Software Piracy in Asia: Findings by the BSA

The latest study by the Business Software Alliance (BSA) on software piracy shows that the fight against piracy in the Asia Pacific region is still a work in progress.

The overall piracy rate in Asia Pacific is 60 percent, the same as last year. In comparison, the global software piracy rate is 42 percent.

Among the countries in the region, Bangladesh has the highest piracy rate. There, an astonishing 90 percent of software is pirated. The country with the lowest piracy rate is Japan with 21 percent.

Among the major economies in Southeast Asia, the piracy rate, while high, appears to be improving slowly. Both Indonesia (86 percent) and Thailand (72 percent) saw a 1 percent drop, while Vietnam (81 percent) saw a 2 percent decline. Unfortunately, the Philippines bucked the trend with piracy rates there increasing by 1 percent to 70 percent.

In South Asia, the results were mixed. Piracy rates dropped in India (63 percent) and Sri Lanka (84 percent) by 1 and 2 percent respectively, and was unchanged in Bangladesh. Piracy in Pakistan, however, saw a 2 percent increase to 86 percent.

In Northeast Asia, piracy rates dropped in China (77 percent) and Hong Kong (43 percent) by 1 and 2 percent respectively, and remained the same in South Korea (40 percent) and Taiwan (37 percent). While Japan's piracy rate was the lowest in the entire Asia Pacific region, this was a 1 percent increase over the year before.

Overall piracy rates only tell one story though. When we look at how much software (by retail value) is being pirated, we get an idea of the size of the problem. While the overall piracy rate did not change, the retail value of pirated software in Asia increased to US$21 billion, up from US$18.7 billion. Given that the total commercial value of pirated software last year was US$63.4 billion, this means that Asia makes up 33.1 percent of the total.

The biggest problem lies in China. Some US$8.9 billion worth of software was pirated in China, far ahead of runner-up India, where the equivalent amount was US$2.9 billion. Behind India was Japan with US$1.9 billion and Indonesia with US$1.5 billion.

These results show that there is still much work to be done to combat software piracy in the region. This is backed up by the BSA study which found a "troubling lack of incentive among admitted pirates around the world to change their behavior". In emerging markets, only 15 percent of pirates were afraid of getting caught, compared to 20 percent in mature markets. According to the study, the results suggest that "there is a need for authorities to ramp up enforcement to send a stronger deterrent signal to the marketplace".

Part of that pressure will come from the US federal government. In an April report by the Office of the United States Trade Representative, 13 countries were put on the Priority Watch List based on their approach to intellectual property rights protection and enforcement. Of the 13, five were from Asia, namely China, India, Indonesia, Pakistan and Thailand. According to the USTR, these 13 countries would be the "subject of particularly intense bilateral engagement during the coming year".

Around Asia, governments are beginning to respond to the pressure and are doing something about it. One of the shining examples has been Malaysia which was taken off the USTR's list this year, thanks to the country’s efforts at improving the situation for copyright owners. Notable efforts in Malaysia include implementing Intellectual Property Courts, doubling the number of corporate end user raids and imposing minimum fines for copyright infringement. More recently, the Malaysian Government is looking at innovative ways to reduce piracy, including encouraging companies to conduct software audits at the same time they conduct their yearly financial audits so that compliance is part of regular business operations.

Vietnam has made efforts to fight piracy as well. Since October last year, the Copyright Office of Vietnam has organised a series of seminars with the BSA aimed at educating Vietnamese companies about Intellectual Property (IP) law developments. In addition, the authorities have also begun cracking down on the use of pirated software by companies, including manufacturing companies, which is great to see and deserves recognition. However, the fines imposed on offenders are often very small, vastly disproportionate to the losses suffered by the copyright holders or the costs of legitimate software. This, then, does not act as sufficient deterrence.

In Thailand, there are indications that the government is stepping up action against cinema and Internet piracy, going so far as drawing up new IP legislation to better protect copyright holders.

Still, more needs to be done around Asia, and here, we at Microsoft can help. Microsoft is committed to working with governments in Asia to spread the message that when IP rights are respected, everyone benefits.