Microsoft, Feds, and Chinese authorities seize $2bn in pirated software

Pirated Microsoft software, estimated by the firm to be worth more than $2bn, has been seized by the US Federal Bureau of Investigation (FBI) and Chinese police following a long-running joint operation which began in 2005. A network of Chinese pirating syndicates, believed to be the largest of its kind in history, had been …

[Anonymous Coward]

Odd Math?

$2 billion worth of pirated goods - apparently 55,000 copies.

Unless I've got it wrong that's $36,363 per copy

At that price no wonder people pirate it !!

[Jeff Paffett]

Microsofts figures

So, if 55,000 units of software are worth $2 billion according to Microsoft, the average unit price is $3,636. No wonder people are pirating it. And we thought M$ UK prices were extortionate.

[CJ]

Yank or Real?

Which billion is this? The yank billion which is a thousand million, or a proper full fat UK billion (or trillion as the americans call it) of 1,000,000,000,000 ?

[A. Merkin]

Verification Needed

This kind of story makes me nervous. How can I tell if my copy of Ubuntu is Genuine?

I'm suspicious because it came bundled with a full Office Suite, Vector and bitmap paint applications, MIDI and Audio editting apps and a 3D modeling and rendering app that must be worth at least $400 just by itself...

[Anonymous Coward]

First guy was right...

...it's thirtysix grand a pop, not three point six.

As to CJ's billions confusion, get with the 21st century, granddad. Or even just the second half of the 20th. The 10^9 billion isn't just the US one anymore, it's what a billion means here in the UK and everywhere else as well and has done for several decades now, for the simple reason that 10^12 is way too big a number to be of much use on the ordinary human scale of activity, where 10^9 is a practical amount. The small billion can be used in all sorts of places, from national budgets to mass manufactured widgets. The big billion is useful for counting the US national debt, and nothing else at all!

[Tom Simnett]

A little confusion here, I feel

The article says... "Pirated ... software, estimated ... to be worth more than $2bn"

It then goes on to say... "estimated that the pirated software it had seized had a retail value of $500m"

And then... "55,000 seized copies".

At $2bn, that would be $36,363 per copy, and at $500m, still $9,091! Either is a ridiculous amount of money for copies of Microsoft Software, unless of course it is the infamous $24,000 per cpu licence of MS SQL...

[SpitefulGOD]

Grass

Was the gang grassed up under the "grass em up and get 5%" deal? if so someone will be making some money.

[Anonymous Coward]

Business

The 2 bn obvioulsy includes non-tangible damage estimates, there is more to the M$ business than selling OS.

[Steve Roper]

So - what else is new?

Well, nothing unusual here, we all know the anti-piracy lobby likes to inflate, or in this case blatantly falsify, their figures to make the problem look bigger than it is. But $36K per copy just makes them look like complete and foolish liars.

At least the authorities are working on the REAL pirates, not P2P filesharers this time. I have no sympathy for anyone who gets busted SELLING someone else's work. Merely sharing information, though, is NOT piracy despite what the anti-piracy lobby wants you to believe. If someone downloads a copy of Vista, no money has been lost because no money has changed hands, and there's no indication the downloader would have bought the software anyway. But if someone BUYS a counterfeit copy, that IS money lost because the buyer was prepared and able to pony up for it, and the money didn't go where it should have.

[Anonymous Coward]

RE: Yank or Real?

Since it's Microsoft and all financial institutes do their sums the American (can't count as well as can't spell) way the value is 2 Thousand Million.

When was the last time anyone one in the news used the proper billion (1 million million) value?

I would even bet that Billionaires are not true billionaires but thousand millionaires.

[Nigel]

re : "10^12 is way too big a number to be of much use..."

Unless you are talking about the US military budget.

[Benjamin Kunz]

Neusprech..

I can't help but wonder how pirated software can be "worth" it's retail price in the first place anyway.. How much money would have been made, and lost to MS, if those people had not been caught?

[Anonymous Coward]

2 Billion my arse

Having scouted the back streets, bazaars, markets and shopping centres of Asia, I've seen pirated copies of OSes, databases, graphics programs, music all with the singular quality that you pay a fixed price per DVD - this ranged from $2 to $7 depending on how upmarket the shopping centre was. The DVDs are also notable in that each DVD is crammed to capacity. IF Vista only takes up 2GB, then you will also get XP Home Edition, XP Professional, ME and 95 included on the same DVD along with a few 'bonus' programs such as PhotoShop! Again all for an average price of $5...

This makes the actual loss to the counterfeiters of approximately $275K, assuming all copies of whatever were on separate discs. A far cry from a 'wake-up call to counterfeiters' ....

[Dai Kiwi]

To clarify the numbers...

The FBI's press release - http://losangeles.fbi.gov/pressrel/2007/la072307.htm - says a total of 290,000 discs & certificates worth $500 million were seized in a number of operations. At one of the locations 47,000 M$ discs were found.

It looks like all the usual major firms were represented. That looks a bit more reasonable:

- $500 million / 290k = ~$1,725.

Microsoft's $2 billion figure is the estimated worth of the software produced by the counterfeiters over the life of their operation - 2+ years. M$ actually examined 55,000 discs over the course of the investigation.

Their press release is at http://www.microsoft.com/presspass/press/2007/jul07/07-24CounterfeitingSyndicatePR.mspx

Of course, as others have pointed out, full retail cost has no bearing on the amount the discs were actually sold for. It is also impossible to say what proportion of the sales represent genuine 'lost sales' to the genuine manufacturers. I wish there was some research into that last bit - both for software & for music/TV/movies.