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Microsoft: More tricks than treats in pirated software

Microsoft Corp. is helping protect consumers and businesses from the dangers of “trick” software — counterfeit software disguised as genuine — and is working to take the economic advantage out of dealing in pirated software.

To help consumers avoid being tricked into using pirated software, Microsoft has set up a Web site to help them avoid deals that seem “too good to be true” and learn how to spot the differences between genuine and non-genuine software. These “How to Tell” tips are part of Microsoft’s Genuine Software Initiative, a three-pronged program that addresses software piracy by promoting education for consumers and partners, seeking engineering solutions to dissuade pirates, and taking enforcement actions to protect honest software vendors.

As part of this three-pronged initiative to help protect consumers and legitimate businesses, Microsoft today announced the filing of 20 lawsuits against alleged dealers of counterfeit or infringing software in 13 states (Alabama, California, Connecticut, Georgia, Illinois, Mississippi, New Jersey, New York, Ohio, Oklahoma, Texas, Utah and Virginia).

“When consumers and businesses are looking for new computers and software it is important to buy from reputable resellers,” said Larry Malashock, vice president of Software Plus, a large software reseller in St. Louis. “Customers often don’t realize that these ‘too good to be true’ deals that they can get off the Internet or from nonreputable vendors don’t come with the right licensing or the services provided by the legitimate channel. Counterfeit software can include code that will end up hurting their computing environment.”

Customers want to be confident that they can purchase genuine software from their local software resellers, and ensuring customers receive genuine software across the United States is of paramount concern to Microsoft’s anti-piracy program. Intellectual property is a key driver of the U.S. economy, and the lawsuits announced today are part of Microsoft’s ongoing commitment to protect intellectual property, jobs, honest resellers and partners from alleged dishonest dealers who victimize consumers and businesses by exposing them to the risks of counterfeit software, such as viruses, loss of data or identity theft.

The Economy of Software

The pandemic of counterfeiting and piracy is estimated to cost the U.S. economy an average of 750,000 jobs annually — nearly equivalent to employing the entire city of San Francisco. Piracy also has a devastating effect on industries built on innovation and intellectual property, with software piracy losses in the United States accounting for economic losses of $7.3 billion (U.S.) in 2006, according to a study conducted by industry analyst firm IDC. “This isn’t just about protecting Microsoft’s intellectual property,” said Sharon Cates, attorney for Microsoft. “This is also about protecting consumers and the thousands of owners of small and large businesses and their employees who make up the software industry and depend on it for their livelihoods.”

For many businesses, ensuring that they are using genuine software is part of maintaining a professional reputation with customers and partners alike. This philosophy is a cornerstone of Microsoft’s efforts to educate local businesses on the benefits of genuine software and to protect honest resellers through enforcement. “A healthy software industry can help build strong local businesses, and that reaps larger economic benefits for everyone involved,” Cates said. In fact, an October 2007 IDC profile sponsored by Microsoft found that overall software-related employment in the United States for 2007 is expected to be 66 percent of total employment in the information technology sector, a sector that comprises more than 10.1 million employees.

Lawmakers Support Efforts to Combat Piracy

According to a Gallup Study commissioned by the U.S. Chamber of Commerce, 22 percent of adults in the United States have reported purchasing some type of counterfeit product in the past year. Counterfeit products range from auto parts to cigarettes, and from extension cords to software. Fewer than one-third of Americans seem to be aware of the size and breadth of the problem, and even fewer understand the economic ramifications of this problem. These statistics are troubling to lawmakers concerned with protecting American jobs and the safety and security of their constituents. “The negative impact of piracy is further-reaching than most can imagine,” said Rep. Michael McCaul (R-Texas). “My hope is that through increased enforcement, we can make piracy a cost-prohibitive business model and protect consumers and our local economies from the negative impact of piracy.”

Get Genuine Software to Work for All Users

As an industry leader, Microsoft believes it has an obligation to act to stem the tide of illegal, pirated software. In addition to taking enforcement action to protect intellectual property, legitimate resellers and customers, the Genuine Software Initiative focuses the company’s many activities and investments directed at combating piracy into a single coordinated effort, and provides businesses and consumers with a wealth of resources and tools to learn how they can protect themselves from the risks associated with counterfeit software and ensure they purchase genuine Microsoft software.

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