Survey: Software pirates go online
Net auctions may be a dumping ground for stolen wares
By David Noack
APBNEWS.COM
WASHINGTON, Sept. 2 — Nearly 60 percent of the software sold on three major
online auction sites is pirated, according to a random survey by a software industry trade
group.
THE WEEKLONG audit, taken between Aug. 15 and Aug. 20 by the Software and
Information Industry Association (SIIA), found that software programs that usually sell
for hundreds of dollars were being hawked at bargain-basement prices. The
organization’s anti-piracy unit conducted the survey, which was released Tuesday. In
all, 20 different programs from software companies such as Macromedia,
FileMaker, Visio
and Adobe were being auctioned on 221 separate occasions on eBay, ZDNet Auctions and
Excite Auction Web sites.
109 SALES FOUND ILLEGAL
After examining the information posted online for each of the applications and
buying several copies of the software, the anti-piracy investigators were able to
determine the legitimacy of 181 sales, according to the study. Of the sales, investigators
found that 109 were of pirated software, while 72 sales were legitimate. The group could
not conclude whether the rest of the 40 sales offered during the week were illegal or not,
and were excluded from the final tally.
“Based on our survey, consumers face a 60 percent possibility that what
they are purchasing is not legitimate software,” said Peter
Beruk, vice president of
Anti-Piracy Programs for SIIA. “They will discover they have been ripped off when
this illegitimate software is finally received.”
He said they looked at these three online auction sites after receiving
information via e-mail and a tips hot line, as well as at the urging of the software
companies.
Beruk said that it’s not only private individuals who are selling the
software but also what appear to be businesses.
“There is a big return here,” said
Beruk. “If you are pressing a
CD and throwing Photoshop and Illustrator on it, your cost of goods is under $2, and you’re
charging the person for the postage. You don’t have to be there while the CD is being
burned; go ahead and make dinner. Your costs are very low, and if you’re only selling
it for $30, that is a nice return,” said Beruk.
BARGAINS OFTEN BOGUS
While price is one factor that may indicate a software program is illegal,
another red flag should be statements such as “CD-R Copy,” “Backup Copy”
or “Compilation CD.”
“For many of the illegitimate products being auctioned, our survey found
staggering price differentials between the recommended retail price of a product and its
auction price, a clear warning sign for the alert consumer.
For example, we discovered Macromedia Director with a suggested retail price of
$999 being auctioned for $28. In another case, we found the popular Adobe Photoshop 5.0
available online for $11.99. Its recommended retail price is normally $549,” Beruk
said.
He said a lot of people who bid on and bought these CDs found that the software
doesn’t work because something went wrong when the CD was being created.
“They are getting the runaround, and they are getting frustrated. They are really the
innocent victims here,” said Beruk.
POLICING IS DIFFICULT
Excite spokeswoman Melissa Walia said the popular online portal site expects
users to abide by its terms of service.
“Even though we are not involved in individual transactions between the
users of our service, our Excite Auction terms of participation forbid the use of our
service for any unlawful purpose. Every person who makes use of our service agrees to
abide by our terms of participation,” said Walia.
Michael Katz, product manager for ZDNet Auctions, said that while the online
auction’s terms of service agreement prohibits this kind of activity, policing
user-created material is difficult.
“ZDNet is one of the largest sites on the Web, and therefore there is an
immense number of people creating auctions at any time,” said Katz. “We do
respond immediately to any complaints from users. We are trying to put together an
educational campaign to try and educate the users on the site to be wary of this and if
they see something that is suspicious to notify us immediately.”
Part of the problem in pirating software is the growth of computer hardware such
as CD-ROMs, where users, for about $200, can purchase a unit and create or burn CDs at
home.
INDUSTRY LOST $11 BILLION
Despite efforts to combat software piracy, software makers continue to see
growing annual software sales losses.
The fourth annual independent study on global software piracy, released in May
by the Business Software Alliance and the SIIA, found that of the 615 million new business
software applications installed worldwide during 1998, 231 million, or 38 percent, were
pirated. This represents an increase of 2.5 million more applications than were bootlegged
in 1997.
In all, the industry estimates they lost $11 billion in revenue in 1998 related
to software piracy. The countries with the highest dollar losses due to software piracy
are: the United States, China, Japan, Germany, the United Kingdom, France, Brazil, Italy,
Canada and Russia. Total losses for these countries were $7.3 billion, or 67 percent of
worldwide losses. In terms of piracy rates, the study estimates that more than nine in 10
business software applications in Vietnam (97 percent), China (95 percent), Indonesia (92
percent) and Russia (92 percent) are pirated.
David Noack is an APBNews.com staff writer.
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