Slashdot Mirror
$500M Piracy Ring Busted In China
Blahbooboo3 writes "Reported by several news organizations, pirated software worth more than $500 million has been seized by authorities in China as part of a joint operation run by Chinese police and the FBI. Microsoft estimates that the software piracy of an international counterfeiting syndicate, over the past six years, cost the company at least $2 billion in lost software revenue. Microsoft said that key information in the investigation came from its Windows Genuine Advantage program, an anti-piracy system that can check whether an OS is legit. It's generally accepted that Microsoft has done well out of software piracy: it helps products become widely used, and as the market matures, people start to pay for their software. And this has been a major factor in Windows beating Linux in China, as Bill Gates has admitted."
It's a start, but $500 million is nothing compared to the scale of piracy going on in China.
.. wow, our economy would be booming.
I spent some months over there recently and I didn't see a single piece of legal software. If we could get China to pay for everything they've ripped off us
...will show that this will make no difference what so ever! Fred will still copy his knocked off copy of Vista, XP or Office for his mate. It's like trying to scoop water out of the sink with your hands, while the tapes are on full. Some other group will see a gap in the market and will jump in, thankful that haven't been caught yet.
Windows guys please stop pissing on everyone and the Linux guys stop pissing in the wind, hoping to hit Windows guys!
Illegal piracy ... and microsoft's dominance
... and (unfortunately only "hopefully") more variation and choice in software
... hmmm.
-or-
The RIAA/MPAA/BSA/
Turns out it just doesn't work without laws
The fact that it has nothing to do with bittorrent means nothing. It will be used as an opportunity to say something on the lines of "If its happening there, it must be happening here. Evil,evil,evil!"
The simple truth is that interstellar distances will not fit into the human imagination
- Douglas Adams
1/4 of the Piracy is irradiated. 3/4 to go and the software bureau can close office.
Codename "Summer Solstice" - no, not a porn film, but the name of the FBI operation encompassing multiple copyright investigations - including the one in question.
(link is to the FBI press release for this case).
There are shills on slashdot. Apparently, I'm one of them.
Because the tax paid one won't spend day and night hunting down and destroying anything that gets between a company and its profit. Oh wait yes it will...
unzip; strip; touch; finger; mount; fsck; more; yes; unmount; sleep
... digitally-stored media is pretty hard to 'seize.'
Apparently Microsoft has decided that the market is now mature enough to start tightening up on the availability of pirate versions. They have the 90% market penetration, now they want to get the money out of that market. The first hit was free now it is time to pay. The Chinese government has been under a lot of pressure to show more concern about "intellectual property" so let the dog and pony begin.
does $100 windows x 5k copies count?
They must have copied that DVD of Vista like 3 times!
There is always Linux Genuine Advantage http://www.linuxgenuineadvantage.org/ to keep it safe from piracy.
I've always been amused by the figures that are put on software piracy.
Unlike things like producing a line of denim clothing and putting the Levis brand on it, creating pirated software costs virtually nothing. It takes just as much effort to copy a DVD containing your latest vacation photos as copying a DVD containing a $10k software package.
Just because they discovered a few thousand copies of expensive software doesn't mean that it either cost that much to produce, or has that much sale value (pirated software sells for far less). Neither does it mean that the loss in sales is nearly as much, as many of those who buy/download pirated software would never have bought the software in the first place.
You should have said:
Operation Summer Soltice. Of course, the FBI use the OSS acronymn, because the WGA is driving people to OSS.
The main reason is that once people use Windows, they get locked in. Incompatible file formats, refusal to interoperate with anything other than Windows. The only choice they have after that is to continue to pirate or pay an enormous switching cost to go to Linux or pay the tax and become even more locked into MSFT. Since piracy is so rampant in those parts of the world, they will switch to Linux last. Though China and India are poor and could ill afford to pay full price for Windows, and you would logically expect them to be switching to Linux first, they wont because it is so easy to pirate Windows. So MSFT will protest and go through all the motions of fighting piracy but in reality it knows it is the piracy of windows that is keeping Linux at bay.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
$500 million / 290000 ~= $1700!
I wonder what software (besides 47000 disks of Windows Vista) they were making.
Microsoft needs to protect their investment having their territory muscled in on. It demands a proper response. Bill needs to go to Beijing jack a car and get to work. First he will need to find a way into the party on the big boat and hook up with the Hot Babe and take her to the club...
Added Pressly: "Oh, and by the way, milk is nothing but liquid meat."
*umount
All this just after Microsoft decides to come down to pirate copy prices in Chinaf t_china/index.html
http://www.salon.com/tech/htww/2007/07/10/microso
Now that they have no competition, they can mark the price back up a thousandfold where it belongs.
Cover their "losses"? How do you lose something you never had to begin with?
Thats is so true, as well, knowing someone who goes to China often and tells me all sorts of stories,
remember that the person who pays 5$ for a windows copy, will A) know not to ask questions or tell anyone about it B) buy a copy for thier friends if they need it without telling any names, C) if they get caught are in as much trouble therefor would not want to implicate anyone.
Short of using extreme torture tactics, these guys stick together....this to me was the chinese goverments fault because they wanted to throw the dog a very very small bone. What I know is this is not even the tip of the iceberg.... it is more like a scratch of a scratch of a scratch on the tip of the biggest iceberg you have ever seen... : )
How did they count the $500m - I bet it was by adding up the retail value of all the software. Probably worth much less than a million at the prices these guys sell at.
ccalam - acoustic versions of new songs.
a real shame he quit
The title is of course misleading, because it concerns counterfeiting and not software piracy:
Software Piracy ('soft-"wer 'pI-r&-sE): Robbery of software on the high seas; the taking of software from others on the open sea by open violence; without lawful authority, and with intent to steal.
"The more prohibitions there are, The poorer the people will be" -- Lao Tse
With the way the lost revenue due to piracy is inflated, $500 million is equivalent to some guy selling CD's out of the back of a truck.
So that's why Vista sales are down...
What? You don't think so? Aw, c'mon...
Evolution is a state-sponsored, state-protected religion.
Question for a lawyer: Does Microsoft's deliberate allowance of piracy create a case of estoppel?
Since Microsoft allows piracy, can the company lose its copyright?
Microsoft definitely encourages piracy, in my opinion. For years, local computer stores carried to office suite alternatives: Legal Microsoft Office, and pirated Microsoft Office for $50. Word Perfect and Lotus could not compete.
I'm not sure what local computer stores are doing now.
One thing I really hate in all of these piracy cases, movie, software and music alike, is that they always cite "lost" revenues.
First of all, to lose something would imply that you had it in the first place, which in the case of IP piracy like this is highly implausible.
Secondly, if these people didnt pirate, its almost certain they wouldnt have bothered to actually purchase these things and would have used some other alternative.
You taxes pay for the US infrastructure that allowed companies like microsoft to arise, and thus companies pay back into the tax system. But when foreign counterfeiters reap the benefits of the labor of American companies, your taxes are paying for their profits. Busting counterfeiters is good for taxes, and a good use of government money, not bad.
Now, I know slashdot hates copyright enforcement, and the tactics of the RIAA, MPAA, and BSA are deplorable. Microsoft certainly benefits in some way from software adoption due to piracy. But before you crucify me for supporting police action against counterfeiters, keep this in mind:
These counterfeiters were selling what appeared to be genuine software, at normal retail prices. They forged the holograms, faked the boxes, and generated the serial numbers. The consumers buying the software were unaware of what was going on.
Imagine buying a copy of Micrsoft Vista, and shelling out the full $250 or whatever for VistaFlavorX(tm). You install it and everything runs fine. Then, six months later the computer locks you out when Microsoft realizes it's pirated.
Putting aside the issue of WGA, can you not realize how much that would suck for the mom and pop consumer? These chinese counterfeiters were not the "little guys," and they were certainly not "sticking it to the man."
They were profiting off American companies, American labor, American tax dollars, and in the end they were screwing over the little guy.
Estoppel by silence: "A type of estoppel that prevents a person from asserting something when she had both the duty and the opportunity to speak up earlier..."
...as I pass it by for a whopping $1B! All it'd take is making thousands of copies of the smallest, most expensive codec you can find. I wonder if I'd get an award. :)
I don't think I could accomplish this with Adobe CS3, though...
Promote true freedom - support standards and interoperability.
So they count "lost revenue"?
I have lost revenue because people aren't buying my software.
I want to sell it for 100 billion but since people aren't buying it must be pirates. Do I get a newspaper story for "losing" that much?
P.S. If anyone has 10E11 then Email me to get the address of my site.
P.P.S. Did you know that the interjection, I get to use that word!!, "arr" was actually started from some actor in the '60s (19 that is)?
Or at lesast I heard that.
Why don't you guys have friends or journals?
Counterfeit software from American companies that is sold abroad means that the money is not flowing back into the US, and is instead entirely in foreign pockets. That means fewer taxes for the US GOVT, which in turn means that your personal taxes are higher in some small way.
Just wondering... how do you feel about all the US manufacturing jobs being destroyed by the cheap labour in China? Is it good for the US? Only a sliver of the population really gain from it, the majority end up getting cheaper crap at WalMart whilst putting themselves and their neighbours out of jobs.
ANY amount of money lost from piracy cuts into a companies bottom line. For every dollar that is lost, it has to be made up somewhere. And where does that normally come from: JOBS. Besides, this is theft.
A few weeks back Bill Gates stated "that piracy made things easyer for Microsoft" or words to that effect. Now they are complaining the pirates are getting their cut while making things easyer for Microsoft. I wish they would make up their minds and quit whinning about it, as their market share grows in china. (Stike me down as a Troll or Flamebate, and ding my Karma down again)
And it is the movie equivalent of theise guys that the MPAA should go after.
On the bright side, because of them I was able to buy some out of print disney DVDs for my kids...
whois gawk date unzip strip find touch finger mount join nice man top fsck grep eject more yes exit umount sleep dump
*puts tinfoil hat back on*
Who's $500 million is it? It could either be $500 million in pirate revenue at pirate street prices or it could be the imagined value to the IP owner and it makes a big difference when you try to figure out how many copies of the items were seized.
"You can now flame me, I am full of love,"
why not FSF collects donations and opens a China operative that distributes GNU Linux CD for free by mail, as free magazine gifts, and also to those street sellers? it's not going to be very expensive, yet penetrates the market, and will eventually pay off via more Chinese programmers joining the Linux camp. Linux people can certainly learn something from the MS and the OLPC success stories.
That is why I always recommend Linux...
Nobody comes knocking down your door, no tax implications, no fees to fat cats, no copy problems.
If you mod me down, I *will* introduce you to my sister!
I have a better solution: cut spending.
The Christian Right is Neither (Christian nor right). See: Matthew 23, Matthew 25, Ezekiel 16:48-50
China has 2 reason why piracy is rampant. The first is that generations have been raised that all this property belongs to the state, and if the state does not claim it, then to the people. IOW, they have a different view about property rights that they are now being asked to change.
The bigger issue is that the chinese gov. has tied their money to America's. In effect, they have made imports to America dirt cheap, but exports to China very expensive. This is designed to kill America.What GWB should be doing rather than trying to pushing more laws, is pushing for china to allow the money to float freely. Right now, if they money was untied, the price of our goods to china would drop to somewhere between 1/2 to 1/5 of the current amount. IOW, a chinese person would see our goods cost 1/2 to 1/5 of what they are currently being charged.
I prefer the "u" in honour as it seems to be missing these days.
While I'm not entirely anti-piracy, at least not when it's levelled against corporations, I'm hoping that this means I can walk down Brick Lane without the normal Chinese DVD touts screaming "You Wan' Dee Wee Dee?!" at me. Wishful thinking, I know, but I can dream.
http://xkcd.com/313/
There's a natural progression countries like China go through. Initially, their population doesn't have enough cash to afford American prices, or even heavily discounted prices. The government allows/encourages piracy at this point, since the alternative of not having access to American IP puts their country at a disadvantage. This doesn't directly hurt the US, since these countries wouldn't buy our IP anyway. At this stage, the country may also have many low-wage engineering/software companies that do nothing but low-cost contract work for foreign companies. As the economy improves, and high-tech contracting companies flourish, local demand for IP protection grows. This allows local companies to make profits off of locally generated and consumed IP. As IP begins to have actual monetary value in an emerging economy, Microsoft (and others) assert their rights to payment for their IP. Microsoft is doing us a favor: they can be the bad guys, but everyone involved in any IP industry in the US will benefit, and Heaven knows the Chinese have plenty of US $ to buy our IP now.
Gates is smart enough to know that piracy helps him in many cases. If you pirate Windows Office for home use, you knock out your home desktop as a place for Open Office to flourish, and you probably wouldn't have paid the $300 for a stupid office suite anyway. By remaining addicted to Windows and Windows Office, you insure his future revenue stream at your next job. By allowing piracy in emerging markets, he keeps out Linux, and eventually stands to make a lot of $. He's not stupid.
So, how much should a person pay for software? In theory, our economy would benefit most if those who benefit more from software pay more, and those who can afford more pay more. So, for example, in Romania, Windows Office should cost far less than $100, while here in the US, $300 is not totally unreasonable. At work, where a copy gets hammered all the time, $1000 might be reasonable, while at home where all I do is occasional recreational writing, it should be free or close to it. I don't believe Microsoft in principle would disagree with any of this. So, how is it possible to charge some people more, while other people are charged less? As shrink-wrap products, it's nearly impossible. We have the same problem with aids medications. How much should a poor African pay? The same as a wealthy American? See... it doesn't work out. Literally, people die because of this issue.
Piracy is a partial solution. It allows Microsoft to sell one copy to many customers. As a country becomes more able and willing to pay, they crack down, reducing the piracy ratio. Can or do we do the same for aids drugs? Do we allow rampant illegal cloning of drugs in Africa? We probably should if we don't. Hopefully, one day most African countries can join countries like China, and begin enforcing IP protection, not because of Microsoft police, but because they can afford it. Anyone else got a better solution?
Beer is proof that God loves us, and wants us to be happy.
no, not theft. a crime, certianly. There are very specific reasons why this isn't theft. All of which have been repeat for over 200 years, by far smarter people then those who read slashdot.
No, it does not take away from Jobs. MS needs X amount of people to develop the software. What this may impact is the price of software, but that's not true either because there is no real competition for MS so they charge as much as the can get people to pay, which is a lot higher then it would be if they had competition.
In fact, MS is so widely spread in China BECAUSE of copyright infringement. This is no different then the rapid growth in the US. Largely do to people bringing home copies from work so they can work from home.
All of that is an issue because MS overcharges for the software. Before you say it, Supply and demand means a lot more then what anyone posting on slashdot seems to think it means.
The Kruger Dunning explains most post on
How quaint, aren't pirates called terrorists now?
Statements like that always bother me. They use simple math, something like "if 1,000,000 copies were sold, worth $100 each if bought legitimately, then that's $100 million dollars in lost revenue!" No it's not. The real question is how many would have bought it at all if they had to pay the full price? With China's average incomes, I imagine this would have been a tiny fraction. So it's really 30% (or whatever percent would have actually bought it) of that $100 million.
What comes first, finding a teacher or becoming a student?
>So, how much should a person pay for software? In theory, our economy would benefit most if those who benefit more from software pay more, and those who can afford more pay more.
"From each according to his ability, to each according to his need"? Yeah, that sure truned out real well,.
That's bullshit. The Chinese are pirating software because they can't afford the real thing. If they weren't pirating Windows, they simply wouldn't have it. Therefore, Microsoft has lost no money to software piracy, because there was never potential for them to get any. However, if Microsoft started selling legit copies of Windows in China for very cheap (I'm talking as cheap as the counterfeits), they'd probably start making more money on the Chinese market.
~
~
They way the industry calculates losses from copyright infringement, this adds up to a net haul of what, 200 cd's?
I visited Shen Zhen China (just inland from Hong Kong) about 2 months ago and while I was there Spiderman 3 came out 3 days earlier in China then in the US. On Wednesday there time which is +16 from Los Angeles.
So I went to see it opening night. Ticket prices were about $10.40 each 80 RMB. Per Ticket, a very high price in China considering most people in that neighborhood only made 1000 RMB or less even.
As I left the theater, there was a street vendor there holding out a very professional looking DVD package of Spiderman 3 and offering it for 20 RMB I think it was around that price. Which is around $2.50 US.
Interesting thing is they sold more copy's of our TV shows like CSI, and soap operas then movies!
They also sold more Japanese movies then US ones.
I am always doing that which I can not do, in order that I may learn how to do it. - Pablo Picasso
Currently about $700 million USD or 1.5% of global sales.
Today Gates openly concedes that tolerating piracy turned out to be Microsoft's best long-term strategy. That's why Windows is used on an estimated 90% of China's 120 million PCs. "It's easier for our software to compete with Linux when there's piracy than when there's not," Gates says. "Are you kidding? You can get the real thing, and you get the same price." Indeed, in China's back alleys, Linux often costs more than Windows because it requires more disks. And Microsoft's own prices have dropped so low it now sells a $3 package of Windows and Office to students.
Microsoft's China strategy is clearly paying off. More than 24 million PCs will be sold this year, adding to the 120 million already in place. Although the company's China revenues average no more than $7 for every PC in use (compared with $100 to $200 in developed countries), Gates says those figures will eventually converge. "What we have here is not about me, and it's not about where President Hu went to dinner. It's a relationship, where we've really found a way of doing things together that will generate a substantial part of Microsoft's growth in the next decade. I don't know any company in the IT industry where things have worked out as well as they have for Microsoft."
-----
As Mencius wrote, in a world without walls or fences, who needs windows or gates?
China.
Mr. Bill Gates! Mr. Bill Gates!" a young woman shrieks as the black car pulls up. A pallid student in a nylon windbreaker pushes his way through the security line and hands the world's richest man a small envelope with a floral design. "It's very important," he pants.
Another day in China, another round of adulation. Today the Microsoft chairman is being named an honorary trustee of Peking University. Yesterday it was an honorary doctorate from Beijing's Tsinghua University - the 13th in the school's 82-year history. Gates, wearing the same lopsided grin he has had on his face for the past few days, takes the envelope from the young man. For him this is a triumphant visit to China, a victory lap of sorts, on which I've been invited to tag along. The country is his.
No other Fortune 500 CEO gets quite the same treatment in China. While most would count themselves lucky to talk with one of China's top leaders, Gates will meet with four members of the Politburo on this four-day April trip. As one government leader put it while introducing Gates at a business conference, the Microsoft chairman is "bigger in China than any movie star." Last spring President Hu Jintao toured the Microsoft campus in Redmond, Wash., and was feted at a dinner at Gates' home. "You are a friend to the Chinese people, and I am a friend of Microsoft," Hu told his host. "Every morning I go to my office and use your software.
How Microsoft conquered China [July 17, 2007]
I know I'm probably going to get flamed from hell and back, but I just have to ask this question:
Can they really report monetary loss if someone using the pirated version of would never have purchased it in the first place?
I'm not condoning illegal activity, but under the following circumstances, can monetary loss still be claimed if someone downloads (for example) Microsoft Office 2000, but:
1) doesn't incur any direct charges to Microsoft (ie cd media, bandwidth, etc)
2) would never have purchased the software in the first place (ie poor college student)
I would think that they would only be able to claim a loss if they otherwise would have made money, if not for the piracy. I know the EULAs and laws and what not, but I'm talking more about actually saying 'we lost money'. On top of that, the person is gaining experience and skill with that product which, I would think, could drastically increase their chances of actually paying for it in the future (ie poor college student gets a job due to his mad Office skillz and makes enough money to buy Office 2003) or supporting/working for a company that uses it.
Again, I'm not condoning piracy, but those claims of monetary loss always make me think of someone running out of the Microsoft bank vault with a few bags with '$$$' printed on them, and it makes me laugh.
And they said zombies weren't real!
Did anyone consider that $500M in software in China is actually worth $5M or less, since it's being sold on black market dollar-a-piece anyway ? Same applies to "lost revenue". Reminds me of RIAA tactics of estimating "losses".
It was a $2 billion ring as of yesterday in the news. But we know who has been exaggerating these numbers. More likely the $2 billion is more like $2 million. It is hard to get $2 billion of anything, so we all know that's utter nonsense. If they have $2 billion they can easily afford to defend themselves. And, since when did China adopt US copyright practices. And since when is $2 billion dollars equal to $2 billion dollars in China? Not really possible.
You can lead a man with reason but you can't make him think.
Sounds like it's time for module-based surveilance tools. Good thing it'll be secret, or I'd bever be able to choose between Communist Home Professional or Fascist Ultimate.
I lost my sig.
What were all those canadians doing pirating in China? because the media tells me that all the pirates are from canada. Arrrr!
$500m in bad math = $100 * 5m copies
5m copies * actual revenue per copy = 5m copies * $2 = $10m
Still a lot of money, but hardly threatening Microsoft's profits. Didn't Microsoft cost themselves over a billion dollars this year thanks to their sale of Xbox space heaters? Just to put things in perspective, they would need to bust 100 piracy rings of this size just to match losses due to
A. their own incompetence,
B. greed in pushing products out before they're ready
C. some combination thereof
Read all the way through the article and you'll see an interesting reply from a reader. They took some thousand copies (I'm too lazy to go back and look at the number) and yet say they recovered $500M worth of software. Both are very large numbers and most people weren't math majors in college...so the numbers easily fly. However, if you do the math the reader points out it comes to about $1,100 a copy. Hardly, a "conservative estimate" as the article states if this is in fact a direct cost associated with just those copies confiscated.
Why steal an OS when there is a free alternative like Lunix?
A situation like that makes it seem like nobody really wants Lunix: I mean heck, if MS is successfully winning against a FREE product, they clearly have to be putting out an overwhelmingly superior. The truly amazing thing is that, in China WITH piracy, the marketshare of Windows vs. non-Windows is STILL about the same as in other markets.
Not that such analysis will be popular around here, but the unvarnished truth is never much loved. Especially here.
What ever happened to the Republicans?
Quack, quack.
Of all the features of Western, free civilization for the West to convince China to adopt next, isn't cracking down on piracy fairly low on the list compared to, oh, not going to jail or being executed for political views?
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
I mean, after stopping this piracy and saving all that money, the prices will come down quickly, right?
With the cut in piracy, surely we'll soon be seeing the benefits of lower-priced software! After all, one of the reasons for software prices being high is piracy, isn't it?
"Only a sliver of the population really gain from it" "the majority end up getting cheaper crap at WalMart" Sounds like more than a sliver of the population gains from it to me....
Frosty piss posts are worthless, GNAA posts are worthless and hurtful, but they are the least of this site's neuroses.
thar be GOLD, matey!
Oh, I'm sorry sir, I thought you were referring to me, Mr. Wensleydale.
But VOA told a different story: http://www.voanews.com/english/2007-07-24-voa23.cf m
Here's the challenge: identify the carrier with the most torque applied to the story.
Oh, I'm sorry sir, I thought you were referring to me, Mr. Wensleydale.
There is even more to that.
Imagine, a US company buys high end CAD software. It pays full price plus annual maintenance fees.
This CAD software is then cracked overseas and bought/ illegally copied by several companys overseas.
Now how can the US company compete with all these other companys if there costs of doing business are so much higher because they paid
for software and already pay more for labor? When these US companys go out of business, the software can no longer be paid for.
Who pays for the software to be upgraded now? I am sure that you can see where this is going from here...
I always love these statements that claim companies lost millions or billions of dollars due to the piracy. Because as we all know -- without piracy, every single one of those people would have gone out and legitimately purchased the product in question... I'm sure companies do lose revenue to piracy, but the amount lost is only a small percentage compared to how many download total. How many people were likely to legitimately purchase Photoshop for $500, for example, among how many copies are downloaded each year?
As has been pointed out several times, we already know MS likes the rampant piracy over there. It gives them a foothold.
This is just like Blizzard banning a few hundred 'token' gold farmers, so they can claim they're doing SOMETHING.
If you say that, then their "license" is that anyone can do anything.
"This kind of piracy hurts the US, so we really should be all for enforcement. Counterfeit software from American companies that is sold abroad means that the money is not flowing back into the US, and is instead entirely in foreign pockets. That means fewer taxes for the US GOVT, which in turn means that your personal taxes are higher in some small way. "
:)
Well, I am not an American and I do not care how much taxes the Americans have to pay.