Software piracy reaches five-year high

MS, Adobe, Hancom face most damage from lack of intellectual property protection

By Yoon Ja-young

Software piracy is showing no signs of going away; and the damage from this surpassed 300 billion won last year, the largest amount since the compilation of such data started in 2006.

According to the Korea Software Property-Right Council, which monitored 104 businesses including online service providers and portals, damage from software piracy there amounted to 302.6 billion won.

This is three times larger compared with the figure in 2009, and the biggest since 2006 when the council started monitoring it.

“When considering that our online monitoring includes only part of uploads and downloads on the Web, the damage could be much, much bigger than this,” said Kim Eun-hyun, vice chairman at the council.

The software that was the biggest victim of piracy was Windows by Microsoft with 20,261 pirated cases in 2010, up 71 percent from the previous year. Hangul programs from Hancom and Office by MS were also being frequent targets of illegal copying.

By company, Microsoft was the biggest victim. One third of all software piracy was on products developed by the U.S. company. Adobe Systems followed with 21,369 cases, and Hancom with 14,207.

Online service providers channel for piracy

Nine out of ten incidents occurred on online service providers such as Webhard, an online storage service. Damage from piracy through these services reached 293.1 billion won in 92,915 cases.

There were also near 10,000 cases of piracy through Internet communities or blogs as people uploaded and downloaded software through bulletin boards.

The council said that 72 heavy up-loaders, who posted over 100 illegal copies of software on online service provider sites, were responsible for 22 percent of the damage.

Koreans insensitive to software copyright

Though Korea is one of the global leaders in the IT sector, statistics show that Koreans are insensitive to the rights of software developers. According to the council, the ratio of pirated software stands at 41 percent here, while that of most other OECD countries remains at below 30 percent. “The idea is prevalent among people here that software is free. They have no hesitation downloading it,” said a representative for Korea Software Property-Right Council.

She said that individuals are rarely punished for piracy, though they are subject to up to five years’ prison term or a 50 million won fine. “Piracy is so prevalent that most of people here should have used illegal software once or twice. Hence, it’s mostly businesses rather than individuals who get punished for piracy,” she added.

The practice is decimating the software industry as well as negatively affecting the IT business. The council estimates that a 10 percent decrease in piracy would create between 56,000 to 88,000 jobs.

Anti-piracy measures here have proven to be largely ineffective. Even conglomerates have shown insensitivity toward the rights of developers. Lotte Mart, a retail chain run by the Lotte Group, is under attack over suspicions that it overlooked pirated versions of Hangul and MS Office on netbooks sold there.

“The damage from software piracy has reached an alarming level, as shown in our online monitoring this time and sales of netbooks with illegally copied software at Lotte Mart. Users should change their notion about software. They should make sure to use legal versions and the regulator should take measures to stop piracy,” Kim said.

The council plans to expand online monitoring to set up a better culture in software distribution and consumption.

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