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Unlicensed software cost European businesses over $16 million

Unlicensed software has cost European businesses over $16 million in 2009 as a result of legal action by the Business Software Alliance (BSA). Last year, the BSA received nearly four thousand leads regarding companies using unlicensed software and conducted 2,256 legal actions across Europe.

In Hungary, during 2009 BSA continued its activities in generating leads and providing input to police as well as the customs and finance authority. 152 leads have been provided to BSA through the telephone and email hotline service, while in 121 cases legal actions have been initiated against those violating the copyrights of the software manufacturers. Settlements have been made in 15 cases, resulting in total costs for the business of $1,133,741.

The statistics speak about increasing efficiency in the fight against illegal software. This is significantly due to the cooperation between the Police, the Customs and Finance Guard, other authorities on the one hand, and the Business Software Alliance, on the other hand. This is an area where technology, practices and licensing rules change. It is important that members of the authorities have an up-to-date knowledge so that they can fight efficiently against counterfeiting.

BSA provides ongoing support to these authorities, the latest of which has been the recent training provided to the members of the Customs and Finance Guard. The success of such trainings prove that it is in the interest of the BSA, its members as well as the authorities that the use of illegal software decreases and companies chose legal solutions when obtaining new software.

“Over the year, BSA stepped up its legal efforts, securing a greater number of settlements than in 2008,” said Sarah Coombes, Senior Director, legal affairs EMEA for BSA. “These results send out a strong message. In this tough financial climate, companies need to ensure that the software they use is properly licensed. Otherwise, they risk incurring the costs of legal action in addition to the software licenses necessary for future business use.”

“The $16 million cost to business only includes the amount paid out as a direct result of BSA legal actions. However, the real cost is higher as this sum excludes companies’ own legal costs, or indirect costs such as the disruption to business operations, the impact to cash flow of having to make unplanned software purchases, not to mention the damage to companies’ reputations. Use of under-licensed software is wrongly perceived as a way to cut corners but instead exposes the business to enormous risk.” – said Sarah Coombes.

“While BSA has a strong legal program, we are also concerned with educating businesses on the importance of legal software use and making it easier to stay compliant,” - commented dr. Katalin Szamosi, the legal counsel of BSA Hungary. “We offer a range of information, free tools and advice. These help businesses to better understand and manage their licensing requirements and can help them to stay compliant. Indeed, effective management of software can actually save money, by identifying underused software. Our most well known such tool in Hungary is the Softvisit program, where our representative visit various companies and provides information and advice in issues such as software licensing and software asset management,” – said the legal counsel.

As well as the cost to business, use of unlicensed software also has a significant detrimental effect to the economy. According to IDC’s 2008 Piracy Reduction Impact Study, a 10% reduction in software piracy could contribute $274 million to the GDP of Hungary, and provide an additional $63 million in tax revenue and 1,100 new jobs. (BBJ Online)