Software Piracy: Is it Really a Crime?

Category: Software

A reader asks: I know 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 Windows or Microsoft Office, when I can download them for free. Software piracy seems like one of those 'victimless crimes', so why is it illegal? Read on for my analysis...

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 man or woman, 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 37 percent of software installed on personal computers is unlicensed (pirated), and 57 percent of all computer users admit to pirating software. There's also a growing malware threat related to the use of unlicensed software. In their latest report, you can find these and other interesting stats:

  • losses due to piracy amounted to over $359 billion in 2018
  • malware infections are tightly linked to the use of unlicensed software
  • there's a one-in-three chance of encountering malware when installing unlicensed software.

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 websites or peer-to-peer networks. 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. If you think you may have inadvertently acquired illegal Microsoft software, you may want to read Microsoft's How to Tell page to find out if your Microsoft software is genuine and licensed.

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 Free Microsoft Office Alternatives and Replace Your Paid Software with Free Alternatives. Your thoughts on software piracy and free software are welcome. Post your comment or question below...

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

Posted by:

03 Jan 2020

agree have in the past as I am sure a lot has, have found out it is not so free, as most come with a cost, bottom line is get a license or do not use it

Posted by:

03 Jan 2020

I totally agree with your comments, Bob.

Posted by:

Greg C
03 Jan 2020

Astute shoppers can OFTEN find popular licenses on eBay for about 5% of their normal retail price!
This means that major software publishers, especially Microsoft sell their products in bulk at a tiny fraction of what consumers have to pay.
While a bulk price reduction is fair, selling a product with a 98% reduction is NOT!
This enormous price difference amounting to hundreds of dollars for a computer sold with Windows and MS Office was the major reason I quit selling computers several years ago.

Posted by:

03 Jan 2020

In 2015, my attempt to upgrade from Windows 7 to Windows 10, using the legitimate free version, resulted in a bricked motherboard.
Is that a hint on how to prevent piracy?

Posted by:

Dave Baker
03 Jan 2020

Another great article Bob. I totally agree with you there are lots of great free alternatives out there. Love your site

Posted by:

03 Jan 2020

Thank you for another great topic coverage.
It should be also noted that the members of the "PAYware" industry are no angels themselves.
Their business model(s); where *new/updated software versions require additional costs or where the model is a (yearly) subscription-based, are solely for the purposes of extracting maximum profits.
I recall the "Hooligan B*st*rds" in the music industry (RIAA) and in the movie industry (MPAA) chasing similar exorbitant profit margins, until RIAA got smacked-down by Apple (et al) and MPAA being challenged by streaming services (such as Hulu, Netflix, et al) for more equitable pricing for both buyers and sellers.

Posted by:

Lee Brown
03 Jan 2020

Hi Bob
I totally agree with you theft is theft and stealing is stealing.
But think about this for a moment. I had some old software on a older PC that I bought and paid for, then I upgraded my computer faster processor newer operating system etc. etc. But now I would like to use some of my old software on my new machine, but the software developer wants me to buy it again. Is that FAIR? I already bought it once. Why should I pay for it again. It's mine right?

Posted by:

03 Jan 2020

Lee Brown, if your old softare will run on your new machine, go ahead and use it without paying any extra.
If the old version doesn't run on your new machine, you will need an updated version, so if you pay again, you're not buying the same thing again. The process of producing an updated version (which may involve anything from a few tweaks to a complete rewrite) requires work by a developer. Surely you don't expect that to be done for free.

Posted by:

04 Jan 2020

Bob, you pointed out that "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."

But then you go on to advocate finding "free software for accounting, productivity, image/photo/audio editing, anti-virus, password managers, games and much more."

Bob, using free software, instead of shelling out for commercial products, also costs those same jobs! And free software doesn't even create any of those OTHER jobs that piracy leads to: "lawyers, police, and thieves."

Posted by:

Fred Walton
04 Jan 2020

I don't see any point downloading pirate copies of Microsoft Word when you can legally download and Open Office from Sourceforge free of charge.
Open Office is almost identical to Microsoft office and it will work with MS office files.
Possibly it might not be as good for professional use but for everyday use it is just as good, so why bother stealing.
Using free software does create jobs someone has to develop it and they get paid for doing so from advertising revenue and donations.
Would anyone who opposes the use of free software not watch ITV for the same reason?

Posted by:

04 Jan 2020

Many of the Free Programs are earlier versions of the Premium Software. Yes, they are good and solid, most of the time, but they do not have the latest "tweaks" on the Free Version and usually, nothing is done "automatically", it must be done manually. Neither the company, nor the employees, benefit from the Free Version. It has already been "used" and usually is beyond its expectation.

Then there are the individuals that create software, where this is their livelihood. Nobody truly needs to "pirate" from them. However, they frequently offer a Free Version, which is usually the previous version of their software program.

Off hand, I am thinking of PrivaZer. An excellent program, which has a Free Version and a "Donor" Version. I have not had to purchase a license or give another Donation, since I became a Paid Donor, quite a few years ago. I get my Updates when they are created. many programs from individual programmers do their business this way.

Years ago, I did use pirated software. I still feel to this day the Microsoft has abused their customers by making them pay for the "newest" version, especially it hasn't given them any progress, but are mainly "security updates." Yes, in the early years you could see that there were major changes made to Windows. Nowadays, I don't think so.

The upgrades to Windows 10 are now replacing the New Versions and at this point, do not cost any of us a single penny. It's like any of the Browsers updating or upgrading, it is done quickly and frequently, with no charges involved. When I realized that I was stealing, I changed my ways. However, MS Office is now a subscribing service, instead of "owning" the software but you still need a license or key code.

In essence, nobody has ever really "owned" the software they used and paid for. You only purchased a license or key code. The ownership belongs to the company or the person who created the software.

Posted by:

Stewart Graham
04 Jan 2020

While I totally agree with the basic premise of the article, it has to be noted that this is a 'Two Way Street'.
Cast back to the 1970/80's when the home computer was becoming a household item and most uses for the Atari, Commodore, BBC and Spectrum (in the U.K.) was to play games. When a hit game came out, Motor racing, Karate/Boxing, Platform and the like, within a month or so the market was flooded with clones, some better most worse.
Now are we to believe the many different software houses were working on the same ideas at the same time or was there a bit of underhanded 'reverse engineering' going on with the sole purpose of making money without giving the original programmers credit or a share of the profits. The bottom line of this activity was to sell the clones to Joe Public without doing the work. Many millions in cash was made worldwide from this practice and I doubt the software houses responsible really gave a monkey's about screwing the buyer.
So as said, a two way street and with victims of piracy on both sides.
Sorry about the long rant.

Posted by:

Renaud Olgiati
04 Jan 2020

It may be worth noting that the amount given for "losses due to piracy", usually provided by software makers, is the commercial value of the pirated softwares.
The makers' actual loss is much lower, given that most pirates would never have spent the money on buying their products.

Posted by:

Dave Ruedeman
04 Jan 2020

Two points not mentioned here. What about "abandonware" where the publisher no longer supports or has anything to do the software?

The second point is not technically piracy but it immoral nonetheless. It is when large companies use open-source software and contribute "Nothing" to the developers.

Posted by:

06 Jan 2020

In general, I agree. But hacking and cracking goes way least to the days of flexible floppies (based on my experience). Any company using software needs to pay for it, period. And I think they do. Everyone's opinion on where to draw the line between what should be strictly enforced vs frowned upon will be different, but I think we are about at the right balance today. My personal opinion is anyone making money on cracked software should be hunted and punished. But kids, young adults just starting their careers, poor people, or people just trying stuff out just for the fun of it (like I used to 20 yrs ago) - these people don't need to be paying $2000 to Adobe, or $4000 to AutoDesk, or $10,000 to Dessault or Ansys. And not everybody qualifies for the free routes to their software.

I, for one, am glad there is a vibrant hacking community. I'm personally not talented enough (or I have too many adult responsibilities) to actually crack software. But I'm glad its there. This year I had a company go rogue on me and try to hold my data hostage. I won't say their name, but I've been a multi-CAL paying customer for 15 years. I think I was a paying customer when there may have not been another one on the planet. I've beta tested for them. Provided positive (and occasionally negative) feedback over the years. I'm a big fan - maybe their biggest fan. Well, this year they changed from the perpetual license model to the subscription. When I protested they should at least provide an option, all they said was "sorry". I even sent them a history of all my communication with them - still "...sorry - pay up". I couldn't believe it, so I went up the chain a little, and at least got them to give me a discount (just to get this tiny discount took probably 20 hours of my time). So I bought 1 CAL to try it out. When I read the fine print, it says that if I miss my payment next year, they will lock my ability to open any of my data - even stuff created 10 years ago. I cannot describe in B&W what I felt.

I had never been to the Dark Web before, but this drove me to it. I had to set up a completely separate special purpose PC, learn how to create a Linux bootable USB, and learn about VPNs, then learn how to get around on the Dark Web, and learn about torrenting. After doing all that, I discovered that some hacking group (who are very competitive it turns out), had, in fact cracked the program in question. I downloaded a copy. I haven't used it yet, but by God, just having it gives me great relief. So I'm glad they are there. Just knowing that I have an option (any kind of option), no matter how tenuous, when a company tries to hold me hostage gives me great comfort.

Could we shut all these groups down....sure we could. But I'm glad society hasn't gone all Gestapo or Stasi on them yet. These groups give a lot of very intelligent but under resourced people an option when the only choice a company gives you is "pay up...or else".

Posted by:

07 Jan 2020

I have a different opinion.

1. When I steel something, I deprive the owner from his property. If I steel your wallet you have no wallet (till you buy a new one). When I steel the MS office for example, the company has still the program under his property. So this is not a theft.

2. How much cost a software? Office 2019 Home & Business costs $249.99, but you can legally buy (from for example) Microsoft Office 2019 Professional Plus for Windows PC €32.55. (35$)

Why this variation? I have to suppose that the cost for the company is LESS that 35$ and his profit is about 833% !!!!

So if we buy from a big company his product the company steels us not the contrary.

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