Microsoft to Get Tough on License Dodgers

An anonymous reader writes "PC Advisor reports that Microsoft is going to start getting tough with certain small business customers. They are going to examine their small customer license database — any discrepancies and it will call you for an audit. If you refuse it will send in the BSA and the legal heavies. "

Comments

oh yeah

[User 956]

PC Advisor reports that Microsoft is going to start getting tough with certain small business customers.

They're starting with the small ones, because we all know what would happen if they started with the big ones.

Gets Tough?

[Adambomb]

Initial notice, followed by three written notices prior to any intrusive action? I'm sorry but this does not seem unreasonable nor tough to me. Anyone in the small business league at present SHOULD be adhering to any and all licensing necessary for the software they are using TO PRODUCE A PROFIT. If they aren't, well they best not try to expand beyond the term small business at any time in the future...

Flames as follows:

Re:Gets Tough?

[DM9290]

"Anyone in the small business league at present SHOULD be adhering to any and all licensing necessary for the software they are using TO PRODUCE A PROFIT. If they aren't, well they best not try to expand beyond the term small business at any time in the future..."

And if they ARE adhering to any and all licensing necessary for the software they are using, should they still consent to an audit just to put Microsoft's mind at ease?

You are very presumptuous to assume that anyone who is complying with the law would not be offended at needing to PROVE it. If I am expected to trust you to examine my physical private property with nothing other than your word of honour that you aren't going to screw around with it, then you should be willing to accept my word of honour that I am not screwing around with your intellectual property.

And if you aren't willing to accept my word. then too bloody bad. Because my actual private property rights on the physical computer system TRUMP your speculative theory that it is illegal for me to buy 100 computers without buying 100 client licenses of microsoft windows. Obviously I'm using the computers for something OTHER than your software. Until such a time as the law says a person is required to buy quantities and ratios of software as decreed by microsoft, microsoft has no power to compell anyone to comply with such an audit. And threatening that a person will suffer some kind of negative consequence if they don't wave their rights to privacy is extortion, plain and simple.

Re:Gets Tough?

[pnot]

If their solution is disagreeable, use other software.

I still can't see what gives them the right to assume guilt until innocence is proven. They demand an audit based on their perception that you haven't bought enough of their software, and AFAICT they act as if this gives them a right to waste your time proving your innocence. Why on earth is software a special case here? It would be impossible to run a business if every industry sector behaved in the same way.

*knock knock*
"Hello?"
"We're from the Business Furniture Alliance, representing Office World, Staples, and several other major furniture retailers. According to our clients' records, you haven't purchased enough office desks to run a business of this size. We suspect you've been stealing your office furniture from one of our clients."
"Not that it's any of your business, but we got a local carpenter to run up some desks for us..."
"A likely tale. We're going to have to audit your furniture. I hope you have a few days free."
"Kindly bugger off and d-- hang on, who's that?"
"Good morning sir or madam, I'm from the Business Carpeting Alliance. Our records show that..."

Re:Gets Tough?

[Anonymous Coward]

DM9290 brings up very valid points. I was threatened with such an audit. This practice DOES happen ALREADY in the US. MS demanded that I pay them money for suspected license violations (lacking sufficient licenses for the number of machines I had). I politely told them I wasnt sending them anything or letting them on my property. The BSA followed up with a demand for money or a forced audit. I told them (not as politely) to go to hell and I would have any of their personnel arrested and sue them if any of their personnel (or MS's) stepped on my property.

Here's the clincher... our machines were (quite frequently) hit by machines from MS's "internal" network before this - perhaps to ascertain the number of machines we has running. BUT... here's where it gets interesting... all our machines were running OS/2 Warp or Warp Server - except 2 Macs - which were running MacOS 8 and 9. I reminded them that THEY have no control over licensing to OS/2, and even though it wasnt their business I had legal copies of OS/2 for FAR more stations than I had. I then advised both MS & the BSA that I permanently was refusing them the right to enter my property for ANY reason and any such action contrary to that would be considered criminal tresspass as they had been notified in writing. A few more scans of my network and I never heard from them again.

Until my final letter and a few nasty calls to the BSA though, I was being threatened with a 5 figure fine and imprisonment (I didnt know it was their right to make such threats - they were worded as "you will be..." not as "if you are found in violation of, you may be").

Needless to say, what if I was a poor windows user, in full compliance, but bound by MS's idiotic license agreements to allow such behavior?

- RobertMfromLI

PS: And yes, I really was running all OS/2, eComStation or MacOS - no Windows.

Summary is incorrect.

[Virak]

It plainly says in the first sentence of the article that they're going after medium sized companies, and later on that "Microsoft is targeting companies with around 250 PCs", which is a bit more than a small company would have.

BSA?

[i_am_socket]

You know its bad when they send the Boy Scouts of America after you.

So true

[KingSkippus]

You know, not to be a troll, but I really don't see what the big deal is. Regardless of whatever ethical problems one may have with Microsoft, if a business is using illegal copies of software, that company should be sued. Buying the appropriate licenses for software is one of the costs of doing business. If I wrote a piece of software the businesses wanted and I found out that it was being rampantly pirated, I'd be wanting to stick the BSA on them, too. I don't see why Microsoft should be held to a different standard.

If you're a business using Windows, budget for it and pay, for crying out loud. If you don't want to spend the money on Microsoft products, then use open source products instead, which have become very economically attractive and corporately viable replacements. But trying to have your cake and eat it too is just stupid.

Oh, and as a side note, not that this won't start happening in the US by any stretch of the imagination, but from TFA:

So far, Microsoft will use the new approach only in the UK, [UK Lincensing Programs Manager Ram] Dhaliwal said.

Re:So true

[Richard Steiner]

My problem isn't with prosecuting folks who pirate software, it's more with the draconian measures that the BSA is willing to take, and the apparently difficult rpocess that a company has to go through to prove that their software is legitimate. Having disks, license keys, and boxes on site apparently isn't enough.

Re:So true

[QuantumG]

You mean other than the fact that civil law around the world makes it legal to build private police forces like this to enforce copyright? That these private police forces can enter private property, seize assets that contain confidential information, and are accountable to no-one? The BSA and other copyright police forces have more power to search than the FBI. Not withstanding the obvious civil rights concerns, or the privacy concerns, copyright owners have the power to look at any computer system, any piece of source code even, that they may find interesting. Who gets to look and where they get to look is determined entirely by who has the best lawyers. In most parts of the world, the local police will happily aid in the use of force to inspect.

I'm waiting for the next upgrade to the TRIPS treaties to see whether or not copyright police forces have started demanding covert inspection rights.. making it legal for them to plant spies in your business to see if you have all the appropriate licenses or whether any of your source code is violating their IP, without the messiness of a raid. Maybe they'll ask for widespread surveillance rights too.

Re:So true

[jstomel]

Nope, read your EULA. Microsoft has the right to audit at your expense at any time.

Re:So true

[eric76]

Having disks, license keys, and boxes on site apparently isn't enough.

According to some reports, the BSA reportedly requires original invoices dated before notice of the audit and showing the company name exactly. Supposedly, if you change the name of the company, you have to buy a whole new set of licenses and have the original invoices to prove it.

That is one of the best reasons of all to ditch Microsoft for good.

Re:So true

[Firehed]

Chances are that if you stole the software, you're in violation of the EULA, in which case that right of theirs disappears. How's that for a loophole!?

Re:So true

[EtherMonkey]

Hogwash.

The BSA is not a government or law enforcement agency. It is a commercial entity engaged on behalf of a copyright holder to perform audits of suspected license violations. Your participation with their audit is voluntary unless they have sufficient probably cause to justify a warrant, in which case they will be accompanied by a law enforcement agent. And quite frankly, there's no reason why you would want to cooperate with the BSA, even if you know your are 100% in compliance, because of the cost in your time in going through the process.

The biggest problem is going to be finding purchase records at all. Most businesses are not sufficiently organized to deal with a license audit. And, since most small businesses buy their software through multiple sources -- OEM, eCommerce, local retaillers, electronics stores, even bundled with other applications -- usually the business is forced to go back through tax records to come up with receipts and invoices. Overall, it is usually a combination of physical evidence -- invoices, credit card transactions, physical media, license keys, registration codes, email messages, etc -- that combined provide compelling, if not conclusive, evidence of legal purchase. If a company changes its name, or merges with another, there will be sufficient documentation of what has occurred that this wouldn't be a problem. An original receipt doesn't even need to show the name of the purchaser (i.e, buying MS-Office at Staples doesn't make your copy illegal just because Staples doesn't print your name on the receipt).

Remember that, at least in the US, the evidence must prove guilt beyond a reasonable doubt. If you have original media, CD-cases and CD-Keys -- all the mechanisms of Microsoft's license enforcement -- it is unlikely that a jury will find in the BSA's favor for lack of purchase records.

Re:So true

[Itninja]

EULA logic:

1: Retail stores are not required to (and usually do not) accept open-box software returns
2: In order to actually read the EULA, you must open the software box
3: You must accept the EULA to use the software
4: If you do not agree to the EULA, you are instructed to promptly return the software to the store
5: See 1

Re:So true

[TimTucker]

Remember that, at least in the US, the evidence must prove guilt beyond a reasonable doubt. If you have original media, CD-cases and CD-Keys -- all the mechanisms of Microsoft's license enforcement -- it is unlikely that a jury will find in the BSA's favor for lack of purchase records.

Reasonable doubt only applies for criminal cases, though, not civil. I'm sure that Microsoft has more than enough lawyers to file a few civil suites.

Re:So true

[Uncle_Al]

Sorry, but that is bull.

While they do license per developer, you can change the licensed developer.
http://www.trolltech.com/products/qt/licenses/lice nsing/qtlicensing

Re:So true

[eric76]

The question isn't what a jury is going to find. It is what the BSA considers acceptable to keep them from taking you to court for software piracy. They know that the enormous litigation costs means that few, if any, cases will ever see a jury.

From Proof of License in BSA Audits:

Not Considered Valid Proof

Copies of Checks to Software Vendors
Dated Purchase Orders
Undated Software Licenses
Credit Card Statements Evidencing Software Purchases
Certificates of Authenticity
Media, Manuals, or Key-Codes
Invoices Bearing and Entity Name Other than the Entity Named in the BSA's Initial Letter

Valid Proof of Purchase

Dated Invoices in the Name of the Audited Entity
Soft Records (online account statements) from Recognized Resellers
Signed and Dated License Agreements
Soft Records from BSA Member's such as Microsoft Licensing Statements
Cash Register Receipts for Retail Sales where Product, Version, Quantity and Price Paid are Included.

Go Microsoft!!!

[burnin1965]

This is great news.

The more Microsoft squeezes their own customers and makes it difficult and expensive to do business using Microsoft products the more these same businesses will finally open up to the idea of using open source solutions instead of consuming the spoon fed FUD from Microsoft's marketing machine.

This will result in more competition in the market where some of us can jump in and compete with the heavies in providing added value to businesses in the form of IT related services.

Go Microsoft!

Re:Go Microsoft!!!

[burnin1965]

"Customers" who don't pay are not customers that any business wants.

There is no reason to put customers in quotes, if you RTFA you would know that they are going after customers.

"Microsoft is hoping to 'spark off the engagement' with its customers",

"Microsoft keeps purchase records for volume-licence customers, and those lists can reveal usage inconsistencies",

"At that point, if the customer point blank is refusing and or telling us he doesn't want to talk with us and we are seeing this large discrepancy, that's when we will engage the BSA"

If you pirate 100% of your Microsoft software then you probably don't have to worry because you will not be a registered customer of Microsoft AND it gives the BSA less legal strength to audit you because you haven't signed up to the EULA which gives them the right to shake down your business.

Don't get me wrong, I agree that customers who pirate your software can be a bad thing and shouldn't be tolerated, but what Microsoft does truely is a shake down. When they sent the BSA into my area they didn't even bother going through a list of customers. They acquired a list of ALL businesses in the area and carpet bombed the place with threatening letters to scare up some business. I know this because one of the businesses was a small Vietnamese restaraunt that didn't even have a computer let alone any Microsoft software.

Who says that "customers" who don't pay for their software from Microsoft are going to be any more likely to pay for OSS?

Who said anything about making people pay for OSS? One of the primary means of making money off OSS is by providing a service. Its a bit harder to pirate services, I guess you could try to enslave the people providing the service.

it certainly says something about the state of OSS when people have the choice of using MS software illegally without paying, will choose that over using OSS legally without paying. What this says to me is that many companies would rather risk a lawsuit than use OSS software.

Well, I'm certain it says a whole lot more about marketing and illegal monopolistic business tactics than it does about choice. The sad part is that many of the companies that Microsoft shakes down aren't big hardcore pirates who intentionally steal from Microsoft, it has more to do with poor management of a confusing licensing system and maintaining long term records to prove you did pay for what your using.

I'm just curious if all those paid for TCO studies that show how cheap it is to use Microsoft software in your business take into consideration the cost of 1) maintaining perfect records in case your audited, and 2) the cost of going through an audit of your software while your trying to run your business, or 3) having to just pay Microsoft for the number of licenses which they "suspect" you need just to get them off your back.

But, can the BSA actually do anything?

[MysticOne]

The BSA is not a government entity, nor is it part of any law enforcement. If Microsoft wants to audit you, and you tell them no, can they actually force it on you? Or is this something where you have a contractual agreement with them (for your legitimate copies of Windows) that allows them to audit you whenever they feel like it? If so, wouldn't this simply encourage people who pirate a few copies of Windows to simply pirate all of them? You can't be in violation of a contract you don't have.

Re:But, can the BSA actually do anything?

[QuantumG]

Heh, the BSA goes to a judge and the judge gives them power to force entry and seize all hardware at your facilities. Depending on where you are, the local or federal police will even help them.

These things are pretty much handed out like candy.

Re:But, can the BSA actually do anything?

[Todd Knarr]

There's a clause in the EULA where you give Microsoft or it's agents the right to come in and audit you at any time, at your expense. Refuse to let them audit and you're automatically in breach of every Windows license you have in addition to any other violations. And they'll hold that you agreed to the EULA for any pirated versions as well, since you had (in their opinion) to click OK to the EULA to be able to install the pirated copy and that constitutes agreement to the EULA's terms.

The only way out is to not be running any of their software and be able to prove it in court. Do that and make sure to have provided them that proof when you refused the audit and, while you can't stop them from suing you and getting a court order allowing them to do the audit, you can probably counter-sue them for every penny of costs.

Re:But, can the BSA actually do anything?

[harpune]

There's a clause in the EULA where you give Microsoft or it's agents the right to come in and audit you at any time, at your expense. Refuse to let them audit and you're automatically in breach of every Windows license you have in addition to any other violations. Can you provide a citation?

Been there

[zenray]

At my former job Microsoft did this to us already. We were one company with two divisions that had individual accounts with Microsoft. Stupid, but that was the way that the owner wanted it. Anyway Microsoft was reviewing the size of the company (from what source I don't know) and only one of the division's software purchase from them and demanded an audit claiming that we did not purchase enough software to run a busniess the size we were. They implyed that we must be 'pirateing' some software. It was a major PITA combining audit data from both divisions.

Does BSA give refunds for overlicenced software?

[Anonymous Coward]

I work at a company that primarily uses Linux for all development.
But all boxes even those that have only Linux installed still have Windows license stickers on them.
Will the BSA give a refund? Perhaps the refund can go to a charity, like EFF?

Here we go again

[Anonymous Coward]

http://www.osv.org.au/index.cgi?tid=91

One of the hoariest linux switch stories is about Ernie Ball, a company that makes guitar strings. The BSA treated them miserably and tried to make an example of them with a court case and huge publicity. Ball retaliated by switching to Linux and launched their own publicity campaign aimed right back at Microsoft.

Microsoft is between a rock and a hard place on this one. They could end up with a bunch more high profile switching-to-linux stories to contend with.

Why now?

[EmbeddedJanitor]

Vista!

Why didn't they do this 6 months or a year back? Nope, they're waiting for Vista. Thus is an extra encouragement for people to "Get Legal" and thus get Vista and push up Vista sales numbers.

After a few months people (shareholders, analysts etc) will be looking at Vista sales and they better be selling it like crazy to support all the hype.

One more reason to go Linux

[Gentlewhisper]

Imagine being able to tell the Microsoft auditor to fuck himself/herself, and when the big heavies show up, all they see are peace lovin' penguins fluttering around the office with no short and curlies to grip on to.

Oh the horror!

For what it is worth...

[Savage-Rabbit]

They're starting with the small ones, because we all know what would happen if they started with the big ones. It has been my experience that the bigger a company gets and the more money there is floating around the less the PHBs care about workstation OS licenses. It's the little companies who are more likely to try to pinch pennies by cheating on Windows licenses and software licenses in general. When a company gets to a certain size the cost of Workstation OS licenses tend to take second place to the licenses they have to buy for much more complex production software products where the costs can rapidly spiral into huge sums of money that can dwarf what ever they are paying for Windows workstation OS licenses. Most of the larger companies I have worked for actually made regular efforts to check the licensing status of their various departments and paid up the Workstation OS licenses without giving it much thought. Most of the effort went into wringing the last bit of value out of the obscenely expensive production software.

Re:Cringely

[shark72]

"BTW, why is it that software is the only product where supply and demand and mass production rules don't apply? Everything else that is mass produced comes down in price, software stays the same or gets more expensive."

Lots of people don't understand the "...and demand" part. Sure, lots of us would like Adobe or Microsoft to sell software for five bucks, and perhaps many of us would only pay five bucks for the latest wares from Adobe or Microsoft. But if there is sufficient demand at a higher price, that's the price at which they will sell it.

Many folks (at least here on Slashdot) think that the ideal point on the supply/demand curve is the point where the product has the most customers. The reality is that it's at the point where the company makes the most profit. Finding this point on the curve that works for your business means understanding the market size, knowing who you want as your customer, and who you don't want as your customer.

More to the point: PhotoShop is $650. Enough people want to buy it at that price to allow Adobe to have a really nice building -- you should see their lobby! Sure, The Gimp is free. But even at free, it's not good enough for a critical mass of users. Lots of Slashdot armchair economics experts don't get this; they parrot the "supply is infinite thus value should be driven to zero" nonsense. Meanwhile, Adobe continues to do quite well selling a few bucks' worth of CDs at $650 a set, while you will have to look far and wide to find any serious designer who's foregone PhotoShop in favor of The Gimp.

BSA audits are argument against EULA enforcibility

[Sloppy]

There's a clause in the EULA where you give Microsoft or it's agents the right to come in and audit you at any time, at your expense.

I feel like a fool, because as I mention here, I don't see that clause in here.

But let's assume that I didn't read it carefully, and the EULA really is how Microsoft obtains that right from their customer. If an audit requirement is in the EULA, then that's a strong argument against EULAs being enforcible. I'll explain...

One of the problems with EULAs, is that there's never any proof (or even evidence) of the contract. Microsoft doesn't have your signature on file. EULA proponents say that the agreement is implied by the presence of the software. Ok, but even if we accept that, where's the externally-visible evidence?

Two users buy a bunch of computer components and put together their computers. User 1 then buys a copy of MS Windows and installs it, thereby agreeing to the contract (according to EULA proponents). User 2 installs Linux; he never bought a copy of Windows, never had one, and never even implicitly agreed to any EULA.

From the outside, these users appear identical. Supposedly, Microsoft has a contract with one of them and not the other, but they don't even know. You can't even determine who agreed to the EULA and who didn't without an audit! But the Linux user, even according to the most rabid Microsoft apologist, never agreed to a Microsoft EULA or a BSA audit.

How can you invoke one of the terms of a license, before it is known whether or not there ever was a license?

Using licenses to support BSA audits, begs the question as to whether or not the user consented to an audit.