Group F
Singapore Sting
Software piracy is a problem around the world, but in Asia it seems particularly prevalent. Software pirates, individuals and organizations that make illegal copies of software, can make a fortune. Individuals buying the pirated software can save hundreds of thousands of dollars by purchasing illegally copied software. With the increased use of CD-ROMs on personal computers and the ability to inexpensively duplicate CD-ROMs, the problem of pirated software is becoming more and more difficult. In his article, Singapore Sting, Richard Rapaport explores the problem of software piracy. He describes his visit to Singapore and introduces us to the corporate security adviser contracted by Microsoft, Alan Solomon. By participating in several raids organized against pirate software shops and businesses that profit from selling illegal software, he portraits the problem of intellectual property protection as it exists in Asia.
Although Singapore has the lowest rate of software piracy, it is still one of the "pet-projects" of pirate-hunters. "Its squeaky clean reputation, its position as the most computer-literate society in the area, and a growing indigenous software industry makes Singapore a key battleground in the struggle for the hearts and minds of Asian technology consumers who have little respect for or understanding of the notion of intellectual property" (Rapaport). During the arrest of Mr. Chang, the owner of a pirate software shop, he says that everyone does it. This sort of excuse can be readily heard not only in Singapore, but also here in the United States. Singapore's government holds a fairly ambiguous position on privacy. Because of this many people feel the same way towards software piracy as Mr. Chang. For example, a software producer must invest resources to privately investigate piracy in order to make the government of Singapore get involved.
"Operations of the pirate software shops are far too consistent to be coincidental," says Rapaport. All of these software shops have almost the same physical set up and sell the same program compilations in similar packages. A former Singaporean policeman, who is currently a licensing manager for Novell Asia Pacific, Mr. Weiming Chua, states that all of the facts indicate that software piracy is a well organized black-business market with manufacturing sites all over Asia. The software piracy industry also sells shared technology and marketing information. Software pirates are also linked together through a well-organized network. During the raid at P&V, Alan Solomon was informed that other owners of stores selling pirated software have just closed up.
Blank CD-ROM disks can be purchased for a few dollars. Software pirates can fill the disks with software and sell a CD-ROM disk for $10 to $20 on average. What can someone get for $10 to $20? With a capacity of about 650 megabytes, it is possible to cram over 30 programs onto a single CD-ROM disk. Popular software often copied illegally onto a CD-ROM disk include Windows 95, Office 97, Adobe Photoshop, ClarisWorks, Corel Draw, Netscape Navigator, Norton Utilities, After Dark, AutoCAD, Lotus Notes, and much, much more. For less than $20, it is possible to buy thousands of dollars worth of the latest software.
Statistics from the Software Publishers Association and the Business Software Alliance indicate that the piracy rate in Singapore is about 53%. In other words, only 47% of software purchased in Singapore is legal and not pirated. The piracy rate in other countries is even higher. In Malaysia, it is expected to be about 77%. The piracy rate for Thailand is estimated to be 82%, and in the Philippines, it is expected to be 91%. China also has a high piracy rate of about 96%. Indonesia has a piracy rate that is estimated to be 98%. These staggering piracy rates have resulted in millions of dollars of lost revenue for software companies, primarily located in the United States.
In addition to pirated software on floppy and CD-ROM disks, some software pirates are placing illegal copies of software (application and operating system software) directly on hard disks. These hard disks are then sold to computer manufacturers, who install the hard disks and illegally obtained software into their personal computers. The PCs are inexpensive and come fully equipped with the latest and most expensive software available.
While most software piracy operations occur at small stores, the operations are likely more organized and centrally coordinated. Small storefronts in shopping malls and business centers often offer the same types of software bundles on a CD-ROM disk. The packaging is also identical in most cases. Individuals who are deep in debt or have previous criminal records typically run the small stores selling pirated software. In most cases, they are hired and financed by piracy operators that are less visible and more difficult to catch. The managers of the piracy stores are typically "fall guys." They are well paid, not only to sell illegal software, but also to go to jail if they are caught to protect their more wealthy bosses. The bosses often pay "fall guys" thousands of dollars each week to run the piracy stores. The payments continue if the store manager is caught and goes to jail. The store manager's family is also taken care of if the manager has to do jail time, which can be a few months. The potential for high incomes compared to other jobs in Asia means that there is no lack of people that want to be fall guys, even if it means going to jail repeatedly. To them, the money is worth it.
What is being done to help prevent piracy internationally? Most countries have laws and enforcement officials to seek out software pirates. But the efforts seem too little to prevent or deter the huge market for pirated software. People in some countries, including law enforcement officials, believe that software piracy is not unethical or even socially wrong. Furthermore, some officials may welcome piracy because few individuals would otherwise be able to pay the full retail price of the software they need. As a result, software companies and associations, primarily from the United States, have efforts in these countries to stop software piracy. Microsoft, for example, has people in Asia to hunt down and shut down software pirates. Because the culture of many Asian countries seems to tolerate software piracy, the problem is likely to continue.