Is Software Piracy Really a Crime?

Category: Software

A reader asks: Some of my friends are using commercial software without paying for it. They say it's no big deal to get pirated versions of games from 'warez' sites, and that I'm a fool to pay for Windows7 or Microsoft Office, when I can download them for free. Software piracy seems like one of those 'victimless crimes', so why is it illegal?

What is Software Piracy?

Software piracy is theft, plain and simple. Dressing it up in the pseudo-romantic connotations of "piracy" doesn't change that fact. Making excuses for theft diminish the harm that it does. Pardon the unpleasant analogy, but excuses are like flatulence: everybody has some and nobody wants to hear it. Read on, and I'll explain the harm that software piracy causes, the dangers it can pose, and why it's really pointless. (Read all the way to the end for the really good news.)

In general, software piracy is the unauthorized use of software. "Use" may have the ordinary meaning of using the software for its intended purpose, or it may mean making and distributing copies of the software. If you don't have the copyright owner's permission to use the software, you're committing piracy. You are taking the copyright owner's property - the right to control the sale or use of his software - without permission or compensation. That is theft, obviously.
Is Software Piracy a Crime?

The harm done by software piracy is done to the rights owner and to society. The rights owner (the software developer) is deprived of money that would otherwise be available to help him earn a profit from his labor, distribute his software and develop new software. Of course the "him" in the preceding sentence could be an individual, a small business, or a huge corporation.

Rail against greedy corporations all you like, but piracy costs jobs at every link in the software development and distribution chain, from programmers to retail clerks. The money that those unemployed or underpaid people would have received is not spent to support other people's jobs. About the only jobs that piracy creates are for lawyers, police, and thieves.

The Business Software Alliance, an anti-piracy group funded by software developers, estimates that lost revenues due to piracy amounted to over $63 billion in 2012. The BSA estimates that one in five copies of business software is pirated. In their 2011 Global Software Piracy Study, you can find these and other interesting stats:

  • 57 percent of all computer users admit to pirating software. Of those users,
    • 31 percent say they do it “all of the time,” “most of the time,” or “occasionally,”
    • 26 percent admit to using illegal software, but only “rarely.”
  • Venezuela is tops in software piracy (88%), closely followed by Indonesia (86%) and China (77%).
  • In the USA, the number is only 19%, but the value of the stolen software is highest (USD $9.77 billion)

Examples of Software Piracy

Some argue those figures are meaningless or excessive because some stolen software would not have been purchased anyhow. But stealing something that hasn't been sold is still stealing. The BSA identifies five types of software piracy:

  1. End-user piracy: - A company employee makes unauthorized copies of software. Examples include
    • Using one licensed copy to install a program on multiple computers;
    • Copying disks for installation and distribution;
    • Taking advantage of upgrade offers without having a legal copy of the version to be upgraded;
    • Acquiring academic or other restricted or non-retail software without a license for commercial use;
  2. Client-server overuse: - Allowing too many employees on a network to access a central copy of the software. Client-server software is typically sold with a license to have a limited number of simultaneous users. Each user over that limit constitutes an instance of theft.
  3. Internet piracy: - Downloading unauthorized copies of software from Web sites, ftp sites, via peer-to-peer networks, etc. Buying unauthorized (stolen) copies of software from auction sites and other online venues is also Internet piracy.
  4. Hard-disk loading occurs when you obtain a computer with free software pre-installed, if the seller hasn't obtained a license to reproduce and distribute the software in this way.
  5. Software counterfeiting is the unauthorized duplication of software and packaging of it to mimic the legitimate packaging. Counterfeit software may include user manuals and even end-user license agreements.

Caveat, Pirator!

You may find "too good to be true" deals on software at eBay or Craigslist. You may even see free or "cracked" versions of popular software titles on file sharing or Bittorrent sites. I advise people to steer clear, to avoid the dangers of installing pirated software, and guard against look-a-likes that have embedded malware. By installing one of these freebies, you could be opening a backdoor to your computer that allows hackers, viruses, and identity thieves to wreak havoc. Cleaning up that mess will cost a lot.

You can help stop software piracy by reporting it via the BSA's website, where your report will remain anonymous. You may also want to read the Microsoft Piracy Reporting FAQ, if you think you may have inadvertently acquired illegal software.

What About Free Software?

The irony is that most of this software piracy is pointless. There are many excellent FREE programs that rival the quality and features found in their expensive commercial counterparts. Did you know you can download a free office suite, with word processor, spreadsheet, database and presentation modules? It can even open and save files in Word, Excel, Access and PowerPoint formats. And that's just one example. You can find free software for accounting, productivity, image/photo/audio editing, anti-virus, password managers, games and much more.

Check out my articles Seven Free Software Downloads and Seven MORE Free Software Downloads, where you'll find links for some of the most popular free software. If you want even more, see my ebook Free Software: How to Save $5000 on the Most Popular Software Titles. And if you're curious about why free software exists, see Why Does Free Software Exist? to learn what motivates the people who create it.

Your thoughts on software piracy and free software are welcome. Post your comment or question below...

 
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Posted by on 18 Dec 2012


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Most recent comments on "Is Software Piracy Really a Crime?"

(See all 21 comments for this article.)

Posted by:

Nezzar
18 Dec 2012

Bob,
Thanks much for posting this article. I have never, to my knowledge, used pirated software, but other people need to be warned about it. In particular, you are spot on about the many jobs that can be lost in the development and distribution chain due to piracy. Let's think about the little guy here who needs a job!!
Nezzar


Posted by:

MMcQuown
18 Dec 2012

Why are you not mentioning Linux or Libre Office/Open Office?

EDITOR'S NOTE: The article was more about software piracy than the various free software options. I did mention OpenOffice in the link to the free software downloads, and Linux in the "Why Does Free Software Exist?" article.


Posted by:

Frank Verano
18 Dec 2012

I agree with you wholeheartedly. I'd like to know, however, how can you tell in advance before buying and downloading that it is not pirated to begin with?


Posted by:

Observer
18 Dec 2012

Good piece, Bob! I was once a software pirate. I had lots of stolen stuff. Then one sunny day I got a message from a publisher about a minute after I cracked their application. Something like having "10 minutes to deactivate or the RCMP (our federal police) would be on their way". They obviously knew that the crack code was out there, or the real owner was on line. Whatever, I obeyed. Immediately.

"The irony is that most of this software piracy is pointless." That statement is so true. I learned quickly. I now own my OS and two other pieces of purchased software. I run most of my business on free stuff because there's precious little need for paid software if you know what you're doing.


Posted by:

Dwight H Simmons
18 Dec 2012

Of course Software piracy is wrong. Yet have you ever read the agreement that you click on when installing the software?

It says that the manufacturer does not warrent that the software will do what it is sold to do. It absoles them of any responsibility if the software fries your data, allows virus attacks, or does not do what it proports to do.

Not only that, many software packages are so buggy that countless updates are needed to make it worek. Essentially, you are buying a beta product. All your feedback goes into the next version that, if you are lucky, you can get at a 10% discount.

Let us not forget customer support - usually free fo 30 days, then you pay.

Finally, documentation is provided online or on disk. Kinda hard to read and troubleshoot at the same time.

It is not right to steal, but once you open the wrapper of any package, you have no recourse. You can not even get your money back.


Posted by:

Denis Labrecque
18 Dec 2012

Thank you for this information.

Like you say there is no reason for stealing software and risking exposure to software from a Bit torrent site. There is excellent open source software out there. That said even those whom write open software have a right to make a living so it would be good to mention that even if it is free you always have to option to give something to the person working hard to make all these available to you. Things like Wikipedia, Libre Office and your favorite Linux distro, to the very least write to them to thank them for their work...

Thanks for your good work and excellent writing
Denis Labrecque

Disclosure: I am not a software developer.


Posted by:

Ron Boyd
18 Dec 2012

Thanks Bob for a great article. I was part owner of a software company in the 80's. We went out of business when so much of our software was stolen. We even had tech support calls from people with stolen software.


Posted by:

Robert Kemper
18 Dec 2012

I wholeheartedly agree.


Posted by:

James
18 Dec 2012

People who pirate software and music are socialist (everything is public domain) when they are on the receiving end. Try to get them to work one minute of overtime for free (or even get them to work to the end of their shift) and watch them whine like they've been unfairly enslaved. Underpay them by 15 minutes on their check and they want to sue. Ask them to donate some of their efforts to a good cause and watch them run the other direction. Ask a moral coward to do what's right when not being seen, they will gravitate to what is most convenient for them. Digital pirates are just the cyber hypocrites.


Posted by:

snert
19 Dec 2012

Free Software! It's everywhere! Why be a THIEF when you can get apps for free to do nearly anything? And if you're not fully satisfied you can get ALL your money back! Try to get a refund with paid software and see which hand gets full first.


Posted by:

Charles
19 Dec 2012

One should take any figures from the BSA with some salt. I recall one "study" where they compared the number of PC motherboards sold to the number of copies of Windos. MY PC never bought Windos as I have always used Linux, but I would be a "lost Sale" at least in the BSA figures. I actually tend to go through hoops to NOT buy a copy of windows with a computer as I will never use it, and don't want to support it's use.


Posted by:

Jack Dye
19 Dec 2012

Bob, I couldn't agree with you more.

I would be willing to bet that a lot of people who pirate software believe that it is OK as long as no one knows that they are doing it. It is no different from people that think red-light cameras should not be allowed. They believe that as long as no cop sees them running a red light, no crime is committed.

I do have a problem with software publishers like Intuit. They sell an excellent product like Quicken, but make some of the major functions become inoperable after three years. That fact should be printed in large bold letters on the front of the product box.


Posted by:

Charles
19 Dec 2012

I would think in this day and time the programmers could write the program where it would shut down the program when you tried to register the product or update it. Is this not possible?


Posted by:

kacmor
19 Dec 2012

I have very mixed feelings about all this issue.
On the one hand, yes, stilling is wrong. It is also sooo not necessary when free software is available. But those hard working developers are sometimes stilling from me. I had a legitimate software installed on my computer. Computer crashed. I was lucky to revive it by setting it to factory settings.BTW I had to buy the disks to do that, but that is another story. And my computer needed reinstallation of all software. And that translated to me buying the software AGAIN. Why? I was the same User, even on the same computer, isn't that stilling? Now Im sitting on dragon software licenced for one User and I don't dare install it because my laptop is getting cranky. Im not good with computers. Just an User who doesn't want the world to pass me by. I don't still, but I feel that the problem goes much deeper then what one can see at a glance.


Posted by:

ManoaHi
19 Dec 2012

I used to think that piracy was not really causing losses at companies. I knew a bunch of people that pirated AutoCAD. At that time computers were $2,000 and so was AutoCAD. AutoDesk did not really lose money because those people could not afford it and would not have bought it. In the end, they all became engineers and have bought AutoCAD for home even though their companies buy it for them at work. So, in the end, AutoDesk made out and did not lose out in those early years in those that pirated the software.

Later, I think that there really are companies losing out on sales, by pirating, if you find that the software doesn't do what you want or is buggy, you don't think about buying it. But if you are using the software you should pay for it. I pay for all the software that I use, I even donate to some that don't ask for money. I pay for those where it is voluntary. It also makes zero sense for companies to pirate software, they could ruin their name (brand) or get some of the people criminal records.


Posted by:

Cory McIntyre
20 Dec 2012

This may not be able to be posted, but asking if stealing software is OK because it is victimless is like my asking if I can sleep with your wife as long as you don't know about it!

Of course it's wrong. If it's not your software it's stealing!

Thanks for your comments on this topic. I used to use software that wasn't mine, but now pay for all that I use unless it is freeware.


Posted by:

cassandro
21 Dec 2012

It doesn't make piracy any less wrong, but there are copyright holders who by their abusive actions encourage it. For instance, I have a laptop bought secondhand. It came OEM (and thus legal and paid for) Vista. The buyer was desperately unhappy with Vista so paid a shop to install a legal copy of Windows XP Professional in its place.

But Microsoft (after the fact, iirc) decided too many people were ditching Vista to retrofit XP, so they declared doing it a violation of the EULA, unless XP Pro (NOT Home) was retrofitted over the high-end Vista, Pro I think.

So I now have a computer for which Microsoft has twice been paid for an operating system, but they wont recognize it as valid (for purposes such as downloading Windows Security Essentials, for instance) because they fancied the practice exposed the fact that they had sold a product so defective people would pay a couple of hundred dollars to get rid of it.

And it seems they are planning a similar scenario when people buy Windows 8 machines and want to retrofit with Win7 - tread on Redmond's vision of how consumers should behave and you will be cast into the outer darkness.

Guess their chances of selling me Windows 8.

And btw, my "invalid" computer still works fine.


Posted by:

Keith
08 Jan 2013

I am way late to this party, but I'm catching up from the holidays. Normally, I wouldn't comment on an older article such as this one, but you disappointed me so much, I had to speak up.

First, let me get it out of the way that I agree that, according to current law, the activities you mention are illegal, and people should not do them. It is a very open question whether the current law is justified, but I am not going to comment about that.

What bothers me is that (1) the illegal action is NOT stealing -- the proper term is copyright infringement, and by participating in the big lie campaign pushed by the copyright maximalists, you lose major geek credit in my book. There is a big difference between stealing and unauthorized copying. When something is stolen, the original owner no longer has it. When something is copied, whether authorized or unauthorized, the original owner still has his. Calling unauthorized copying by the name 'stealing' is intentionally confusing the issue. (2) The BSA's bogus loss figures have been debunked so often, you lose more geek credit by quoting them as if they were somehow useful.

I expect better of you, Bob, and you've really disappointed me.


Posted by:

ina
14 Jan 2013

I disagree with Keith:
calling stealing "copyright infringement" and "unauthorized copying" is what is "confusing the issue" :).


Posted by:

hsm
20 Sep 2013

"But stealing something that hasn't been sold is still stealing."

This is unsatisfactory and hand waving of the real issue that a software is not a material object and somebody using it when made available for free by someone else 'does not imply' a lost sale and deprivation. The reality is that many of these people ("pirates") would not have bothered exploring these software were they not available for free on internet, affordable or not doesn't change anything, it is a personal subjective choice.
Neither does it make any sense for a person to be liable to pay for it if using cracked version of a software, such EULA condition is a forced nonsense, it is more of a law put in for corporate greed to steal money they never actually were to get. What these companies claim is all bogus and notional. Using a cracked available version is completely harmless act done by the person free to do what he wants to do, there is no harm intended/done to anyone.
There is no way to distinguish among them the borderline users, which is pointless in any case as you cannot force someone to buy a software.
By releasing hypothetically uncrackable software or somehow restricting human freedom with a restrictive nonsense copyright law implemented you would only gain the borderline customers, but it is something useless since a comparable number of users using a cracked version are equally likely to buy and support which they wouldn't have otherwise happened to use and like.
If a company thinks/says it is not doing well because of 'software piracy', it should move on to do something else than making software.


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