50b dollars lost to software piracy

May 11, 2010 12:00 am

, SINGAPORE, May 11 – Software piracy cost technology companies more than 50 billion dollars around the world last year, with Asia accounting for the largest share of losses, an industry report said Tuesday.

Despite successes in the fight to protect intellectual property rights, on average 43 percent of software used in computers worldwide in 2009 was pirated, from 41 percent the year before, the Business Software Alliance (BSA) said.

Worldwide, piracy losses reached 51.4 billion dollars in 2009, of which 16.5 billion dollars was in the Asia-Pacific region, the annual report found.

The deluge of counterfeits was largely due to the growth of the personal computer market in Brazil, India and China, said the BSA, a global trade alliance with a regional office in Singapore.

However, last year\’s losses worldwide were three percent down from 2008 while the rate of pirated software use fell in 54 economies, remained steady in 38 and rose in 19.

On average 59 percent of the 900 million pieces of software installed in the Asia-Pacific region last year were unlicensed, said Victor Lim, a vice president at IDC, which carried out the study with the software alliance.

Bangladesh had the highest software piracy rate in Asia, followed by Sri Lanka, Indonesia and Vietnam, with China and India also among the worst culprits.

"This study makes clear that while efforts to bring down piracy levels in the Asia-Pacific are enjoying some success, dollar losses at over 16.5 billion (dollars) remain the highest in the world," said Jeffrey Hardee, BSA\’s vice president and regional director.

"This is unacceptable and there is still much to be done to engage governments, businesses and consumers on the risks and impact of software piracy."

The BSA said that for every 100 dollars of legitimate software sales in 2009, another 75 dollars-worth of unlicensed programmes were sold.

Ex-Soviet state Georgia was the world\’s top pirate user, with 95 percent of all software deemed illegal.

That was followed by Zimbabwe (92 percent), Bangladesh (91 percent), Moldova (91 percent), Armenia, and Yemen (90 percent).

The United States had the lowest piracy rate with 20 percent, followed by Japan (21 percent), Luxembourg (21 percent), New Zealand (22 percent) and Australia (25 percent).

Singapore was the only Southeast Asian economy in the report\’s list of the 30 economies with the lowest piracy rates.

Hardee said the problem affected not just global technology giants, but also small and medium-sized firms, including some in Asia, as it hindered them from growing domestically and expanding overseas.

A 10-percentage point reduction in the software piracy rate in the Asia-Pacific over four years would "directly contribute" 41 billion dollars to the region\’s economies, he said at a briefing.

It would also create 435,000 jobs, generate another 5.4 billion dollars in taxes and increase revenues to local vendors by 33 billion dollars.

"There is a compelling case here for governments to bring down piracy levels," Hardee said.

He told AFP subsequently that companies rather than individuals, using bootleg computer programmes, were inflicting the heaviest damage.

"Surprisingly, quite a few listed companies are caught using pirated software. They just have unsophisticated or no software management policies in place," he said. "It\’s quite shocking."

In addition to risking legal action, companies also risk compromising the security of their databases by using pirated software, he said.

"To make them vulnerable without managing the problem is really irresponsible," Hardee said.


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