Software Piracy Robs Government Of $255m

Revenue loss to the government on account of software piracy in 1996 is estimated at $255 million.

According to a study released by US-based Business Software Alliance and Software Publishers Association and carried out by International Planning and Research, global software piracy is still rising.

The illegal copying and distribution of computer software increased by 20 per cent last year and accounted for an estimated $11,200 million in lost revenues worldwide, according to the study, which was commissioned by two of the American industrys leading trade associations.

The study found that while piracy rates are declining, the total number of pirated software units continues to grow. Of 523 million new business software applications used globally in 1996, 225 million units nearly one in two were pirated.

 

Eastern Europe had the highest piracy rates (total number of pirated business software applications divided by the total number of business software applications used) with an overall average of 80 per cent while North Americas 28 per cent was the worlds lowest. Western Europe had a piracy rate of 43 per cent, Latin America 68 per cent, Gulf countries and Africa 74 per cent and the Asia Pacific region 55 per cent.

The United States had the lowest piracy rate of any individual nation (27 per cent), but the highest revenue losses an estimated $2,300 million in 1996.

Among regions, the greatest losses in dollar terms occurred in the Asia-Pacific area, with an estimated $3,700 million lost in revenues due to piracy.

Individual countries found to have high piracy rates include Vietnam (99 per cent), China (96 per cent), Oman (95 per cent) and Russia (91 per cent).

It was pointed out that this study covered only business applications. If it had included software designed for military applications, the piracy and revenue losses would be significantly higher.

The piracy rate in Latin America declined from 76 per cent in 1995 to 68 per cent in 1996 with Argentina, Mexico and Brazil making the greatest improvements.

In Asia Pacific, piracy rates declined from 64 per cent in 1995 to 55 per cent in 1996. Singapore showed the largest increase in pirated products for any country mostly in the form of counterfeit CD-ROMs. Among the East European regions, Bulgaria led the region with a 98 per cent rate, largely due to lax enforcement and its emergence as a hub for piracy of CD-ROMs.

All regions showed a decline in piracy rates except North America where it rose marginally from 27 to 28 per cent, the study points out.