High-tech whistle-blowing, U.K. style

Software piracy remains at epidemic rates, but attorney Eric J. Sinrod says maybe the answer is more carrots and less sticks.

3 min read
Despite years of threats and pleas, software piracy in the workplace remains a big deal.

The unauthorized and unlawful use of software deprives software owners of significant licensing fees. So why do businesses allow the use of pirated software? A couple of possible answers come to mind.

If there's sloppy oversight, an employee can copy and distribute software while nobody else within the company checks whether there's a proper license.

Sometimes, the "something for nothing" attitude prevails. If a company purchases a program, it might incorrectly assume it's entitled to copy and disseminate that software without paying for additional licenses. Once in awhile, a company even intentionally pirates an application, wrongly viewing this as a way to save on licensing fees.

The research shows that disgruntled employees are even more likely to report illegal activity and that poor salary reviews heighten willingness to blow the whistle.

So how do you change human behavior? The Business Software Alliance, an organization dedicated to advancing the global interests of the software industry, has come up with a novel approach. The BSA has offered rewards in the United Kingdom to employees reporting the illegal use of software within their businesses. The original reward was up to 10,000 pounds (about $18,700) but in honor of World Intellectual Property Day last month, the BSA doubled the limit on the reward through the end of June. Even though employees may fear retribution for whistle-blowing, the BSA hopes that the potential for rewards will provide enough of an incentive to overcome their hesitation.

Recent research by YouGov indicates that 64 percent of U.K. employees would report illegal software activities to an external body if they had raised an alarm internally that was ignored. Perhaps not a huge percentage, but at least it is more than 50 percent.

The research shows that disgruntled employees are even more likely to report illegal activity and that poor salary reviews heighten willingness to blow the whistle.

The problem is not hypothetical. According to researcher IDC, 27 percent of software used in U.K. businesses is illegal. This equates to more than 1 billion pounds (about $1.8 billion) in lost licensing fees to software companies. And there is no question that illegal software use pervades businesses in other countries.

According to the research, a drop from 27 percent to 17 percent with respect to illegal software use within U.K. businesses would generate 2.8 billion pounds ($5.2 billion) in tax revenues for the U.K. government--enough to pay for 80,000 police personnel or 113,000 nurses. One can easily imagine the magnitude of revenue generation on a global scale resulting from such a drop in workplace software piracy.

It will be interesting to see what the BSA's whistle-blowing reward program will accomplish. Rather than wait to be busted, businesses can take steps on their own to find out if they are software-compliant. Will it work? The governing assumption is that rewards for software piracy whistle-blowing will encourage employees to come forward to report piracy. Disgruntled employees and employees who already intend to leave their place of employment likely would have little disincentive to blow the whistle, and they probably would have positive financial incentive to do so given the potential for a reward.

On the other hand, employees who intend to stay at their jobs in most cases would not want to potentially jeopardize their positions by placing their employers in software piracy hot water. Any allure of a momentary reward could be nullified by the internal adverse consequences of blowing the whistle. While it's true in a perfect world that employees are not supposed to suffer retribution for doing the right thing, real-world fear of retribution could stand in the way of coming forward to report privacy.

The BSA provides free software-auditing tools, tips and advice. The BSA also has launched software licensing and management guides. To access this information, consult the BSA Web site at http://www.bsa.org.