Microsoft Cracks Down on Counterfeit Software Auctions Worldwide

Microsoft Cracks Down on Counterfeit Software Auctions Worldwide

October 31, 2006

Latest Enforcement Efforts Help rid Auction Sites of Dangerous Software.

    REDMOND, Wash., Oct. 31 /Xinhua-PRNewswire/ -- Less
than one week after IDC released a study* sponsored by
Microsoft Corp., detailing the risks of using counterfeit
software, and six weeks after Microsoft released its own
forensic analysis of counterfeit discs, Microsoft announced
a series of criminal and civil actions taken against alleged
dealers of counterfeit software around the world. Today's
announcement marks the largest enforcement effort by
Microsoft and the first time the company has focused its
efforts worldwide to bring legal action against online
dealers. The 55 legal actions include 15 in the United
States, 10 in Germany, 10 in the Netherlands, five in
France and five in the United Kingdom, as well as
proceedings in Argentina, Australia, Belgium, Korea, Mexico
and Poland.

    (Logo: 
http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO )

    The cases are against sellers who allegedly have
misused their eBay or other auction-site accounts to sell
counterfeit software to unsuspecting consumers and
businesses. Many of the defendants received warnings for
infringing behavior before the legal action, including
written cease and desist orders and/or removal of their
auctions by the online host. In each case subsequent
investigation and/or test purchases revealed copyright and
trademark infringement by the defendant seller. 

    Many of the allegedly infringing sellers were
identified through tips submitted from consumers through
Microsoft's Windows(R) Genuine Advantage (WGA) program. As
part of the WGA, consumers can verify whether their
Microsoft(R) software is genuine, and in the process
receive product downloads, Windows updates and other
special offers. The WGA program is designed to
differentiate the value of genuine Windows software from
non-genuine, and to educate consumers about the potential
risks associated with counterfeit software. More program
information is available at
http://www.microsoft.com/genuine . 

    "Counterfeit software is defective and dangerous
because counterfeiters tamper with the genuine software
code, which leaves the door open to identity theft and
other serious security breaches," said Matt Lundy, a
senior attorney at Microsoft. "It is simply not worth
putting your personal and confidential information at risk
to save a few dollars on software; it can cost much more in
the long run. For our part, Microsoft is committed to taking
the necessary legal action to protect consumers worldwide
from the dangers of counterfeit software." 

    Microsoft launched the Genuine Software Initiative
earlier this year, and since then has intensified its
efforts to protect consumers and channel partners from the
risks of counterfeit software through an increased focus on
education, engineering and enforcement. "Every year,
millions of consumers are victimized by unknowingly buying
counterfeit software," said Joe Peterson, corporate
vice president of the Market Expansion Platforms Group at
Microsoft. "This is a serious problem that requires a
significant commitment to help solve. We're making that
commitment as we invest in efforts to show people what to
look for and what to avoid, innovations to better protect
the software, and legal action to protect consumers when
necessary."  

    New Study Details Broader Effects of Software Piracy

    According to the new study from IDC, acquiring and
using counterfeit product keys, pirated software, key
generators and crack tools for Windows XP and the Microsoft
Office system may increase the risk of exposure to viruses,
worms and other damaging code, including spyware, Trojan
horses and modified code. In addition, IDC's study noted
that purchasing software through online auctions often
results in the acquisition of counterfeit software
containing tampered-with code or other known
vulnerabilities. The study can be found at
http://www.microsoft.com/athome/security/update/wga/default.mspx
.

    The IDC study comes on the heels of a forensic analysis
of counterfeit Windows XP disks conducted by Microsoft in
June 2006, which found that 34 percent of the disks could
not be installed on a computer, and another 43 percent
contained additional programs, or binary code, that are not
part of genuine Microsoft Windows. The tampered code,
according to Microsoft, could result in trouble such as
denial-of-service attacks, bypassed password protections
and application memory corruption. 

    John Gantz, senior vice president of IDC, said that
IDC's new study and other existing evidence should serve as
a warning to consumers. "Our research confirmed that
searching for and finding counterfeit software on the
Internet can be the cyberspace equivalent of driving a car
with defective tires," Gantz said. "It is more
important than ever for users to educate themselves about
these dangers. Our findings underscore the simple fact that
there are real costs in the form of increased risks to
security and personal data that can easily outweigh any
perceived savings from using counterfeit software."

    Also reported in the study, Microsoft intervenes in
about 50,000 eBay software auctions a year that are deemed
to be infringing copyright. In tests conducted by Microsoft
of 115 copies of physical media purchased on eBay, 39
percent were found to be counterfeit, and another 12
percent contained software that was either counterfeit or
had been tampered with. Overall, the study found, the
chances of purchasing genuine, legally licensed Microsoft
software on eBay is less than 50 percent.

    IDC estimates that the cost for an organization to
recover from even a single incident of malicious software
on a single workstation can run more than $1,000 (U.S.).
The cost of lost or compromised data can run into the tens
of thousands of dollars per incident for many businesses.

    Founded in 1975, Microsoft is the worldwide leader in
software, services and solutions that help people and
businesses realize their full potential.

    * IDC, "The Risks of Obtaining and Using Pirated
Software," Oct. 23, 2006

    NOTE:  Microsoft and Windows are either registered
trademarks or trademarks of Microsoft Corp. in the United
States and/or other countries. 

    The names of actual companies and products mentioned
herein may be the trademarks of their respective owners.

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SOURCE  Microsoft Corp.