened losses to increased piracy rates, particularly in Japan (37 percent), China (94 percent) and Korea (56 percent). The three countries were also hardest hit in terms of revenue losses (see Table).

On a global scale, piracy rate rose to 37 percent last year from 36 percent in 1999.

Worldwide losses (of US$11.8 billion), however, represented a decline of 3.5 percent from US$12.2 billion in 1999.

According to the BSA, "this decline in dollar terms is not an indication of a decrease in piracy". In fact, the dip was a result of the strong US dollar, declining software prices and slow software sales, it noted.

Table : Piracy in Asia Pacific in 2000

Countries Piracy Rates (%) Revenue Losses (US$M)
1999 2000 1999 2000
Australia 32 33 150.4 132.5
China 91 94 645.5 1,124.4
Hong Kong 56 57 110.2 86.2
India 61 63 214.6 239.6
Indonesia 85 89 42.1 70.0
Japan 31 37 975.4 1,666.3
Korea 50 56 197.3 302.9
Malaysia 71 66 84.2 95.6
New Zealand 31 28 19.7 12.4
Pakistan 83 83 18.9 31.4
Philippines 70 61 33.2 27.1
Singapore 51 50 61.8 44.3
Taiwan 54 53 122.9 154.8
Thailand 81 79 82.2 53.1
Vietnam 98 97 13.1 34.9
Others 71 75 20.3 7.6
Total 47 51 2,791.5 4,083.1
Source: BSA However, there were signs of improvement in Singapore. Piracy rate here declined to 50 percent last year from 51 percent in the previous year.

In addition, revenue losses dipped 28 percent to US$44.3 million, thanks to the local government's effort in clamping down retail pirates and in educating users, said Hardee.

For instance, customs officers at the Port of Singapore seized 15,000 copies of pirated Microsoft and Symantec software during a routine inspection last November.

In the same month, about 80,000 copies of computer programs, games software and audio recordings were seized at three night markets in the Republic. The CID also arrested 47 suspects.

According to Singapore law, if an individual or a company reproduces unlicensed software for sale or distribution, criminal action can be taken against them. That could result in a fine of S$10,000 per unlicensed copy, or imprisonment of up to five years, or both.

However, any company or individual found using unlicensed software will be liable under the Copyright Act. If legal action is taken, the offender might have to pay for damages and legal fees.

Meanwhile, the Malaysian government had last July stepped up efforts to crack down on the use of illegal software among business users. Enforcement actions included random visits and surprise audits on companies nationwide.

Under the Copyright Act 1987, those found guilty of using pirated software can be fined up to RM10,000 (S$4,600) for each copy of software, and/or jailed up to five years. Those who make or possess illegal copies could be fined RM20,000 (S$9,000) for each offence, and/or jailed for up to 10 years.

Piracy rate in Malaysia was 66 percent last year, down from 71 percent in 1999. However, revenue losses due to piracy rose over 13 percent to US$95.6 million as software sales lag behind PC sales, said Hardee.