US, China Bust Huge Software Piracy Ring

By Ed Oswald, BetaNews

July 24, 2007, 10:57 AM

Raids in the southern region of China have exposed a 2 billion dollar global software piracy syndicate, believed to be one of the largest in the world.

The FBI and China's Public Security Bureau led the investigation. Microsoft, as well as its customers and partners, also assisted in providing information, which led to the arrests and confiscation of the software of those involved.

The group's power was far-reaching -- software produced by it was found across five continents and 26 countries. 13 different products in at least eight languages were pirated, including Office 2007 and Windows Vista.

Investigators were able to trace about 55,000 quality copies of the software back to the group. However, the discs seized through raids represent only about 1 percent of the estimated output of the syndicate.

"This case should serve as a wake-up call to counterfeiters," Microsoft general counsel Brad Smith said. "Customers around the world are turning you in, governments and law enforcement have had enough, and private companies will act decisively to protect intellectual property."

Microsoft said that countries around the world will likely see a significant decrease in the amount of pirated software as a result of its actions.

1,000 of the copies received were from customers themselves, who submitted the software through Microsoft's Windows Genuine Advantage. Over 100 resellers also sent in information.

The probe was part of a larger effort by Chinese and US authorities that has been underway for two years and has already led to the arrest of 24 people. The FBI and PSB also recently seized counterfeit Symantec software as well, according to news reports.

Globally, piracy costs the software industry some 40 billion dollars per year, according to a joint study between the Business Software Alliance and IDC.