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Software piracy losses double

Study says 92 percent of software in Vietnam and China is pirated. Trade group blames peer-to-peer networks for problem.

Software manufacturers lost $29 billion to piracy in 2003, more than double the previous year's losses, according to an industry survey released Wednesday.

About 36 percent of software installations worldwide are pirated copies, the study by trade group Business Software Alliance and market researcher IDC showed. In dollar terms, the losses were greatest in Western Europe, where piracy cut revenue by $9.6 billion in 2003, followed by Asia and North America.

The Business Software Alliance blamed the rapid spread of piracy on so-called peer-to-peer networks, where Internet users illegally swap software and other files such as music for free or at discounted prices.

"Peer-to-peer file-sharing services are becoming a huge problem for us," said Jeffrey Hardee, the Business Software Alliance's Asia-Pacific director.

Vietnam and China had the world's highest rates, with pirated versions accounting for 92 percent of all computer software installed in each country, followed by the Ukraine with 91 percent, Indonesia at 88 percent, and Zimbabwe and Russia with 87 percent each.

Hardee identified Vietnam, China, India and Thailand as Asian countries that need to step up their fight against piracy.

"We need to see more (government) enforcement from these countries," he said.

The Business Software Alliance represents leading computer software and hardware companies including Microsoft, Apple Computer, Hewlett-Packard, Intel and IBM.

By region, about 53 percent of software applications on computers in Asia was pirated in 2003, compared with 70 percent in Eastern Europe, 63 percent in Latin America, 55 percent in the Middle East, 36 percent in Western Europe and 23 percent in North America.

But the dollar losses were largest in Western Europe, North America and Asia because of the sheer size of those markets and the growing use of expensive, sophisticated software in developed countries, said Hardee.

"In the Asia-Pacific (region), the governments really do want to develop strong IT sectors. And to do that, there's no question they have to bring down the levels of piracy. This will in turn benefit the Asian economies," he said.

Singapore, Taiwan, Malaysia and South Korea are making progress in the battle against piracy, Hardee said.

Story Copyright  © 2004 Reuters Limited.  All rights reserved.