The Business Software Alliance announced another crackdown on software piracy last week. The BSA said that as part of an effort to deter California businesses from using unlicensed software, two California-based companies will pay the software piracy watchdog more than $175,000 to settle claims that they had unlicensed software on their computers.
The companies agreed to delete all unlicensed copies of software, acquire any necessary replacement licenses, and commit to implementing stronger software license management practices.
"Since 2004, California settlement dollars have increased by a total of 32 percent," Jenny Blank, senior director of legal affairs for the BSA, said in a statement. "We are concerned about these increases and hope to continue to raise awareness about the many risks associated with software piracy in order to deter businesses from using unlicensed software."
Targeting Small Businesses
The companies in question are two small businesses: Chef Works of San Diego and Roger's Gardens of Coronoa Del Mar. Chef Works paid $102,000 to settle claims that it had unlicensed copies of Adobe, Microsoft, and Symantec software. Roger's Gardens paid $73,368 to settle claims that it had unlicensed copies of Adobe, Microsoft, and Symantec software.
Small businesses feeling the wrath of the BSA is common, according to an analysis by Associated Press writer Brian Bergstein. His research shows 90 percent of settlement revenue comes from small businesses. The AP reported that the BSA collected $13 million in settlement proceeds for companies such as Microsoft and Adobe Systems last year alone.
The BSA could not immediately be reached for comment, but Keith Kupferschmid, senior vice president of intellectual property policy and enforcement at the Software Piracy Association (SPA), shed some light on the matter.
"The BSA's numbers are very different from ours. I can't say for sure why the BSA goes after small companies. Presumably, it's a product of the tips they get," Kupferschmid said. "We work for a lot of the same member companies. It's not like piracy is just in small companies. It's certainly taking place in midsize and large companies as well." The SPA, he said, typically targets midsize companies that have between 200 and 500 employees.
The Cost of Piracy
The cost of piracy is, of course, much greater than the settlements collected from any size business or individual. In 2003, piracy cost the California economy more than 13,000 jobs, over $802 million in wages and salaries, over $1 billion in retail sales of business software applications, and approximately $239 million in total tax losses, according to figures by the BSA. Last year alone, the U.S. software industry lost $7.3 billion as a result of software piracy, an increase of $400 million over the previous year.
Software piracy is a serious problem not only in the U.S., but also worldwide. According to BSA figures, some 35 percent of the software installed in 2006 on PCs worldwide was pirated, amounting to nearly $40 billion in global losses. An independent study by IDC found that 21 percent of software in the U.S. is unlicensed.
"The threat of litigation and actual litigation is a huge deterrent. If there were no cops on the highway to pull you over for speeding, people would go any speed they wanted. If there's a lot of cops on the road, obviously people are going to speed less," Kupferschmid said. "So the more cases we bring and publicize, the more people will know we are out there; and hopefully they will be more cautious about being software-compliant."