Software Piracy and What the BSA Wants You To Believe

The online version of Financial Kathimerini includes on May 23 2006 an article that is roughly translated to English below:

Greece first in software piracy in EU, with a percentage of 64% in 2005

Greece remains for another year in the first place of countries where pirated software is used in EU, with a percentage of piracy of 64%, as announced by Business Software Alliance. According to the world-wide research of IDC for 2005, 35% of the software installed in 2005 was illegally copied.

In Greece, the percentage of illegally copied software was 64%, resulting in economic loses of about 125 million euro. Ranking first, for the third consecutive year, among the countries of the expanded EU, Greece has failed to reduce the percentage of pirated software installations; Greece and Turkey are the only countries which have a piracy percentage of more than 50%, according to the BSA.

The 2% percentage increase of Greece is much higher than the average percentage of the EU countries (which is 28%). It even exceeds the average of Middle East countries.

Mrs. Archontoula Papapanagiotou, a legal advisor and representative of the BSA in Greece, commenting on the results of the study, noted that: “As citizens, we must stand with greater responsibility against software piracy and understand that intellectual property affects many aspects of our lives, both at home and work. The percentage of software piracy in Greece indicates that a great deal of our lives is exposed to the dangers inherent in pirated software”.

“Moreover, the Greek state has to concentrate immediately in more strict efforts to fight software piracy and protect intellectual property. Actions must be taken that will contribute in major ways to the economic growth of the country and create new job positions. It is sad and embarrassing for our country, the place where civilization was born, to be first-ranking today among those offending intellectual property rights”, emphasized Mrs. Papapanagiotou.

The study was conducted in 97 countries. Almost half of them (51) were the ones where a decrease in software piracy was noted, and only in 19 of these countries a percentage increase was found. The world percentage of software piracy did not change much between 2004 and 2005, as advanced markets like the USA, western Europe, Japan and certain Asian countries dominate the software market, keeping the world’s average percentage of software piracy almost unchanged.

“The progress that has been made in fighting software piracy in many of the developing markets is encouraging”, stated Robert Holleyman, the president and CEO of BSA. “Nevertheless, more than a third of the copies of software installed in 2005 has been illegally obtained and this means we have to increase our efforts to fight software piracy around the globe”.

A decrease in software piracy was noted in 19 of the 26 Middle-East and African countries which were included in the study, with a percentage decrease of 2% or more in 12 of them. In Central and Eastern Europe, software piracy has seen a decrease in 15 out of 18 countries studied today.

Positive changes have also been noticed in developing countries like, Russia, India and China. Most importantly, in China and Russia the percentage decrease for pirated software was 4%, while India’s percentage was 2% less than 2004.

The total, worldwide profit losses caused by software piracy are estimated to $34 billion, including an increase of around $1.6 billion from 2004. In countries with large software industries, the relatively low percentage of software piracy may still incur severe loses. For example, in the United States, which have the lowest percentage of software piracy (21%), the losses were estimated at $6.9 billion. The countries with the greatest losses caused by software piracy are China (with an estimate loss of $3.9 billion, and a piracy percentage of 86%), France (with an estimate loss of $3.2 billion and a piracy percentage of 47%).

Among other things, the IDC study showed that:

  • The greatest decrease in software piracy was achieved in China (4%), Russia (4%), Ukraine (6%) and Morocco (4%).
  • The countries with the largest software piracy percentage in the world are: Vietnam (90%), Zimbabwe (90%), Indonesia (87%), China (86%) and Pakistan (86%).
  • The countries with the smallest percentage of software piracy are: the USA (21%), New Zealand (23%), Austria (26%) and Finland (26%).

The results of a previous study of IDC/BSA showed that the if the worldwide percentage of software piracy was decreased by 10% and reached 25%, this change would offer 2.4 million new job positions, resulting in profits of $400 billion for economic growth and $67 billion in taxes. In Greece, estimates show that a 10% decrease of software piracy would result in profits of 351 million euro for the country’s economic growth, will create 1.300 new job positions and will increase the income of the local software industry by 223 billion euro.

Business Software Alliance represents the software industry and the affiliated hardware vendors. BSA has been active in Greece since 1992, aiming at informing and protecting the general public from illegal uses of software. Members of BSA are companies like Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CNC Software/Mastercam, Internet Security Systems, Macromedia McAfee, Microsoft, PTC, SolidWorks, Sybase, Symantec, The MathWorks and UGS. Members of BSA Hellas are the companies ALTEC ΑΒΕΕ, Anodos Inc., AutoDesk Hellas, Singular Software, Infoquest AΕΒΕ, Microsoft Hellas AEBE, Pouliades & Associates AEBE, Rainbow Computer Inc, Sunsoft EPE, Syntax Pliroforiki AE, Τopnet Solutions A.E.

Reading stuff like this in the mainstream media, makes me wonder if people are really buying the very thinly veiled threats for a reign of terror which BSA is trying to establish with announcements like these.

Pseudo-scientific Studies are Not Very Useful

There is certainly a pseudo-scientific aura around the article, mostly due to the spurious, liberal use of words like “study” or “research”. Posting announcements in a casual, leisurely manner is not exactly a scientific manner of proving one’s point though — even if the announcement is made in mainstream media (especially if the announcement is made through mainstream media). Unfortunately for BSA’s spokesmen and spokeswomen, sprinkling a page of text with percentages and using fancy words is not a good way to make a point that can stand even the most minute of criticisms. This is exactly what the translated text above tries to do though. Through a torrent of percentage numbers, we are supposed to believe that BSA has studies software piracy around the entire globe and has magically come up with how many of us are thieves. So, in their uncorrupt, glistening, white software-saint robes, they throw these unsupported numbers at our faces, to prove that 1/3 of all humankind are treacherous fools, who keep the entire world from going forward (see uses of the words “progress” and “growth” near the end of the article), and here’s our numbers to prove this.

As usual, there is absolutely no information about where and how BSA got hold of these numbers. Their pseudo-scientific “research” can only be considered yet another track-load of unsupported rumours, until they clearly and transparently describe the exact method of gathering the dataset for their statistics, so that another, independent organization can also repeat the same research. That’s the only way a claim can move from the huge, gray area of “bullshit” to the rigidly controlled, reproducible, logically sound region of “scientific research”. BSA has not done this, I’m afraid, so their numbers should not be considered as scientifically sound proof of the widespread use of pirated software around the world, until they clearly provide all the research details for everyone to see and judge for themselves.

Dangers of Pirated Software

Part of the statement of Mrs. Archontoula Papapanagiotou includes:

“The percentage of software piracy in Greece indicates that a great deal of our lives is exposed to the dangers inherent in pirated software.”

I agree that illegally copied software does pose a threat wherever it is used. This is true because the “cracked” versions of legal software many people use may have, in general, two sorts of problems:

  • Problems that are also present in the original, uncracked copies.
  • Problems that are the result of the changes made while “cracking” the software.

This is probably the only point where I can whole-heartedly agree with what has been stated by the BSA. Software that is obtained legally, through a well-known, verifiable source, may still have problems. These problems are either bugs that the vendor knows about, or bugs that are new. In either case, the legitimate user of software can (normally) ask for support from their vendor and there should be documented ways of obtaining this sort of support. Usually, there are.

So, there are valid reasons why you shouldn’t use pirated software. These reasons are, in short:

  • Illegally “cracked” software may have problems that are unique to the cracked version, not present to legally obtained, official copies.
  • By using pirated software, you are forfeiting your right to ask for and obtain support.

The rest of the published statements include a great deal of stuff that I do not agree at all with, though.

Non-sequiturs Are Fun but Useless

The most important problems with the BSA “study” shown above is that is contains several non-sequiturs — all of them posing as genuine arguments against software piracy, while they are really nothing more than hogwash. The ones I could easily spot are:

  • Buying legal software copies = more job positions will be created
  • In Greece pirated software is used = loses of 125 million euro
  • Fighting software piracy = economic growth of Greece

1. The first of those assertions is blatantly false for several reasons. BSA wants you to believe that buying software will somehow, for some curiously magical reason, generate new job positions for some sort of people. I’m not sure if this is the right kind of people the BSA had in mind when they fell for this fallacy, but let us assume for a moment that they refer to new job positions in the software industry. How exactly is that going to happen?

Remember that we are interested about software that is actively being pirated today. This means that this particular piece of software has already gone through the stages of development, testing, quality assurance, it has been sold to some customers and eventually ended up being illegally copied by some other user. Since all the people involved in its production, sales, marketing and customer support are already there and they do have a job, why is it so obvious that having more users pay for it will instantly create new jobs? What sort of jobs would these new ones be? I am really not so sure. BSA seems to be convinced and certain about it though. So much that they feel confident to use these “new jobs” as the basis of one of their arguments against software piracy.

2. The second thing that I immediately noticed and recognized as pretty naive, if not deliberately designed to trick the reader into believing something false — which would be far more evil and unforgivable in an article appearing in mainstream press —, is the sentence:

In Greece, the percentage of illegally copied software was 64%, resulting in economic loses of about 125 million euro.

I don’t know if this is quoted literally from something the BSA has written, since it doesn’t look to be a quotation in the original article. Whoever wrote this seems to imply that this is, somehow, a reasonable estimate for the software people would buy and pay for if they were not copying software illegally. Since there is no evidence that shows how, why or when this conclusion was reached, I’m afraid it’s quite impossible to check the validity of this amount of money. Has anyone really done a valid, documented, legally sound research that the exact number of software pirating users are “N”, and then somehow derived from this number of “N users” the real number of users who would still use the same software if it cost them major money, finally coming up with the 125 million euro estimate? Where is all the evidence that supports this particular figure (or any other number in the article, for that matter)?

3. A third part, related to Greece like (1), which I find totally absurd is:

“Moreover, the Greek state has to concentrate immediately in more strict efforts to fight software piracy and protect intellectual property. Actions must be taken that will contribute in major ways to the economic growth of the country and create new job positions. […]” emphasized Mrs. Papapanagiotou.

I do agree that the Greek state has to support anti-piracy movements, that it has to support the use of free software alternatives, that it has to keep struggling for open formats, open standards, to fund research and aim for a high level of innovation happening in the academic, corporate and public sectors. I just don’t see how all this is related to the agenda of BSA, which is still trying to convince us that the distribution and use of pirated software is somehow related to the number of jobs available in Greece right now or in the future. I also don’t see how spending more money will contribute to the economic growth of a country that already owes a hell of a lot of money. But I am not an expert economist. Perhaps the BSA know better than me, and spending enormous amounts of money for software licenses is going to get Greece out of its debts. For some reason, I really don’t think so.

On the other hand, concentrating on fighting software piracy by using free software whenever possible, I think will have a greater, far-reaching effect in the economy of Greece, which as a country, as a whole, already spends hilarious amounts of money for software licensing costs.

More Absurdities & Unsupported Claims

Then I read the entire article more carefully. This revealed a magnificent amount of things that range from mildly silly to outrageously absurd:

  • Civilization was born in Greece, we cannot be pirates.
  • The total, worldwide profit losses caused by software piracy are estimated to $34 billion
  • If worldwide percentage of software piracy is decreased by 10% and reaches 25%, this change will offer 2.4 million new job positions
  • This will also result in profits of $400 billion for economic growth and $67 billion in taxes
  • In Greece, a similar decrease of 10% will result in profits of 351 million euro for the country’s economic growth
  • It will also create 1.300 new job positions
  • It will increase the income of the local software industry by 223 billion euro

I find it very obvious why these claims are either blatantly false or just unsupported FUD, but they may sound convincing to some people, so it is important to see why and where they fail:

1. “It is sad and embarrassing for our country, the place where civilization was born, to be first-ranking today among those offending intellectual property rights”, emphasized Mrs. Papapanagiotou.

First of all, let me say: I agree that, if there was any way to verify the claims of BSA about the huge list of percentages they claim as results of their “research”, ranking high on such a list is sad and embarrassing. Before we let our feeling of grief overtake us though, we must honestly ask ourselves. What other source do we have for verifying these claims, apart from BSA? If we don’t, then how do we know that the numbers aren’t just fantasies conjectured out of thin air by someone in BSA who has an agenda to push for? If the numbers they published are not true, then how do we know our position is really the one BSA wants us to believe it is?

Most importantly, what sort of twisted logic is the one that assumes civilization was “born” in Greece. It is one thing to state that Greece has contributed to the current civilization and a very different thing altogether to claim that “civilization was born” in Greece. Anyone who descends from people who were only slightly if at all affected by Greece, anyone who also descends from other great civilizations who have paved their way through history conquering new scientific fields, opening new pathways for the advancement of human knowledge and offering in their own way — much like the Greeks have done too — would be rightfully offended and angered by this single statement. Why do we have to believe that this ethnocentric statement, bordering on the verge of racism, somehow means that Greeks are the holier than thou people who are not pirating software? Sure they are doing this. Sure they can. Like everyone else, I guess…

The important thing is not to find out why Greeks, who are “magically” more civilized than others, are seduced by software piracy. What is really important is to find out why software piracy still finds its way into Greece, to find out the real causes of software piracy and then strike at those.

2. The total, worldwide profit losses caused by software piracy are estimated to $34 billion

More “magic numbers”. No hint at what the actual source of these number is.

We are supposed to trust BSA that it is telling us the truth, and that they have somehow divined — perhaps using mind-reading techniques, or some other elite trick — how many of the users who are currently installing pirated, illegally obtained copies of software would honestly still want to use the same overpriced piece of software and truly pay for it.

Tricky, isn’t it?

3. If worldwide percentage of software piracy is decreased by 10% and reaches 25%, this change will offer 2.4 million new job positions

2.4 million new job positions is a lot. A great, thrilling number of new jobs.

Why and how would this be related to the current number of users who install pirated software, though?

Are we supposed to believe that the same people who lack the exuberant amount of cash necessary to buy expensive software today, will somehow just “get a job” when they spend more money than they can afford on software licensing costs? Why?

4. This will also result in profits of $400 billion for economic growth and $67 billion in taxes

Even more “magic numbers”. Where did those $400 come from? Even if we do believe that the total profit loss is $34 billion, then the 10% of this is $340 million, which is way lower than $400 million. Is the BSA rounding numbers to make them “easy to remember” here? Have they also rounded other numbers of the same study? Do they always round numbers upwards, to make things sound worse than they really are?

These are just a few of the questions that may spring from such a seemingly innocent statement. I don’t think they are easy to answer. I am also reluctant to think that they increase my tendency to accept whatever BSA-inspired statements have to say. If they can cook numbers to exaggerate about the profit gains of stopping software piracy, they can also exaggerate a lot about the alleged percentage of software piracy they have “discovered” through “research”.

Another important aspect of this particular statement reveals a much more sinister characteristic of what the BSA spreads around. Their goal is, in this case, not to help people use safer, more robust software, but to increase taxes. Now, it is obvious that government offices and the state depend on a certain amount of taxes for keeping a steady flow of incoming money. This is not strange, and is acceptable in most of the developed world today. But does this solve the problem at hand, in any way? The original problem — the fact that users choose to copy software illegally, because they cannot afford the already overpriced stuff they would have to buy otherwise — is not going to be solved by adding more taxes on top of what we have today. I’m completely astonished at the way BSA suggests that more taxes and about $400 billion more money spent on software would solve this problem. No, I’m afraid that’s not a solution.

Free software, on the other hand, is a solution. It does not encourage piracy, because it is freely available. It does not cost $400 billion, because it is freely available. More importantly, if the state itself uses free software, it doesn’t have to charge everybody else with $67 billion, to pay for the cost of the software it uses!

5. In Greece, a similar decrease of 10% will result in profits of 351 million euro for the country’s economic growth

I can even begin to enumerate the reasons why this looks like a statement pulled off some magician’s hat.

First of all, the total loss from illegally copied software in Greece, if we are to believe the statements of BSA itself, was 125 million. Near the beginning of the same article, we can read:

“… In Greece, the percentage of illegally copied software was 64%, resulting in economic loses of about 125 million euro …”

If this profit loss of 125 million was reduced by 10%, how on earth would the money we gain suddenly raise from 12.5 million to 351 million euro? Or are we supposed, yet again, to believe that BSA is only slightly exaggerating to round up the numbers to the closest convenient figure? Is this a joke or something?

6. It will also create 1.300 new job positions

Keep the magic numbers coming! Please!!!

There is no need to actually explain what these 1.300 new jobs will be. We can all guess, because we are all expert economists, expert software industry professionals, so no explanation is really necessary.

There is absolutely no reason at all to believe that by selling several thousand more licenses, the companies that produce software will suddenly start hiring more people. They don’t need those extra people. They already have their development, testing, quality assurance, sales, marketing, and support teams in place, because they have already: finished developing the software versions that are on sale, they have already sold several thousand copies, they already support their legitimate users, etc. and so on.

I’m not sure why BSA wants us to believe the companies will start investing more money on hiring people just because they sold a few more copies. This is not the way companies work. They are not charity, not-for-profit organizations. They will probably try to cover the extra users with their existing infrastructure and only if this proves difficult will they actually hire new people.

So spare us the guesswork, BSA, please…

7. It will increase the income of the local software industry by 223 billion euro

This is strange, indeed. I repeat a quote straight from the BSA “study”, which was included in the article of Kathimerini:

“In Greece, the percentage of illegally copied software was 64%, resulting in economic loses of about 125 million euro.”

The profit losses from software piracy in Greece alone were 125 million euro, if we are to believe what BSA says. How does this end up being a source of income that can easily generate 223 billion euro? This is almost 20 times higher than the current losses. Even if everyone in Greece suddenly decided to throw away all their illegal copies of software and buy the “real thing” from a software vendor, this would probably generate profits of 125 million. Where do the other 234,875 million come from?

Is this yet another attempt from BSA to impress us by its magical ability to conjure numbers out of their magical hats?

Why Free Software is a Better Answer

What BSA fails spectacularly to mention is that all their rants and FUD about “huge losses” is that all their fancy statements about software pirates, thieving crooks who are being a huge impediment to “progress” and “growth”, all their rhetoric is useless and meaningless when applied to free software.

Nobody can label you a pirate for using free software; it is freely available for anyone to use, after all.

Nobody can accuse you about stopping progress if you are using free software. The entire Internet today runs and is supported by free software, like Linux, the BSD systems (FreeBSD, NetBSD, OpenBSD and DragonflyBSD), Apache, BIND, and many others.

Academic research can use free software without limitations. It is only free software that really allows people to share their research findings without limits, to co-operate without the constant slow-down and cost in time, money and people that some times results from the lack of proper software, proper licenses for that software or resources for training people in expensive vendor-based courses every time a new version comes out.

Most importantly, the citizens and public sector of government offices can also benefit immensely by using free software.

The sort of software BSA really evangelizes is closed, proprietary, it carries along a multitude of patents, licenses, non-disclosure agreements, and all sorts of hidden immediate or long-term costs. It is hard to make this sort of software available for all citizens of a country, without paying huge amounts of money.

In direct and vivid contrast to this, free software is available freely for everyone. By supporting and using free software everyone can search for, locate, read and share documents and publications of the government, official texts of the state, without being constantly afraid of being labelled a “pirate” or “thief”. This is beneficial for both the state and its citizens too. In free countries, where all the citizens can access, read, share and openly discuss the public, official documents of the state, both the citizens and the state have chances to improve, be educated, informed about their rights, their responsibilities and the plans for future growth.

Free software allows all this. Free software makes all this possible.

Why Does BSA Fail to Mention Free Software?

Having said all that, it is truly amazing that BSA (or the media) fail to mention free software when software piracy issues are presented. I can only think of two possible explanations:

  • They don’t know about free software, what it stands for and what it offers
  • They do know about free software, but their sponsors don’t want people to know about it.

In the first case, which is the smaller evil of the two, we can only suggest that BSA does its homework better the next time. They shouldn’t spread FUD as liberally as they do until now, but they should really strive to prevent software piracy by presenting all the options a software user has.

In the second case, I don’t think there is anything we as end-users of software products can do, other than dismiss all the FUD of BSA as useless ranting aimed solely at gathering more money for their sponsors. As much as they would like the public to believe that they are the Software Anti-Piracy Knights in Shining-Armor who protect everybody’s well-being, who fight against the thieving, scheming, treacherous pirates, they are nothing more than an extension of the marketing department of particular companies.

Regardless of what the truth behind all the BSA rants is, everyone should know that an alternative to using illegally copied software does exist, here, now, today; it is called free software. Software that has no strings attached; software that provides most of the features of pirated software, and even more; software that can support and does support large portions of the largest network ever, the Internet; software that liberates and empowers the user; software that does not limit, lock-into particular vendors or even versions; software that does not threaten our security, our financial prosperity; software that — as a result of being free — encourages, promotes, makes possible, supports and creates innovation, progress, and co-operation; software that — because it is free — does not cost immense amounts of money and does not put a huge strain on developing countries; software that is open for everyone to review, improve, extend and customize, without limits; software that can create development, support, education-related jobs; software that is documented, extensible, customizable, tunable, but above all…

Software that is free as in freedom!

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5 Responses to Software Piracy and What the BSA Wants You To Believe

  1. Doc says:

    Σε περίπτωση που δεν το είδες: http://arstechnica.com/news.ars/post/20060523-6891.html

  2. keramida says:

    Thanks Doc :-)

    One of the comments in the discussion of that Ars-Technica article clearly states what I also mentioned about lock-in in general and government lock-in in particular.

    [arstechnica comment here]

    I’m really glad I am not the only one who is very suspicious of the numbers thrown haphazardly around by BSA :-)

  3. anonymus says:

    > As usual, there is absolutely no information
    > about where and how BSA got hold of these numbers
    go to http://www.bsa.org, then select usa as a country. You will find a link to the pdf of the study. They tell us a lot about their methods there.

    please take the time to read it. I did a quick reading and I still agree with your intuition that a lot of what they say is bullshit. You can use their own words to fight them better.

    PS
    Just my 2 cents: your intuition was good this time but it wont be good every time – a minimum research to find more data will help you a lot

  4. keramida says:

    Good point. Thanks :)

    I’m downloading the pdf document now, and I’ll see what comes out of this

  5. knighttemplargr says:

    Φίλε είσαι απίστευτος… Αυτό το άρθρο πραγματικά πρέπει να σου πήρε πολύ χρόνο. Συμφωνώ ως επί το πλείστον με τις θέσεις σου. Συνέχισε έτσι.

    Πιστεύω πως έχω πετύχει το όνομα σου σε free software αλλά ειλικρινά μου διαφεύγει. Μήπως σε μεταφράσεις;

Comments are closed.