Microsoft and consumers take action against global software piracy

Microsoft has announced a surge of voluntary reports – more than a 150,000 – from consumers who unknowingly purchased counterfeit software and found it riddled with viruses or malware. This increase, triple the amount of previous records, reflects consumers’ growing concern for the harm caused by counterfeit software and Microsoft’s efforts to give consumers a voice in the fight against software counterfeiting.


In response, Microsoft today announced a surge of its own, ‘Consumer Action Day’, a simultaneous launch of education initiatives and enforcement actions in more than 70 countries to protect consumers and increase awareness of the risks of counterfeit software.

“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. “Consumers who are duped by fraudulent software encounter viruses, lose personal information, risk having their identities stolen and waste valuable time and money. Today’s announcement demonstrates our commitment to working with others, including our partners, government agencies, and NGOs, to protect people from the ill effects of counterfeit software.”

The software industry has long studied the black market for pirated software and its effects on consumers. One seminal study by IDC in 2006 showed that one in four Web sites offering counterfeit software attempted to install unwanted or malicious code upon downloading. This rate is rising, as found by Media Surveillance, an anti-piracy solutions company based in Germany, when it recently downloaded several hundred pirated copies of Windows and hacks and found that 32% contained malicious code. The IDC report also described a review of counterfeit Microsoft software purchased at resellers in 17 countries: more than 50 percent contained phony code, had malware, or could not even be installed. And, just two months ago, the BSA October 2009 Internet Piracy Report showed countries with high piracy rates often have high malware infection rates.

As part of Consumer Action Day, more than 70 countries are launching educational initiatives and enforcement actions to protect consumers from counterfeit software. Highlights include 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 medium businesses in Argentina.

The effects of malware can range from annoying advertisements to a severe breach of information security. In a recent Harrison Group study, it was 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.
Thai consumers speak out

Moreover, most people simply find themselves without the software they thought they were paying for. Unable to get a refund from the dealer, consumers end up having to purchase the product all over again.

“I didn’t want to face any security problems and knew that if I used genuine software I would get good support, not only in terms of security and patches, but also the latest updates for new programs and applications which are important to me,” said Patranun Limudomporn, a student from the Faculty of Political Science at Chulalongkorn University and one of the first people to buy Windows 7 at the Thailand launch event at Siam Paragon. “I think more people in Thailand are starting to understand the risks of pirated software and many of my friends have told me of times when they’ve experienced difficulties after using cheap fake software. For example, the installation often does not reach 100% or they experience black screens and no option to update security patches. For me, I only have one PC to rely on so these problems make the risk of using pirated software too high.”

Worse yet, today’s counterfeiters are often large criminal syndicates that don’t stop at distributing hundreds of copies of unlicensed software. “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. In just one recent example, software pirates helped create a Botnet army by offering a phony version of Windows, rife with malicious code, which compromised PCs and then ordered them to connect to a server controlled by cyber-criminals.

To address the increasing sophistication of software counterfeiters, Microsoft is enhancing its anti-piracy work on all three fronts: education, engineering and enforcement. Today’s actions around the world emphasize the company’s growing commitment to protect consumers. Tips from customers and partners are vital in helping law Microsoft address piracy. Microsoft encourages users who suspect they have been sold a pirated copy of Microsoft software to contact the Microsoft Customer Contact Center by calling 02-263-6888. For the latest information about genuine Microsoft products, licensing and labels, Thai consumers are advised to visit www.microsoft.com/thailand/genuine/howtotell.aspx.

On the engineering front, Microsoft has improved the product activation and validation process with Windows 7. Windows Activation Technologies in Windows 7 are built off our Software Protection Platform introduced with Windows Vista, which enabled Windows to protect itself by detecting when attempts have been made to circumvent or tamper with built-in product activation technology and helped customers more easily activate the product and resolve potential issues. Windows 7 includes the latest generation of this technology, including changes we have made so users will see more informative notification messages and be able to more easily complete the steps in the process.

And, when it comes to enforcement, Microsoft has invested in nine Product Identification (PID) Analysis Labs around the world. Forensic experts in these labs use sophisticated tools, such as digital disc fingerprinting and optical manufacturing tracking, to examine counterfeit software and provide critical information to local law enforcement agencies to use in their pursuit of criminal software counterfeiting syndicates. The results are tangible and impactful: Microsoft’s work in its PID Analysis Labs has led to more than 1,000 customs border patrol seizures of counterfeit software in just over two years.

“The global problem of counterfeit software calls for an international response and a strategy which targets sophisticated crime syndicates taking advantage of unwary consumers,” said Kunio Mikuriya, Secretary General, World Customs Organization. “Through vigilance and active feedback to public institutions and companies like Microsoft, consumers and businesses will be instrumental in overcoming this problem. The serious economic consequences generated by this illicit trade make it imperative that we urgently pool our efforts, strengths and expertise to fight this crime.”