Microsoft teams up with consumers against global software piracy

Microsoft has announced a surge in voluntary reports – over 150,000 within the past two years – from people who unknowingly purchased counterfeit software that was often riddled with viruses or malware. The software giant is now lending a hand to give people a voice in the fight against software counterfeiting by announcing a surge of its own with Consumer Action Day.

"Consumers want action. The majority of our enforcement cases announced today resulted from tips and reports from consumers," said David Finn, associate general counsel for Worldwide Anti-Piracy and Anti-Counterfeiting at Microsoft. Finn said that consumers duped by fraudulent software often encounter viruses, lose personal information, risk identity theft, and waste valuable time and money.

The software industry has long studied the black market for pirated software and its effects on consumers. In its release, Microsoft pointed to a seminal study by IDC in 2006, which revealed that one in four web sites offering counterfeit software attempted to install unwanted or malicious code upon downloading. It also quoted Media Surveillance, a German anti-piracy solutions company, as having found this rate to be rising when it recently downloaded several hundred pirated copies of Windows and hacks, of which 32 percent contained malicious code.  Worse, contemporary counterfeiters are often large criminal syndicates that distribute hundreds of copies of unlicensed software for other ulterior motives. "Software pirates are likely to create botnets, which are armies of compromised computers controlled by cyber-criminals and used to perform a host of illegal Internet activities," said Markus Schweitzer of Media Surveillance. Citing a recent example, he said software pirates helped create a botnet army by offering a counterfeit version of Windows, which compromised PCs and then ordered them to connect to a server controlled by cyber-criminals.

The 2006 IDC white paper also described a review of counterfeit Microsoft software purchased at resellers in 17 countries. Over 50 percent of the discs contained phony code, had malware or could not even be installed. Recently the BSA October 2009 Internet Piracy Study showed countries with high piracy rates often have high malware infection rates. The effects of malware range from annoying advertisements to a severe breach of information security. A recent study by Harrison Group Inc. found that companies using unlicensed or counterfeit software were 73 percent more likely to experience the loss or damage of sensitive data and 73 percent more likely to have critical computer failures lasting 24 hours or more.

As part of Consumer Action Day,  Microsoft will launch educational initiatives and enforcement actions in over 70 countries to help protect consumers from counterfeit software. These range from an intellectual property rights education program in schools across China, an originals club for software resellers in Germany, a risk-of-counterfeit training course for the consumer protection authority in Mexico, a children's online safety program in Greece, and a study of piracy's impact on small and mid size businesses in Argentina.