Global Software Piracy Rises in 2000

More than one out of three business software applications used last year were illegal copies, used without proper payments being made to software manufacturers, according to an industry watchdog group.

The U.S.-based Business Software Alliance (BSA) issued its sixth annual survey on global software piracy today, saying that the worldwide business software piracy rate increased 1% to 37% last year. It was the first increase in the survey’s history.

The BSA is a watchdog group representing top software makers including Microsoft, Macromedia, Adobe, Autodesk, Lotus and others. Among other things, the BSA investigates reports of illegal corporate software use and works to collect fees for its member companies.

International Planning and Research, an independent research firm, conducted the survey for the BSA.

The latest study evaluated sales data and market information for 85 countries and was based on 26 different business software applications. The study compares 2000 piracy rates and dollars lost to software piracy to similar data gathered between 1994-1999.

According to the results, the monetary losses in 2000 due to piracy amounted to about $11.8 billion, down 3.5% from 1999’s $12.2 billion loss. The majority of the losses (87%) were in North America, Asia/Pacific and Western Europe.

In the United States, the piracy rate declined to 24%, and in Canada the rate dropped three percent to 38%. Monetary losses due to software piracy in the United States rose above $2.6 billion, while in Canada the losses hit $305 million. During the past six years, the North American piracy losses averaged $3.6 billion per year.

“Although the piracy rates in several regions and countries have decreased, software piracy continues to rob the global marketplace of hundreds of thousands of jobs and billions in wages and tax revenues,” said Robert Holleyman, president and CEO of the Washington, D.C.-based BSA.

He added, “In an effort to curb software piracy worldwide, BSA continues to implement educational and enforcement activities and works with governments around the world in support our efforts to address the software piracy problem.”

The latest piracy study come as the BSA marks International Sweeps Week. The BSA said it has settled with 159 corporations worldwide who have agreed to pay a total of $6.2 million for using pirated software.

This week also marks the second annual BSA Sweeps Week in the United States. The group said it has collected $2.5 million in settlements from more than 36 U.S. companies in 16 states and Washington, D.C., for using pirated software. The names of the companies were not announced.

The 10 countries with the highest piracy rates are Vietnam (97 percent), China (94 percent), Indonesia (89 percent), Ukraine/other CIS (89 percent), Russia (88 percent), Lebanon (83 percent), Pakistan (83 percent), Bolivia (81 percent), Qatar (81 percent), and Bahrain (80 percent).

Regional breakdowns included:

Asia/Pacific: This region was the only area where the piracy rate increased in 2000, rising to 51% from 47%. In addition, Asia/Pacific accounted for the largest piracy losses at nearly $4.1 billion or 35%. Japan’s piracy rate increased to 37%, Korea increased to 56% and China increased to 94%. The countries with the highest piracy rates were Vietnam (97%), China (94%) and Indonesia (89%). The countries with the highest dollar losses were Japan ($1.6 billion), China ($1.1 billion) and Korea ($302 million).

Eastern Europe: In 2000, Eastern Europe continued to have the highest piracy rate at 63 percent, leading to a loss of nearly $404 million. Russia and the Ukraine and other CIS countries continue to have the highest piracy rates in this region, with 88% and 89%, respectively. Poland, the third largest country in the region, reduced its piracy rate from 1999 to 2000 by 6% to 54%.

Western Europe: At 34%, Western Europe continued to be the region with the second lowest piracy rate in 2000, but it experienced the second highest dollar losses, hitting $3.1 billion. This amount accounts for 26% of the total global losses due to software piracy. Western Europe was the region with the smallest change in its piracy rate from 1999. The largest dollar losses due to software piracy occurred in Germany ($635 million), United Kingdom ($530 million) and France ($480 million).

The highest piracy rates were in Greece (66%), Spain (51%) and Italy (46%). This is the third consecutive year Greece and Spain had the highest software piracy rates in Western Europe.

Latin America: While the Latin American region saw a decline in its piracy rate from 1999 to 2000, it became the second highest region in 2000, with a piracy rate of 58%, ahead of the Middle East at 57%. Latin America piracy cost the industry $870 million. The countries with the highest piracy rates were Bolivia (81%), El Salvador (79%) and Nicaragua (78%).

Once again, at 49%, Chile was the country with the lowest piracy rate in Latin America. Brazil and Mexico, the two largest economies in the region, saw a constant piracy rate, with no change between 1999 and 2000. Their current rates are 58% and 56%, respectively. Argentina, the third largest economy in the region, was also at 58%.

Middle East & Africa: In 2000, the Middle East and Africa had the third highest piracy rate at 55%. The countries with the highest software piracy rates were Lebanon (83%), Qatar (81%) and both Bahrain and Kuwait (80%). Software piracy costs this region $376 million. The three largest economies in the Middle East, Turkey, Israel and Saudi Arabia, each saw a decline in the piracy rate last year. Turkey experienced the largest reduction in piracy, from 74% in 1999 to 63% in 2000.

Israel had the lowest piracy rate in the region (41%). Saudi Arabias piracy rate declined from 64 percent in 1999 to 59% in 2000. Africa’s piracy was 52%, down from 56% in 1999. A falling piracy rate with a strong economy indicates a long-lasting decline in piracy and a more substantial change in software practices.

North America: The North American region continued to be the region with the lowest piracy rate at 25%. During the past six years, the region’s piracy rate has declined from 32% to 25%. In the 2000 study, North America accounted for the third highest piracy losses totaling $2.9 billion. Asia/Pacific and Western Europe exceeded North America with losses totaling more than $4.1 billion and $3.1 billion, respectively.

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