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Compelling reasons for not using counterfeit software

Metaforic : 14 August, 2008  (Special Report)
Andrew McLennan from Metaforic explains in very simple terms how software piracy affects everyone and what the consequences are of subscribing to counterfeit IT products
Are you a bargain-seeker sorely tempted by the idea of getting an expensive piece of software for a fraction of the cost? There’s often little public sympathy for the multinationals that charge high prices for their business software or games. They can afford it, right? So why should we worry about pirate software?

Piracy costs software companies billions in lost revenue. Last year, the worldwide figure was over $47 billion. Software has a long development cycle and requires a large investment. With lower revenues, fewer products can be developed. Small software companies are most vulnerable which threatens not just jobs but the future of this sector as a whole.

Not only are businesses suffering financially, their business integrity is also in jeopardy with market trust diminishing resulting in huge business losses. Additionally, if counterfeiting operations manage to get hold of the company’s IPR (Intellectual Property Rights) then an explosion of mass imitations could also result in a huge loss. Even big corporations aren’t exempt as was clearly illustrated when Microsoft lost $925m in revenue thanks to a single Taiwanese counterfeiter.

Corporations pay taxes that are used to public benefit. This means that reduced income and profits from this sector results in reduced taxes and therefore reduced benefit. The problem is large enough to have a significant impact on the UK economy which means we are all affected. Recent research by IDC showed that a 10% reduction of software piracy levels would add £10 billion to the UK's GDP through increased business in the IT sector. This would generate £2.5 billion in tax revenue and create 40,000 jobs.

From a consumer perspective, downloading or purchasing illegal software is a criminal offence. Of course, there’s a good chance individuals might get away with it, but the consequences are far wider than one might think. Those industries suffering from the rise in software piracy are now making Internet providers and hosts responsible and using them to reach culprits directly. Virgin Media is the latest corporation to take this action having recently sent out letters to all their users threatening prosecution for anyone responsible for downloading and sharing illegal media and music files.

Then there is the increased risk of corrupt or infected software. In studies conducted on counterfeit versions of Microsoft software, one in three disks could not actually be installed on a computer. Whatever price was paid, it will not be refunded. You are also unlikely to get any instruction manuals, which you may need, and obviously technical support is not available in the event of a problem. In an IDC study, 25% of websites that offered counterfeit or pirated software also attempted to install malicious spyware or Trojans that could compromise a system. Of 228 discs examined, two thirds contained additional executable files that could introduce vulnerabilities.

If a user is connected to the Internet – which the vast majority of PCs are – and the PC has become infected, the information on it is no longer secure. Personal information such as names and addresses, passwords, financial data (such as bank details and credit card numbers) can be accessed and sent to contacts within the illegal operation or their associates, setting them up for identity theft and a target for fraud.

A PC could also be used to host illegal website content, participate in denial of service attacks or be used as a spam host. At this point, the machine is now officially a bot on a botnet, becoming one of a large coordinated network ready to conspire in illegal activity, and the chances are the user wouldn’t even know. Through the computer’s unique IP address, however, the source of the illegal activity could be traced directly to the user. This is unlikely to happen, but there have been instances in the past.

Online game play is extremely popular and increasingly so. The prevalence of broadband connections allows groups of players to play at the same time with voice communication, creating a sociable and more competitive experience. Without it, it becomes a solitary pastime with users only able to compete against their own high score. There have been numerous cases of gamers having their online accounts being shut down and their access to Microsoft’s Xbox Live service blocked. It’s the ardent gamers, eager to play the next highly anticipated game, who are keen online players and most likely to download an illegal copy. 20,000 of them found themselves banned from playing Half-Life 2 when game developer Valve shut down their online accounts because it had evidence that their copy of the game had been obtained illegally. Before players could get going on the long-awaited game, they were forced to authenticate their copy online. In May last year, gamers with modified Xbox 360 consoles were similarly dismayed to find themselves blocked from accessing Microsoft's Xbox Live service.

So, next time you are tempted to purchase or download a piece of illegal software, think of the consequences. The industry is getting tougher and you don’t want to be on the wrong side of the law.

Andrew McLennan is CEO at Metaforic. Metaforic develops anti-hacking products to protect software applications, DRM systems, Client Applications and License Management Systems.
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