Tech Industry

Microsoft reportedly asks China to stop state-run software pirates

The software giant is after China to clamp down on the illegal use of Office and other software by four state-run firms, says Bloomberg.

Microsoft wants China to curtail the use of pirated software at four of the country's state-run companies, according to a story out today from Bloomberg.

Microsoft has reportedly already issued complaints against China National Petroleum (CNPC), China Post Group, China Railway Construction, and TravelSky Technology, all of which are run by the Chinese government.

Redmond believes that more than 40 percent of Office and Windows Server client software used by CNPC is pirated, Bloomberg reported, citing information from "three people familiar with the situation."

A spokesman for CNPC declined to comment to Bloomberg on the allegation. A spokesman for China Post called Microsoft's charges "inaccurate." And a representative for China Railway Construction told Bloomberg that Microsoft's estimates of software piracy were "greatly exaggerated."

CNET contacted the four Chinese companies accused of piracy and will update the story if we receive more information.

A spokesman for Microsoft told CNET that the company had no comment on this specific case but sent us the following statement:

Microsoft works with a variety of organizations around the world to highlight the benefits of increased protection of IP rights. This includes ongoing discussions with China about promoting innovation and protecting intellectual property. We are pleased with the progress China has made to protect IP over the past year, and look forward to continued progress in the year ahead.

Software piracy in China has long been a thorn in Microsoft's side. In January, the company sued several Chinese companies over piracy claims. In July, Microsoft took action against nine more companies that it accused of running unlicensed software.

In May, Microsoft CEO Steve Ballmer met with Chinese Vice Premier Wang Qishan, according to the Chinese government's Web portal. Wang promised to continue to crack down on software piracy. But clearly Microsoft feels the country needs to take the issue more seriously.

The Business Software Alliance, an industry grade group, said in May that the value of all pirated software around the world reached $63.4 billion last year. The group also singled out China as one of the prime sources.

"By its sheer scale, China has the most troubling piracy problem," the BSA said. "China's illegal software market was worth nearly $9 billion in 2011 versus a legal market of less than $3 billion, making its piracy rate 77 percent. Moreover, buyers in China spend just $8.89 per PC on legal software, less than a quarter of the amount buyers spend in other BRIC [Brazil, Russia, India, and China] markets."

Updated 9/21 4:30 a.m. PT with response from Microsoft.