Microsoft, the world's biggest loser from the software piracy trade, feels the channel is uniting against cheats who make up Australia's "relatively low" 32 per cent rate of counterfeit or illegally disk loaded software.
Alex Mercer, public relations manager, Microsoft law and corporate affairs, said the rapidly rising sales of CD burners and blank CDs is a pointer to the parasitic fraud industry growing as quickly as its legitimate host industry.
"That is why we have had an increase in counterfeiting cases in the last year," Mercer said. "Hard disk loading is still a problem, but counterfeiting is also becoming an issue, especially with Internet advertising and sales."
Piracy a consumer issue
Mercer said Microsoft feels there is a huge consumer issue with people ordering goods over the Net which they think are the genuine article, only to find they are counterfeits when delivered.
"If retailers buy through authorised Microsoft distributors, they are pretty much guaranteed to be getting the genuine product," Mercer said.
Microsoft is devoting increased resources to the pursuit of pirates. There are full-time attorneys, paralegals and hotline operators as well as people visiting stores, browsing the Internet and making purchases in an attempt to track down cheats.
Microsoft investigated 1300 of the 2200 calls it received to an anti-piracy hotline last year while Australian Customs seized over $650,000 worth of counterfeit MS product in the six months to February. While a lot of calls have been received from dissatisfied consumers, Mercer said many tips are also coming from retailers who suspect their competition. Most counterfeit product originates from Southeast Asia.
Recent actions by MS in the channel include:
Oz New Media and its director, David Sutherland, in October 1998 were found to be dealing in counterfeit software including selling Office Professional for as low as $60. ONM operated in the same premises previously held by Advanced Multimedia Distributors, of which Sutherland was also a director. AMD had earlier worn a $5000 settlement to MS in 1996 for infringing copyright.
Action against Morse Peripherals Queensland, Metropolitan Computer Traders and their director Ross McColl, as well as Morse Peripherals North Coast and its director Liam Richards for hard disk loading in early 1998. Costs and damages were settled at $12,000 after a covert test purchase refuted denials.
A NSW retail chain, the Busiquip group of companies, settled for $100,000 after selling counterfeit MS software. Tipped off through the anti-piracy hotline, Busiquip was found to be selling counterfeit copies of Windows 95 to Sydney consumers.
In December, the Federal Court ruled against Modem Wholesale, trading as Swann Communications, and its director David Allen Swann for illegal disk loading. Swann agreed to pay MS $15,000 in damages and costs.
In mid-1998, MS mounted a joint action against 10 persistent disk-loading dealers in Victoria and garnered $43,500 in damages and costs from seven of them. Of the other three, Personal Computers Australia and its director Fei Zhou Ye were snipped for $12,500 after re-offending on a prior 1996 wrist slap. PC Technologies Australia, trading as Statewide Interactive Computing (director, Jose Alonso) and Adam Bala, trading as Computer Hire and Sales, were also implicated.