The significance of computers and subsequently computer software in modern lives is indeed unquantifiable. Teston asserts that software has become the building block of all major industries and as such, our very civilization (66). With this in mind, the issue of software piracy is of great concern since its impacts have a direct bearing on our modern civilization.
Over the last two decades, piracy has become so prevalent in modern society and most people engage in it without hesitation. The Business Software Alliance defines software piracy as the “unauthorized copying or distribution of copyrighted software”.
Pirating constituted copyright infringement and is therefore an illegal action punishable by law. While some people argue that software should be free for all in the first place and hence piracy is acceptable, others declare that piracy is tantamount to physical robbery. This paper shall argue that piracy is unjustifiable since it fails to respect the proprietary rights of the author of the software and results to losses to the software publishers and the society at large.
This paper will raise arguments that demonstrate that piracy is unjustifiable all the while relying on authoritative sources. A case shall also be made in defense of software piracy so as to provide a balanced view on the topic. A brief discussion with will analyze the arguments forwarded will then be used to prove that software piracy is mostly detrimental.
Information technology has been the key driver of the US economy in the last few decades. The U.S. software industry has been a major player in the U.S. economy with the software industry contributing a substantial amount of revenue to the U.S. government. As a result of software piracy, MacDonald and Fougere document that the U.S. lost over a billion dollars in tax revenue in the year 2000.
This figure has risen over the years as piracy has become even more pervasive therefore resulting in even bigger loses on revenue by the U.S. These losses are as a direct result of the significant losses in revenue that the software industry suffers due to software piracy. Software piracy therefore robs our government off the much needed revenue.
The software industry employs hundreds of thousands of people in the U.S. As such, the mere existence of this industry contributes positively to the U.S. economy by providing employment to citizens who contribute to the economy by the taxes they pay and other consumptions they make. MacDonald and Fougere noted that software piracy cost the U.S. over 100,000 jobs in the year 2000 as software companies were forced to cut down on their staff so as to offset the losses brought about by piracy.
Professionals in the software development community are paid for their creative skills by the revenue which is accrued from the sale of the same. Piracy denies the software developers off their rightfully earned pay. This translates to a slowing in the growth of the industry which in effect retards the growth of the industry thus hurting the U.S. economy (Gopal and Sanders 381).
One of the justifications for piracy by the ordinary consumer is that piracy only hurts the big corporations which are already excessively rich and can therefore absorb the losses that result from their software being pirated. However, this is a fallacy since piracy does not only affect the software developers but also affect consumers.
Parsons and Oja reveal that as a result of piracy, software publishers may be forced to inflate the price for the licensed copy of the product so as to offset losses incurred due to piracy (73). Piracy therefore results in the legitimate buyers being penalized in the form of inflated prices. It is conceivable that if piracy was not practiced, software companies would be able to sell their products at prices that were affordable to all since the profits would still be significant as a result of the volume of sales.
Software piracy may result in personal loses to the consumer who has purchased or downloaded for free the pirated software. When people purchase or download software that has been pirated, they stand to suffer loses in the long-term. This is because when a person uses pirated software, they are not eligible to updates, patches or other software tweaks that the software publishers may come up with in the lifetime of the software.
HWM reveals that only those users who installed the original Symantec software had access to the virus signatures that the company regularly dispensed through the internet (40). A user with a pirated copy of the Symantec antivirus software will therefore have software which has an obsolete virus databank therefore leaving him/her exposed to viruses. The damages that this may result to are definitely more costly than a legitimate copy of the software would have cost.
The motivation for most pirates is to fight the pricing by software publishers which the software pirates deem to be exorbitantly high. This reasoning fails to take into consideration that software publishers take into consideration many factors when coming up with the prices. The revenue accrued from software products sales does not all translate to profit for the software companies but is used for other value added services such as; customer support personnel, free technical support among others (Parsons and Oja 73).
Software piracy decreases the software revenue and the companies are therefore unable to provide these services for free or in cases where they can, a customer has to wait for long therefore decreasing the quality of the customer service provision. Software piracy therefore reduces the quality of customer service therefore making the usage of a software product less enjoyable.
Software piracy does not always hurt the profitability of a company and at times, it actually results in the software publisher’s gaining. Gu and Mahajan declare that while piracy is normally considered to be detrimental to a firm’s profit, leads to a market that is free of destructive price competition therefore resulting in higher gains by the software companies (1).
This is possible since piracy attracts the price sensitive consumers and once they are out of the market, those that remain are the ones who would not mind using more money for the licensed copy of the software. In an environment where piracy does not exist, the software firms will be forced to compete for the price sensitive consumers which will invariably result in destructive price competition thus lowering the profit margin of the firms significantly (Gu and Mahajan 2).
As a matter of fact, most of the software products offered by big corporations are sold at exorbitant prices that are not only unjustifiable but also unaffordable for some people. Parsons and Oja point out that in countries such as North Korea where the average annual income is a mere us$ 900, an individual purchasing a legitimate copy of Microsoft Office for US$ 250 would be spending over one-quarter of their annual income (72).
Piracy affords such a person a means through which they can get the same software at a greatly subsidized cost or even at no cost at all. Software Piracy therefore enables people to have access to software and make use of it to further their economic interests therefore benefiting not only themselves but also their families and society at large.
While piracy has been shot down for allegedly depriving people in the software industry off their livelihoods, software at times has the effect of increasing the sales of the software. At times, software pirates include a note to the user explicitly asking them to purchase a legitimate copy of the product if they find it useful.
In such cases, the pirated copy acts more as a “demo” and the user can proceed to purchase the legitimate copy if he/she finds it impressive. Software piracy therefore results in a popularization of a software product with increased sales for the same. This is a favorable thing for the software publisher who gains a wider market for the software product as a result of piracy.
One of the results of piracy is that it increases the popularity of the product itself. As such, there are instances in which manufacturers encourage pirating of their product as a way to gain market leadership (Luppicini and Adell 358). By encouraging the piracy of a product, a company can monopolize the market by making consumers attached to their particular software.
Luppicini and Adell suggest that software piracy “permits the shadow diffusion of software therefore increasing its user base over time” (358). This strategy has been utilized by major software players such as Microsoft and MacAfee to enable them capture a larger market.
The discussions presented above have demonstrated that software piracy results in a stunned growth of the software industry in the region that is affected by this ill. As a matter of fact, software plays a very significant role in the economy of a country and as such, the repercussions that come about as a result of software piracy should be avoided at all costs.
Gopal and Sanders suggest that considering the enormous level of monetary resources that are at risk as a result of software piracy, more effort should be dedicated in mitigating software piracy (396). In the U.S., Federal laws have been put in place to try and tackle the problem of software piracy. Teston reveals that in 2007, the Federal law increased fines to $250,000 for software copyright infringement and the jail term to 5 years so as to try and deter people from engaging in software piracy (75).
One of the defenses of piracy is that is gives the user an opportunity to test the software after which they can purchase a legitimate copy. While this scenario would be ideal if it played out like this, in most cases users are just content to continue using the pirated copy and do not consider purchasing the licensed copy.
In addition to this, some proponents of software piracy advance that piracy is justifiable since it helps people who cannot afford software priced for the U.S. market, this argument fails to hold considering that software piracy is not limited to developing countries with weak economies. Parsons and Oja document that most of the countries which have high incidences of software piracy have strong economies and income per capita (72).
An argument presented by advocates of piracy is that software is public property and as such, its use should not be restricted by proprietary laws. Teston revealed in a study on the attitudes of technology students towards software piracy that most people are of the opinion that manufacturers do not retain any property rights to software following consumer purchase (73).
This notion is further reinforced by the assumption that software companies have enough resources to absorb the losses brought about by piracy. While big corporations such as Microsoft can afford to absorb the losses that software piracy brings about, smaller software publishers may be unable to do the same and piracy will therefore result in them running bankrupt. Piracy therefore threatens the means of livelihood of people working in the software development industry in addition to hurting our economy.
This paper set out to argue that software piracy is unjustifiable since it results to huge losses to the software publishers and the society at large. To reinforce these claims, some of the major faults associated with software piracy have been discussed. A significant point raised in this paper is that the pervasiveness of software piracy in our country has a huge negative effect on not only the software industry but also the country’s economy which loses billions of dollars to pirates.
Piracy not only has negative effect on our economy but it is also a federal offense. Every individual should therefore take actions to mitigate this detrimental practice by ensuring that they purchase only legal copies of software products and avoid any pirating activity. By doing this, the individual will have helped keep software publishers in business which will positively impact our economy.
Business Software Alliance. What is Software Piracy? 2010. Web. 4 Dec. 2010. http://www.bsa.org/country/Anti-Piracy/What-is-Software-Piracy.aspx
Gopal, Ram and Sanders, Lawrence. “International Software Piracy: Analysis of Key Issues and Impacts”. Information Systems Research vol. 9. No. 4, December 1998.
Gu, Bin and Mahajan, Vijah. “The Benefits of Piracy – A Competitive Perspective.” 2004. PDF File.
HWM. “The Piracy Issue: Did it Destroy Asia’s Answer to Bill Gates?” HWM. Vol. 2. issue 6, 2002.
Luppicini, Rocci and Adell, Rebecca. Handbook of Research on Technoethics. Idea Group Inc (IGI), 2009. Print.
MacDonald, Laurie and Fougere, Kenneth. “Software Piracy: A Study of the Extent Of Coverage in Introductory MIS Textbooks.” Journal of Information Systems Education, Vol. 13(4), 2001.
Parsons, Jamrich and Oja, Dan. Computer concepts illustrated introductory. Cengage Learning, 2008. Print.
Teston, George. “Software Piracy among Technology Education Students: Investigating Property Rights in a Culture of Innovation.” Journal of Technology Education, Vol. 20. 1, 2008.