Why Software Piracy Persists in Latin America

Note: these comments by Richard Neff were excerpted in Latin America Advisor; Neff as former Chairman of the Business Software Alliance was asked to comment on BSA’s Annual Worldwide Piracy Report.

In 1989 when I was an in-house lawyer at a Business Software Alliance member company (Ashton-Tate), and BSA director, I spearheaded the establishment of more than 20 antipiracy programs for the BSA in Latin America and the Pacific Rim. Piracy rates in Latin America were above 90%. Most countries lacked copyright laws that protected computer software. It seemed that only US Embassies had legitimate software.

Over the next decade, on behalf of BSA members such as Microsoft, Adobe, Autodesk, Symantec and Apple, we worked with lawyers and legislators throughout Latin America to strengthen copyright protection in each country. We also brought thousands of legal actions against resellers and large corporations and banks, worked with police and prosecutors to bring criminal actions, sought to publicize the actions when possible, and we tried to educate the public about intellectual property protection. Our goal was to create a culture where intellectual property rights, at least in computer software, would be respected.

As a result, from 1989-2003, piracy rates in Latin America were cut roughly in half and a multibillion dollar software market was created. However, business piracy rates have hovered in the 50% range in most major Latin American markets for nearly a decade, without much improvement. Venezuela is an outlier, where civil society has all but died and piracy rates have increased. Why do high rates persist?

I believe there are at least three reasons:

  1. The low-hanging fruit thesis: many of the larger organizations, including some governments, have legalized, leaving piracy rates much higher in small businesses. Often, it is not as cost effective to fight piracy in, say, a dental office that may have 5 computers.
  2. Possible under-investment in combating piracy: some of the major software publishers in the early fight against software piracy have invested less in the effort over the past decade. I have heard that the BSA program is less visible. Where enforcement declines, piracy rates climb.
  3. Dysfunctional governments and judiciaries: as Transparency International demonstrates each year, and as we experienced during our piracy prosecution in Latin America, police, prosecutors and courts struggle with scarce resources, and corruption takes an inestimable toll. We ran up against corruption often, and it makes it unlikely that countries like Mexico, Argentina and Brazil will ever have piracy rates as low as those in Canada, the US and the UK. Chile is a notable exception to regional corruption, and Brazil is slowly improving.

So what can be done? First, technology can be used to fight piracy. Companies can use various mechanisms to track excessive use, or even disable such use. Second, new delivery mechanisms such as the Cloud (SaaS systems) very much reduce piracy, as the software is resident on remote servers, so there is nothing for pirates to copy and distribute. Finally, it is worth noting that societies that create intellectual property are better at protecting it. Latin America is not a major innovator, but is beginning to generate more intellectual property.

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