Discuss how software piracy impacts individuals, software companies, and society.
In addition to the legality of software piracy, the cost to the industry is several billion dollars in lost revenue and lost jobs (Khadka, 2015). The impact is staggering, considering that lost jobs due to decreased revenue in companies raise the national unemployment rate. Additionally, since this software is unlicensed and unpaid, the government is also losing out on billions of dollars in taxes. This lost tax revenue decreases the government’s ability to fund infrastructure, and programs (Khadka, 2015). The obvious impact to individuals is the lost jobs, but there could also be other costs should the participants in software piracy be caught, they could face fines, lawsuits, and even jail time depending on the significance of their piracy.
Identify an online article from a magazine or newspaper (the article you identify cannot be already used by your classmates) about the (existing or potential) consequence of a certain software piracy incident, and discuss what could be done (or could have been done) to avoid the negative consequences.
I am sure I could have located a more recent article, but this article truly caught my eye. In 2015, 6 men were arrested and reached a plea bargain surrounding one of the largest piracy schemes in history. The piracy ring was centered around selling more than 170,000 copies of Adobe and Microsoft programs utilizing stolen registration codes through legitimate sites such as Overstock, Amazon, and eBay (Greenberg, 2015). Although the first link in the supply chain has been found and prosecuted, the origins of the suppliers are still unknown as multiple sources are traced back to China, Germany, and Singapore. Although Microsoft and Adobe had the ability to flag potential duplicate uses of some registration codes, unknowing purchases could contact the seller and they would supply another stolen code. In addition to the lost revenue of the software companies, this ring also caused lost revenue to the third-party retailers they used to sell the codes as they negotiated lower fees which resulted in decreased commissions (Greenberg, 2015). The question must be raised as to how so many valid registration codes were able to be obtained by this group? Even if they had another supply layer filtering offshore, someone is validating these stolen codes. Researchers suggest that Adobe and Microsoft look in house to review the security within their supply chain. If there are any gaps in encryption or data transmission, this could be the original source of stolen registration codes.
In this instance, tighter in-house security and encryption from Microsoft and Adobe could have prevented the codes from being stolen. Additionally, it would be wise for both of the companies to examine and gaps or leaks in their supply chain that would indicate an employee sharing proprietary information outside of the company. The article indicates that the codes are often presented on a Word or Excel doc. If this is the case, the software companies may want to consider monitoring programs for their staff computers. Exposing and closing these leaks would reduce the lost revenue to these companies.
Greenberg, A. (2015). 6 men admit to running a global $100M software piracy ring. Wired. Retrieved from https://www.wired.com/2015/12/6-men-admit-to-running-a-giant-100m-software-piracy-ring/
Khadka, I. (2015). Software piracy: A study of causes, effects and preventive measures. Helsinki Metropolia University of Applied Sciences. Retrieved from https://www.theseus.fi/bitstream/handle/10024/87274/Khadka_Ishwor.pdf