Taiwan Group Responsible For 90% of MSFT Piracy

Stony Stevenson writes "Microsoft claims that a small group led by a recently jailed Taiwanese man was the source of almost all high-quality pirated copies of its software up until his arrest in 2004. The claim suggests that Microsoft practically wiped out commercial piracy of its products with the arrest of Huang Jer-sheng, the owner of Taiwan-based software distributor Maximus Technology. Microsoft announced today that Huang and his associates. who were all recently sentenced to jail time, had been responsible for the 'production and distribution of more than 90 percent of the high-quality counterfeit Microsoft software products either seized by law enforcement or test-purchased around the world.'"

Comments

quantifying the unquantifable!

[timmarhy]

Does anyone really believe they have any clue how much of their software gets pirated?

90% sounds like a nice marketing department developed figure.

Re:quantifying the unquantifable!

[darkonc]

Methinks that they have no problem with 'poor' people pirating their software on the sly and for free, because it keeps the monopoly alive. It's really unlikely that they're going to willingly kill 90% of that piracy market. ( If everybody who wanted an office suite or OS but couldn't (or refused to) afford MS's prices was 'forced' to go with OpenOffice and/or Linux, MS's death--grip on the market would very quickly be pried open. )
These guys, on the other hand, seem to have been selling 'legitimate' copies of Microsoft products for real cheap -- That really does cut into Microsoft's market, which is people who are willing to pay for their products in return for either a clean conscience or to keep the MS police at bay.

Microsoft has no problems killing those pirates.

Re:quantifying the unquantifable!

[kripkenstein]

The quote in the summary is more specific. It's the "production and distribution of more than 90 percent of the high-quality counterfeit Microsoft software products either seized by law enforcement or test-purchased around the world."

So they're only talking about the stuff they've confiscated and not claiming it's 90% of everything that exists. That's pretty much it. They're talking about 'high-quality piracy', not casual piracy as in downloading from the Pirate Bay or burning your friend a copy. High quality piracy in this context means that CDs are pressed, covers forged, everything in order for the product to look like it is authentic. It is then sold as if it were in fact authentic (as opposed to casual piracy, where no money trades hands).

It is very hard to know how much casual piracy there is. However, it is far easier to know how much high-quality piracy exists, because we are talking about actual physical products here, tangible evidence. They are also manufactured somewhere. Then, assuming that law enforcement captures such high-quality piracy in a random sampling manner (that is, all such forged products have the same chance to be caught - a working hypothesis, debatable of course), then this Taiwanese group was the source of 90% of that. So, presumably (by statistical inference) this group is responsible for 90% of high-quality piracy.

It's a little surprising that a single group is so dominant in this area, actually, I wouldn't have expected it. However, the more interesting question is what will happen now: if suddenly 90% of these forgeries vanish off the market, what will the people buying them do? Will other suppliers fill the gap, or will the buyers turn to casual piracy, or to alternate OSes?

Re:quantifying the unquantifable!

[cp.tar]

However, the more interesting question is what will happen now: if suddenly 90% of these forgeries vanish off the market, what will the people buying them do? Will other suppliers fill the gap, or will the buyers turn to casual piracy, or to alternate OSes?

It's not that interesting a question, methinks.

As these pirated copies were sold off as genuine, I'd guess that most of the users actually believed they were buying legitimate copies.
Therefore, most of those people will be off buying legitimate copies, directly increasing Microsoft's revenue (as opposed to casual pirates, who indirectly increase Microsoft's revenue by giving them free mindshare).

People will turn to alternate OSes when two conditions are met:

1. Equivalent apps become available on the alternate platforms.
2. Enough other people convert to a different platform.

Yeah, it's a bit of a Catch-22. People use Windows because everybody else uses Windows, just as people still use Internet Explorer because web designers do not wish to lose page views by not catering to IE's broken CSS implementation.
However, contrary to the geek's instinct, some of the killer apps are already on alternate platforms — e.g. Compiz Fusion and AisleRiot on Linux, capturing the attention of two distinct groups of users.
Now, if we could hope for better-educated users, the hop would be swifter. Alas, we have to operate in the world where a casual user is a moron. C'est la vie...

Re:quantifying the unquantifable!

[kripkenstein]

However, the more interesting question is what will happen now: if suddenly 90% of these forgeries vanish off the market, what will the people buying them do? Will other suppliers fill the gap, or will the buyers turn to casual piracy, or to alternate OSes?

It's not that interesting a question, methinks.

As these pirated copies were sold off as genuine, I'd guess that most of the users actually believed they were buying legitimate copies. Therefore, most of those people will be off buying legitimate copies

I'm not sure. If Windows cost them $10 before and now costs the full $150 or so, they won't just run to buy legitimate copies. I'm not saying they'll go off and run Linux - they might look until they find another pirated version, or get someone to help them download and burn one. Perhaps only a small minority might be motivated to seek alternate OSes, that is why I left this at the end of the list of options. But I seriously doubt the majority will just happily start paying full price.

Re:quantifying the unquantifable!

[Skrynesaver]

Perhaps the title is misleading, the linked article claims that this group was responsible for 90% of counterfeit MS products. That's not piracy, it's forgery - individuals downloading and burning copies for their own use is piracy random definition according to my personal dictionary. This however was organised crime (insert "and MS isn't?" joke here) a very different proposition.

While I loathe and detest MS and their general operating methods, (particularly the whole BSA garbage), they are entirely justified in prosecuting this crew for fraud/forgery etc... though they may get bit by the "boy who cried wolf" syndrome as they, among others, have been claiming that every kid with a torrent client is a threat to the stability of the economic system itself. </rant>

Re:High quality?

[arivanov]

Compared to a stripped and vandalised "recovery disk" it is high quality. You could actually install from it.

New pricing scheme?

[Library Spoff]

Does this mean the cost of microsoft software will come down? We are always being told that piracy on this scale makes software companies push up prices. So when is the cost of vista (especially in the uk) coming down?

Why copy protection?

[unbug]

So why do they need all this stupid copy protection stuff like license numbers, WGA etc.? If their products practically aren't commercially pirated any longer you'd think they could do without.

Good show, but hardly enough

[Torodung]

Considering that most of the pirating Chinese world is using Sharpie scribbled CD-R's to install non-Genuine Windows, I don't think it matters terribly much if they've stopped "90%" of the flow of high-quality counterfeits.

It's darned good that they caught the bastards, but wake me up when we stop 90% of the actual piracy in Asia.

This strikes me as a fluff piece for nervous investors.

--
Toro

Re:Good show, but hardly enough

[thona]

::It does surprise me that there is significant demand for "real looking" software,

There is no demand.

See, it goes like that:
* Counterfeiter fakes software.
* Counterfeiter and in between person pose as distributor, selling the windows copies with a SMALL discount.
* Computer shops, always looking for a small gain (as margins are super slim) take that. Mind you, way talk about omaybe 5% less price, but if your margin is only 5% on the product, that doubles your margin.

The shop may not know the software is fake (it was a little chaper, but it could just have been a sale), and the end user definitly does not DEMAND fake software. The whole reason it is so high quality is that the purchase chain (shop, end user) do NOT REALIZE it is fake.

Criminal like hell. Nothing compared to copy some software where both parties know it.

Re:Good show, but hardly enough

[thona]

I personally see it as vastly different. Because it affects the cunwary consumer.

See, if I ask you to copy me software, and you do, we do something illegal, and we can discuss the moral. But we both KNOW it. It is a fact, I dont pay, we know what we get into.

In this fact, there is the additional dimension that not only is software illegally copied, but it is done so to swindle an unsuspecting third party for money. It means that while the copy person knows it is fake, the person paying does not know so, and in fact THINKS he purchases it legally. Besides the obvious moral issue it opens that third party to legal claims, because he is comitting a crime by using this illegal copy, albeit not knowing it.

One case where "I did not know" is a very sad defense.

And this "betraying another unsuspecting party" does add tremendously. If I steal software, this is between me and the company putting it on the market, and the person allowing me to copy. If I make counterfeit software, I involve a third party that does not want to be in this game.

Re:high-quality

[cp.tar]

You liars, high-quality. The quality IS THE SAME, don't blame pirates for your quality of development.

Actually, no, it is not.

I surmise pirates really do offer better quality, as they conveniently remove the WGA and similar "protection measures", thus ensuring the user's copy of Windows will never ever get blocked by Microsoft. For instance.

Though I suspect that "high-quality copy" means "CD and packaging virtually indistinguishable from the original retail copy", not "a better product". Nevertheless, sometimes pirate copies are of quite higher quality than the original.

Re:high quality?

[osu-neko]

Ah yes, Hobson's Choice...

If the theater only has one movie, it's true that you have a choice of watching it or not, but it's not true that you have a choice of movies to watch.

I think the OP was complaining about the lack of choices for software to buy, not about the ability to choose to refrain from buying computers. Assuming you've decided to give up on the old abacus and join the 21st century, if you walk into most stores, yes, you are forced to buy Microsoft products. You only "choice" here is Hobson's Choice.

Although this is true of most stores, it's getting better. I'm seeing "Apple Stores" springing up inside more and more these days. Still not a lot of choice but better than none.

Re:good/bad pirate

[Icarus1919]

Let's not fool ourselves. I pirate things all the time, but I've never told myself what I was doing was "good" piracy.

Re:High quality?

[Torodung]

LOL.

Slashdot needs a +1 "obligatory" modifier, so these sorts of jokes can be tagged as "obligatory" instead of "funny." ;^)

--
Toro

Re: as opposed to casual piracy, where no money tr

[Sinbios]

A little off topic, but just pointing out that if you can freely make copies of that money, then that money is in infinite supply and thus worthless. I don't think you would appreciate (hah!) your money being devalued. Also, this is generally referred to as counterfeiting, and quite illegal :^)

Re: as opposed to casual piracy, where no money tr

[DECS]

you have trouble seeing the difference between copied bits and the effort required to arrange those bits. The value of software isn't in the commercial packaging or plastic media, it's obviously in the efforts required to create something people will pay for. While you can argue a fallacy of "duplicating doesn't deprive you of the original copy," you're simply ignorantly wrong.

Copying software doesn't deprive somebody of the version you copied, it deprives the creator/owner of their ability to legitimately sell copies of their work. That's what you are stealing when you copy.

Your same silly argument could be applied to counterfeiting currency: copying real money doesn't deprive anyone of their legitimate currency. The problem is, it devalues money by depriving the government of its ability to regulate the supply and value of money. That's why the Secret Service exists.

Re: as opposed to casual piracy, where no money tr

[GaratNW]

Copying software results in: - Legitimate copies going up in price, as companies argue that piracy has taken away profits that should have gone to them. - More and increasingly draconian copy protection that only hurts legitimate users.

Your argument is only valid in for software that was never intended for profit. Yes, copying retail software does do real harm and IS real theft by any rational standard of law. If you prefer to think there are no laws and software is exempt from property protections, than yes, I guess your argument is unbeatable. Not through any inherent validity, but in your self-imposed view that stealing software is somehow "ok" because it doesn't change the bits in question.

Maybe I'm misunderstanding, and that's not what you're arguing, but it's how it comes across. Of course, I'm looking at this from the companies perspective. From a consumer's perspective, if you allow someone to copy your software, then your argument is perfectly valid. You're still breaking the law and causing real harm to real people, but I could see your point in this light.

Strategic FUD?

[Bones3D_mac]

Considering just how adamant Microsoft has been about killing off XP, it makes one wonder if the "high quality" label used here may allow the guy to become a practical scapegoat for Microsoft, should they attempt some underhanded tactic like setting their authentication system to automatically flag all future XP serial numbers it encounters as pirated, regardless of the product's legitimacy. By claiming all currently unsold retail and system builder versions of XP are pirate copies, it wouldn't take much to bury the OS beyond a mass recall of all unsold discs to be used as "evidence".

Of course, this couldn't ever really happen, but it does make you think...

Re: as opposed to casual piracy, where no money tr

[asc99c]

Your argument is aimed at the wrong post here. This is a decent argument when talking about the filesharing type of piracy - people downloading stuff they weren't going to buy anyway. There's no realistic loss from this.

However, the article and comment are both talking about professional piracy - burning discs and printing manuals and shrinkwrapping in boxes that purport to be the real things. When someone honest goes and buys one of those, $60 that was heading to MS is snatched away. The fact the money never got as far as their bank account doesn't make a lot of difference - it would have got there if not for the piracy.

Even the slashdot crowd mostly condemn this sort of piracy.

By what standard?

[jdickey]

Of course it's high quality; it just doesn't meet your needs.

Vista is the first Windows infestation to officially, publicly acknowledge what serious MSFT-watchers have known for some time: the population of usees and customers are two entirely separate, non-overlapping groups.

The usees, of course, are the poor sheeple who bought a PC and naively expect Windows to "work" because it's the "market" "leader".

The customers are abviously the MPAA, RIAA and other "content" industry groups (collectively known as the MAFIAA (Media Authoritarian Fanatic Ass-farking of America) to friend and foe alike). Of course, "everyone" knows that all major media content these days is made using Macs or *nix boxen.

Their customers are happy as the proverbial clams with Vista. Especially since they never have to actually touch it!

Re:By what standard?

[Anonymous Coward]

Don't you think that it's rather lame to follow the herd in calling people sheeple? It marks you somehow superior and different, just exactly like all of your friends, to sneer at those 'other' people who aren't unique individual snowflakes just like you and your friends?

Re:High quality?

[amirulbahr]

What do you people have against recovery disks? The way I see it:

Pros:

• Installs quicker
• All drivers are installed
• Some useful preloaded apps are on there (e.g. DVD player, cd recording apps, acroread...)
• No need to activate thanks to SLP

Cons:

• Some useless bloatware comes installed

By the time you remove the bloat-ware, you're still better off. The vast majority of customers will have a better experience using recovery disks. If it really bothers you, then you already know how to do it yourself using your own media.

Keys

[PhotoGuy]

There was no mention in the article how these pirates handled keys and activation and such.

An exact copy of the pretty box and manuals and holograms and stuff is fine, but if it's an exact copy of the CD contents itself, it won't activate properly. Do they use hacked versions of the binaries? You'd think that would stand out (failed updates and such). Anyone know?

Re:High quality?

[jimicus]

While 90% of end users will probably benefit from a simplified recovery process, it's a pain for the other 10% for a number of reasons:

1. The recovery disk can't be used to boot the PC into a recovery mode to try and rescue any data.
   
2. The recovery disk will almost certainly blow away anything else that's on the system - potentially including other partitions containing other OS installations. Whereas a straight Windows install can be instructed not to do this. Pretty vital if you need to restore data.
   
3. If the OEM provides a recovery disk, chances are the only way to get hold of a genuine, plain Windows install CD which eliminates the first two problems is to go out and buy a retail copy of Windows. Which is pretty galling when you look at the invoice for the PC and see that you've already bought Windows, you should have no need to buy it again.
   
4. If you get this far and decide to buy a retail copy of Windows - ok, you've accepted that, so be it. But - ah - the PC is two or three years old and can't possibly run Vista.
   
5. The bloatware on the recovery disk can make supporting PCs harder. Case in point: most wireless network cards have software which replaces the Windows user interface for wireless networking. Which means that now you can't easily talk your friend through setting up wireless networking over the phone because you have no idea what they can see.
   
6. The bloatware provides a false sense of security - "I don't need AV because I've got Symantec that came with my PC" (but I didn't read the small print and it hasn't updated in 11 months).
   
7. Even when the addon software is justifiable, it is frequently of pretty appalling quality. (HP, I'm looking at you and the backup application you ship with new PCs. Specifically, the application which takes backups perfectly happily but you can't easily restore from them. It's just as well I tested that before I handed the PC over to my mother).
   

Re:High quality?

[mikael]

Say you have a dual boot hard disk drive, that has three or more partitions on it (Windows partition, a couple of Linux partitions for kernels, user home directories, Swap space etc....). For whatever reason, you need to reinstall the Windows partition. As far as the recovery disk is concerned, the whole hard disk drive belongs to Windows and no-one else. So you can either delete the partition altogether or leave it as it is until Judgement day.