Improved enforcement and legislative harmonization keep piracy rate stable – but the new Criminal Law Directive could be a step backwards and lead to the creation of an EU “internet piracy haven”
Ireland’s Piracy Rate decreases by 1 percentage point to 36% for 2006
Dublin (15th May, 2007) – A Global Software Piracy Study from the Business Software Alliance (BSA), shows that the software piracy rate in Ireland has continued to drop - to 36% - the European Union average - in 2006, but losses to industry from illegal software installed on personal computers dropped by $1billion. However, despite this drop, losses in the EU remain high at $11 billion and losses in Ireland are at $92 million.
The findings are the result of the fourth annual Global Software Piracy Study, released today. The study was conducted independently by leading information technology market research and analysis organisation, IDC.
“While we are seeing progress across the region there is still much to be done to address what is a significant, growing problem. Government, trade bodies and business must continue to tackle software piracy aggressively if financial losses, which impact the local economy and local IT industry, are to be reduced,” said BSA President and CEO Robert Holleyman.
The piracy rate within the EU has dropped from 37% in 2003, despite the market expansion to 25 countries in 2004, reflecting positively on efforts to address piracy within the region. Significantly harmonized European legislation has had a positive impact on enforcement efforts, helping keep the piracy rate stable since 2005.
In Ireland the rate has consistently shown small decreases since the introduction of the Copyright and Related Rights Act bill 2000, with the rate decreasing from 56% in 1999 gradually each year to the current rate of 36% for 2006. This has come about because the BSA has invested significantly in education and enforcement programmes in Ireland to raise awareness of the issues around software piracy, and software asset management and compliance, as well as benefiting from one of the most stringest copyright laws in Europe.
Kathryn Raleigh, Director of ICT Ireland said “ I welcome the continued reduction of piracy rates in Ireland. Of the 10 major software companies in the world, 7 have a substantial base in Ireland. So the ICT sector is of huge importance to Ireland. It is therefore vital that Ireland reduces its piracy rate and respects intellectual property if Ireland is to remain attractive to foreign direct investment and maintain competitiveness on a global scale.”
Nevertheless, losses are still significant and software piracy remains a serious economic threat to local and national IT markets – from start-ups to established business –in Ireland and within the Union. Effective legislation to protect businesses and local economies remains a critical element in counteracting and eliminating the piracy threat, especially with regards to the use of the Internet to distribute illegal software. One area of concern for the future is the potential impact of the Criminal Law Directive, recently voted on by the European Parliament.
The Directive aims to harmonise regulations across the EU relating to criminal enforcement of intellectual property rights. Some definitions within the Directive could enable individuals to upload software to the Internet for download by others as long as they do not commercially profit by it. This reflects the current legal situation in countries such as China, where businesses have found protecting their intellectual property rights very challenging, despite a 10 percentage point reduction in China’s piracy rate over 3 years.
Francisco Mingorance, Director of Public Policy for the BSA Europe said: “By introducing a "for profit" requirement, the EU parliament sent a strong political signal that runs counter to the efforts of European governments to improve market access in emerging markets. As a result, this new directive could protect Internet "release" groups that sit at the very top of the pyramid of digital pirates and engage in online piracy for thrill and notoriety rather than for economic profit. Unfortunately their actions still have a significant cost impact on the software industry and also assist the spread of viruses and other forms of malicious code”.
IDC has found that in developed countries increased availability of broadband has led to the Internet becoming the predominant distribution channel for illegal software. At present in emerging economies, CD counterfeits are still preferred but as these markets become more established the Internet is likely to become a more popular medium.
The study also reflects the fact that while Western Europe still generates the highest losses in EMEA, the IT market in CEE is growing more than twice as quickly, resulting in EU losses remaining high. Piracy rates in Central and Eastern Europe (CEE) dropped by 1 point to 68%, but due to faster economic growth, losses increased by $862 million to $4.1 billion.
Other Key findings:
• Finland and Germany saw piracy increases of ½ a percent but losses still decreased. This is due to the markets being more established and investment being made in lower cost software more than high end programmes.
• Greece saw a piracy rate drops of 3%. This was due to legislative and enforcement action in both cases. New legislation has empowered the Greek Tax Police to require data on software assets
• Slight decreases in France, Italy and the Netherlands led to significant reductions in industry losses due to piracy - $515m, $161m and $177m respectively.
• Legislation and well-publicized criminal enforcement actions, including police or government official raids on businesses, have helped piracy rate drops in Czech Republic and Poland (1%) and a stable rate in Hungary - but losses increased in all cases due to fast market expansion.
• IDC estimates that over $350 billion will be spent on PC software over the next four years. Given current market growth and piracy levels it has predicted that this will translate into more than $180 billion worth of PC software being pirated.
The BSA-IDC Global Software Piracy Study covers piracy of all packaged software that runs on personal computers, including desktops, laptops and ultra-portables. The study does not include other types of software such as server- or mainframe-based software. IDC used proprietary statistics for software and hardware shipments and enlisted IDC analysts in 50 countries to confirm software piracy trends.
Download the study's whitepaper
Download the piracy rate datasheet
For more information about the study, visit www.bsa.org/globalstudy.
About BSA
The Business Software Alliance is the foremost organization dedicated to promoting a safe and legal digital world. BSA is the voice of the world's commercial software industry and its hardware partners before governments and in the international marketplace. Its members represent one of the fastest growing industries in the world. BSA programs foster technology innovation through education and policy initiatives that promote copyright protection, cyber security, trade and e-commerce. BSA members include Adobe, Apple, Autodesk, Avid, Bentley Systems, Borland, CA, Cadence Design Systems, Cisco Systems, CNC Software/Mastercam, Dell, Entrust, HP, IBM, Intel, McAfee, Microsoft, Monotype Imagine, PTC, RSA, The Security Division of EMC, SAP, SolidWorks, Sybase, Symantec, Synopsys, The MathWorks, and UGS. Current members for Ireland are: Adobe, Apple, Autodesk, Avid, Bentley Systems, Microsoft, Monotype, Symantec, Tekla,and UGS.
About IDC
IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. Over 850 IDC analysts in 50 countries provide global, regional, and local expertise on technology and industry opportunities and trends. For more than 42 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.
Further Information and interviews or a copy of the Study: Aileen Eglington, AE Consulting, BSA Ireland Committee Spokesperson
93 Upper Georges Street
Dun Laoghaire
Co Dublin
Ireland
Phone: 353 1 2847796
Fax: 353 1 2847618
Mobile: 353 87 2505007
Web: www.aeconsult.ie
