Software piracy in Malta costs $7m

Illegal copies of computer software in Malta has an estimated commercial value of $7 million, according to the 2009 piracy study by the International Data Corporation (IDC), a market research firm specialising in information technology, and the Business Software Alliance (BSA), an international non-profit trade association created to protect the software industry and its hardware partners.

This figure has gone up from $5m in 2005 despite the piracy rate remaining relatively stable at 45 per cent, 10 per cent above the EU average, in the same period.

“There could be several explanations for this,” according to Georg Herrnleben, BSA’s senior director for compliance marketing in Europe, Middle East and Asia. “One is that established markets with a strong local IT industry typically have lower piracy rates, see Japan, the US and the Nordics for example. Secondly, piracy is more prevalent in some industries than others. Services and media typically have high piracy rates, so one could assume that the strong Maltese tourism and movie industries contribute to the higher piracy rate.”

Over the years the piracy rate in Malta registered in BSA’s reports has gone down from around 90 per cent in the mid-1990s to 45 per cent in 2009. Since then Malta’s IT industry has evolved and matured, and this, in conjunction with other factors, has led to the downward trend.

“Malta joining the EU contributed to the harmonisation of its laws and legal enforcement mechanism, which could have had an effect as well,” added Mr Herrnleben.

Indeed the official sale, at a nominal price, of popular software like Microsoft Windows, the most popular consumer operating system in the world, and Microsoft Office, the office productivity suite, thanks to an agreement between the Maltese government and Microsoft and in the early Noughties could have also lessened the problem of piracy. Maltese computer users were able to buy perfectly legal copies at a fraction of the retail price without going through the hassle of cracking increasingly sophisticated software protection technologies.

Microsoft has been one of the most, if not the most, active international software manufacturer to keep an eye on developments on software piracy in Malta, despite Malta’s small market size. Indeed in 2009 Microsoft Malta hired an executive responsible for its anti-piracy initiatives locally.

A few weeks ago the BSA launched an anti-piracy campaign in Malta, complete with adverts in the traditional and online media, to urge users to report cases of piracy. However the BSA refutes claims that the campaign in Malta is the result of pressure from one of its members.

“BSA is a member-driven organisation, so in many markets our members’ initiatives will drive BSA action. Keep in mind, though, that BSA is an alliance of several software manufacturers and no one of them has precedence over the others. So campaigns in Malta or any other market are a result of all our members agreeing on the strategy, with the BSA signing off on all campaigns,” insisted Mr Herrnleben.

While the BSA does not have any data on which kind of software is pirated most, from experience it can tell that the most pirated types of software are typically the same as those sold most often, which makes sense.

“People pirate what they can use and what they need, which are also the motivation for buying legally. So the top 10 in the software charts of Malta are probably also the top ten in the piracy charts for Malta.”

Asked about the channels for piracy, the BSA executive said they did not have such data either. However, peer-to-peer and multiple installations of a single legally bought copy of software are certainly among the most widely used methods of piracy. Installation of illegal copies of operating systems and other applications (hard-disc loading) by computer stores on PCs ready for sale has also always been a concern to BSA.

On Peer-to-peer infringements, BSA has just launched the internet piracy portal ( http://internet.bsa.org ) which also gives monthly figures for the number of infractions reported from Malta. Between January and April this year 727 reports were filed with the BSA, with January topping the chart with 240 and just 95 reports in April. In comparison, in Italy, over 157, 263 cases were reported, France was second with 82, 432 and Spain third with 76, 125 reports.

Although Malta’s software piracy rate is above the EU average, the BSA is by no means targeting Malta.

“At any given time, BSA conducts several campaigns across Europe, many of which have similar messaging and focus. While it is rare that a specific campaign will cross the borders of a country, the campaign in Malta is by no means the only market where we are running anti-piracy campaigns. BSA campaigns are designed to raise public awareness of software piracy and to inform businesses and consumers about technical and legal risks which are caused by using illegal software.”

“While we welcome leads from all concerned parties, we usually do not get any notices from employees spying on their boss. Rather, we get contacted by IT professionals or users who have noticed under-licensing in their company, have tried to bring the problem to their superior’s attention, and have been rebuffed. Often, these IT professionals are worried that they will be legally accountable for the illegal state of affairs. They reach out to the BSA to help set things straight when their boss won’t do it.”

The software industry is going through an important transformation, with the rise of so-called Open Source Software (OSS), which is sometimes available free of charge or can be better adapted to the needs of an organisation. There are good alternatives to the most popular vendor-specific software, and even the Maltese government has recently embarked on exercise to exploit OSS where possible.

“The rise of Open Source Software seems to have little impact on piracy. The piracy rate and the commercial value of pirated software have risen over the last years even as OSS has become more accepted in many markets. Even when faced with possible legal charges, users seem to prefer commercial software with its support, maintenance and reliability. A study, commissioned by BSA, examined these attitudes in detail, the results will be available in mid-May,” added the BSA executive.