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Taiwan Group Responsible For 90% of MSFT Piracy

Posted by kdawson on Tue Feb 05, 2008 02:34 AM
from the so-this-means-the-bsa-can-disband-right dept.
Stony Stevenson writes "Microsoft claims that a small group led by a recently jailed Taiwanese man was the source of almost all high-quality pirated copies of its software up until his arrest in 2004. The claim suggests that Microsoft practically wiped out commercial piracy of its products with the arrest of Huang Jer-sheng, the owner of Taiwan-based software distributor Maximus Technology. Microsoft announced today that Huang and his associates. who were all recently sentenced to jail time, had been responsible for the 'production and distribution of more than 90 percent of the high-quality counterfeit Microsoft software products either seized by law enforcement or test-purchased around the world.'"
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  • by Electrode (255874) on Tuesday February 05 2008, @02:36AM (#22303912) Homepage
    I didn't think there was such a thing as high-quality Microsoft software, pirated or otherwise...
    • Re:High quality? (Score:5, Insightful)

      by arivanov (12034) on Tuesday February 05 2008, @02:39AM (#22303938) Homepage
      Compared to a stripped and vandalised "recovery disk" it is high quality. You could actually install from it.
      • Re:High quality? (Score:4, Interesting)

        by couchslug (175151) on Tuesday February 05 2008, @09:01AM (#22305906)
        Compared to either, a live Linux CD wins.

        I can rescue, troubleshoot, surf with, and easily install from a variety of live Linux CDs.

        The tools are there to build something similar:

        http://www.911cd.net/forums/ [911cd.net]

        using Windows PE exist, but MSFT doesn't bother. Too bad, really. It would make user lives easier.
        • Re:High quality? (Score:5, Informative)

          by just fiddling around (636818) on Tuesday February 05 2008, @07:41AM (#22305320) Journal
          You are making the assumption that the recovery disk contains all that. In fact, most of the recovery content is on your hard disk. Now, if you try to repair your PC after the original HDD fails what happens? You have a nice shiny disc, a legitimate paper "licence" to Windows and no way to install it back.

          Surprise!

          THAT is what makes "recovery disks" crap, even more than the bloatware and crapware.
        • Re:High quality? (Score:5, Insightful)

          by jimicus (737525) on Tuesday February 05 2008, @07:41AM (#22305322) Homepage
          While 90% of end users will probably benefit from a simplified recovery process, it's a pain for the other 10% for a number of reasons:

          1. The recovery disk can't be used to boot the PC into a recovery mode to try and rescue any data.
          2. The recovery disk will almost certainly blow away anything else that's on the system - potentially including other partitions containing other OS installations. Whereas a straight Windows install can be instructed not to do this. Pretty vital if you need to restore data.
          3. If the OEM provides a recovery disk, chances are the only way to get hold of a genuine, plain Windows install CD which eliminates the first two problems is to go out and buy a retail copy of Windows. Which is pretty galling when you look at the invoice for the PC and see that you've already bought Windows, you should have no need to buy it again.
          4. If you get this far and decide to buy a retail copy of Windows - ok, you've accepted that, so be it. But - ah - the PC is two or three years old and can't possibly run Vista.
          5. The bloatware on the recovery disk can make supporting PCs harder. Case in point: most wireless network cards have software which replaces the Windows user interface for wireless networking. Which means that now you can't easily talk your friend through setting up wireless networking over the phone because you have no idea what they can see.
          6. The bloatware provides a false sense of security - "I don't need AV because I've got Symantec that came with my PC" (but I didn't read the small print and it hasn't updated in 11 months).
          7. Even when the addon software is justifiable, it is frequently of pretty appalling quality. (HP, I'm looking at you and the backup application you ship with new PCs. Specifically, the application which takes backups perfectly happily but you can't easily restore from them. It's just as well I tested that before I handed the PC over to my mother).
        • Re:High quality? (Score:4, Insightful)

          by mikael (484) on Tuesday February 05 2008, @09:07AM (#22305974)
          Say you have a dual boot hard disk drive, that has three or more partitions on it (Windows partition, a couple of Linux partitions for kernels, user home directories, Swap space etc....). For whatever reason, you need to reinstall the Windows partition. As far as the recovery disk is concerned, the whole hard disk drive belongs to Windows and no-one else. So you can either delete the partition altogether or leave it as it is until Judgement day.
    • by flyingsquid (813711) on Tuesday February 05 2008, @04:40AM (#22304584)
      I didn't think there was such a thing as high-quality Microsoft software, pirated or otherwise...

      Obviously, he modified the software extensively before selling it. The fact that it was high-quality is, of course, what tipped people off that it wasn't an authentic Microsoft product.

    • By what standard? (Score:4, Insightful)

      by jdickey (1035778) <jdickey@@@seven-sigma...com> on Tuesday February 05 2008, @05:49AM (#22304846) Homepage

      Of course it's high quality; it just doesn't meet your needs.

      Vista is the first Windows infestation to officially, publicly acknowledge what serious MSFT-watchers have known for some time: the population of usees and customers are two entirely separate, non-overlapping groups.

      The usees, of course, are the poor sheeple who bought a PC and naively expect Windows to "work" because it's the "market" "leader".

      The customers are abviously the MPAA, RIAA and other "content" industry groups (collectively known as the MAFIAA (Media Authoritarian Fanatic Ass-farking of America) to friend and foe alike). Of course, "everyone" knows that all major media content these days is made using Macs or *nix boxen.

      Their customers are happy as the proverbial clams with Vista. Especially since they never have to actually touch it!

    • Re: (Score:3, Interesting)

      Hey, I just got back from China a week ago, and let me tell you, the copy of "Windows Vista Professional" I got for $2.50 was top notch. I mean it actually came with a DVD cover, and probably only fifty or so trojans eager to steal my personal information. (In all seriousness, I did actually buy one as a souvenier...and it was named Vista Professional, which of course isn't actually a real version of Vista, but funny nonetheless. I can't read the Mandarin on it, but on the back it mentions CRACK and readm
    • Re: (Score:3, Funny)

      Sure. This explains Vista. They nailed this guy before the product launch, consequently there are no high quality copies around.
  • by DuncanE (35734) * on Tuesday February 05 2008, @02:37AM (#22303920) Homepage
    Come on... using "High quality" and "Microsoft products" in the same sentence?

    So they were responsible for 9 out the 10 pirate copies of Microsoft Flight simulator then? ;-)
  • by boguslinks (1117203) on Tuesday February 05 2008, @02:38AM (#22303924)
    had been responsible for the 'production and distribution of more than 90 percent of the high-quality counterfeit Microsoft software products

    Why doesn't MSFT sell these "high-quality" products instead of the crap they've been selling us for years.
      • Re: (Score:3, Insightful)

        Ah yes, Hobson's Choice...

        If the theater only has one movie, it's true that you have a choice of watching it or not, but it's not true that you have a choice of movies to watch.

        I think the OP was complaining about the lack of choices for software to buy, not about the ability to choose to refrain from buying computers. Assuming you've decided to give up on the old abacus and join the 21st century, if you walk into most stores, yes, you are forced to buy Microsoft products. You only "choice" here is Hobs

        • I can still buy hardware without being tied to any software, I don't know where you shop...

          While it may seem grim with the lack of software choices at stores, are you aware there's plenty of quality operating systems available for free (legally)? Operating systems such as Ubuntu, OpenBSD, Solaris, just to name a few.
          • Re: (Score:3, Funny)

            by Anonymous Coward
            You don't like dogs much, do you?
  • by timmarhy (659436) on Tuesday February 05 2008, @02:38AM (#22303928)
    Does anyone really believe they have any clue how much of their software gets pirated?

    90% sounds like a nice marketing department developed figure.

    • Methinks that they have no problem with 'poor' people pirating their software on the sly and for free, because it keeps the monopoly alive. It's really unlikely that they're going to willingly kill 90% of that piracy market. ( If everybody who wanted an office suite or OS but couldn't (or refused to) afford MS's prices was 'forced' to go with OpenOffice and/or Linux, MS's death--grip on the market would very quickly be pried open. )
      These guys, on the other hand, seem to have been selling 'legitimate' copies of Microsoft products for real cheap -- That really does cut into Microsoft's market, which is people who are willing to pay for their products in return for either a clean conscience or to keep the MS police at bay.

      Microsoft has no problems killing those pirates.

      • by Skrynesaver (994435) on Tuesday February 05 2008, @04:55AM (#22304634) Homepage
        Perhaps the title is misleading, the linked article claims that this group was responsible for 90% of counterfeit MS products. That's not piracy, it's forgery - individuals downloading and burning copies for their own use is piracy random definition according to my personal dictionary. This however was organised crime (insert "and MS isn't?" joke here) a very different proposition.

        While I loathe and detest MS and their general operating methods, (particularly the whole BSA garbage), they are entirely justified in prosecuting this crew for fraud/forgery etc... though they may get bit by the "boy who cried wolf" syndrome as they, among others, have been claiming that every kid with a torrent client is a threat to the stability of the economic system itself. </rant>

    • by treke (62626) on Tuesday February 05 2008, @02:49AM (#22303992)
      The quote in the summary is more specific. It's the "production and distribution of more than 90 percent of the high-quality counterfeit Microsoft software products either seized by law enforcement or test-purchased around the world."

      So they're only talking about the stuff they've confiscated and not claiming it's 90% of everything that exists.
      • by kripkenstein (913150) on Tuesday February 05 2008, @03:17AM (#22304150) Homepage

        The quote in the summary is more specific. It's the "production and distribution of more than 90 percent of the high-quality counterfeit Microsoft software products either seized by law enforcement or test-purchased around the world."

        So they're only talking about the stuff they've confiscated and not claiming it's 90% of everything that exists.
        That's pretty much it. They're talking about 'high-quality piracy', not casual piracy as in downloading from the Pirate Bay or burning your friend a copy. High quality piracy in this context means that CDs are pressed, covers forged, everything in order for the product to look like it is authentic. It is then sold as if it were in fact authentic (as opposed to casual piracy, where no money trades hands).

        It is very hard to know how much casual piracy there is. However, it is far easier to know how much high-quality piracy exists, because we are talking about actual physical products here, tangible evidence. They are also manufactured somewhere. Then, assuming that law enforcement captures such high-quality piracy in a random sampling manner (that is, all such forged products have the same chance to be caught - a working hypothesis, debatable of course), then this Taiwanese group was the source of 90% of that. So, presumably (by statistical inference) this group is responsible for 90% of high-quality piracy.

        It's a little surprising that a single group is so dominant in this area, actually, I wouldn't have expected it. However, the more interesting question is what will happen now: if suddenly 90% of these forgeries vanish off the market, what will the people buying them do? Will other suppliers fill the gap, or will the buyers turn to casual piracy, or to alternate OSes?
        • Re: (Score:3, Insightful)

          However, the more interesting question is what will happen now: if suddenly 90% of these forgeries vanish off the market, what will the people buying them do? Will other suppliers fill the gap, or will the buyers turn to casual piracy, or to alternate OSes?

          It's not that interesting a question, methinks.

          As these pirated copies were sold off as genuine, I'd guess that most of the users actually believed they were buying legitimate copies.
          Therefore, most of those people will be off buying legitimate copies, directly increasing Microsoft's revenue (as opposed to casual pirates, who indirectly increase Microsoft's revenue by giving them free mindshare).

          People will turn to alternate OSes when two conditions are met:

          1. Equivalent apps become available on the alte
          • Re: (Score:3, Insightful)

            However, the more interesting question is what will happen now: if suddenly 90% of these forgeries vanish off the market, what will the people buying them do? Will other suppliers fill the gap, or will the buyers turn to casual piracy, or to alternate OSes?

            It's not that interesting a question, methinks.

            As these pirated copies were sold off as genuine, I'd guess that most of the users actually believed they were buying legitimate copies. Therefore, most of those people will be off buying legitimate copies

            I'm not sure. If Windows cost them $10 before and now costs the full $150 or so, they won't just run to buy legitimate copies. I'm not saying they'll go off and run Linux - they might look until they find another pirated version, or get someone to help them download and burn one. Perhaps only a small minority might be motivated to seek alternate OSes, that is why I left this at the end of the list of options. But I seriously doubt the majority will just happily start paying full price.

        • by GomezAdams (679726) on Tuesday February 05 2008, @04:02AM (#22304406)
          It won't be long given the pricing structure of Microsoft products that someone will step in to fill the orders for cheap knock offs. High quality or otherwise. I've been in the high tech shopping district in Taiwan and the prices for these pirated items are (usually) far below the price of legitimate copies.

          Also been in Mexico City where street vendors sell about any software title on the planet - some slick copies, some shoddy.

          And I doubt the 90% figure. Looks and smells like some marketing drone pulled it out of his @ss.
        • by houghi (78078) on Tuesday February 05 2008, @04:27AM (#22304498) Homepage
          I for one am glad that they stopped the monopoly position that specific company/person had on that market share.
        • Re: (Score:3, Interesting)

          It's a little surprising that a single group is so dominant in this area, actually, I wouldn't have expected it.

          Well Taiwan accounts e.g. for over 80% of the world's laptop production (at least that's what they claim here [taiwanembassy.org] - table in German only, but should be easy to read). So it would make sense that a lot of the industrial copying of software would be there, too.

          • this is invalid.

            piracy takes money out of the hands of those who deserve it. imagine if your employer, tax office, or ex-wives, were to consider your paycheck casual and freely remove it from you and do whatever it or they pleased, including shoving it where the sun dont shine. i think you would do something, no? or are you a pussy and shrug your puny shoulders, yes? then we are in agreement.
            your argument is invalid

            In the cases you give I am deprived of the product which is "pirated". Copying does not deprive the source of the product. You are making a very very strange comparison between copying and theft.

            Let me put it this way ... if someone can take my paycheck, and leave me with exactly every cent in that paycheck, then they are welcome to it and I invite everyone to do the same.

            not that I've ever encountered pirated software mind you

            • by DECS (891519) on Tuesday February 05 2008, @04:31AM (#22304524) Homepage Journal
              you have trouble seeing the difference between copied bits and the effort required to arrange those bits. The value of software isn't in the commercial packaging or plastic media, it's obviously in the efforts required to create something people will pay for. While you can argue a fallacy of "duplicating doesn't deprive you of the original copy," you're simply ignorantly wrong.

              Copying software doesn't deprive somebody of the version you copied, it deprives the creator/owner of their ability to legitimately sell copies of their work. That's what you are stealing when you copy.

              Your same silly argument could be applied to counterfeiting currency: copying real money doesn't deprive anyone of their legitimate currency. The problem is, it devalues money by depriving the government of its ability to regulate the supply and value of money. That's why the Secret Service exists.

            • Re: (Score:3, Insightful)

              Your argument is aimed at the wrong post here. This is a decent argument when talking about the filesharing type of piracy - people downloading stuff they weren't going to buy anyway. There's no realistic loss from this.

              However, the article and comment are both talking about professional piracy - burning discs and printing manuals and shrinkwrapping in boxes that purport to be the real things. When someone honest goes and buys one of those, $60 that was heading to MS is snatched away. The fact the money
  • In case you wondered as I did... the penalty for being 90% of the pirating...

    "Huang was recently sentenced to four years in jail by a Taiwanese court. Three co-defendants received between 18 months and three years in jail. Six individuals were originally arrested in the case."

    I wonder how rich they are off it.
  • by Anonymous Coward on Tuesday February 05 2008, @02:39AM (#22303936)
    The more interesting story would be, how did they catch him?
  • So now... (Score:3, Funny)

    by Swampash (1131503) on Tuesday February 05 2008, @02:49AM (#22303986)
    Microsoft will lower the price of all its retail products right? Since it's no longer competing with pirated software.
  • OMG (Score:3, Funny)

    by RuBLed (995686) on Tuesday February 05 2008, @02:50AM (#22303996)
    someone's still selling Windows 3.11 for Workgroups...
  • by Library Spoff (582122) on Tuesday February 05 2008, @02:51AM (#22304006) Journal
    Does this mean the cost of microsoft software will come down? We are always being told that piracy on this scale makes software companies push up prices. So when is the cost of vista (especially in the uk) coming down?
  • by Torodung (31985) on Tuesday February 05 2008, @02:56AM (#22304038) Journal
    Considering that most of the pirating Chinese world is using Sharpie scribbled CD-R's to install non-Genuine Windows, I don't think it matters terribly much if they've stopped "90%" of the flow of high-quality counterfeits.

    It's darned good that they caught the bastards, but wake me up when we stop 90% of the actual piracy in Asia.

    This strikes me as a fluff piece for nervous investors.

    --
    Toro
    • by king-manic (409855) on Tuesday February 05 2008, @03:04AM (#22304078)

      Considering that most of the pirating Chinese world is using Sharpie scribbled CD-R's to install non-Genuine Windows, I don't think it matters terribly much if they've stopped "90%" of the flow of high-quality counterfeits.

      It's darned good that they caught the bastards, but wake me up when we stop 90% of the actual piracy in Asia.

      This strikes me as a fluff piece for nervous investors.
      Have you been to china/taiwan/HK/S E asia in general. Some of the fakes are very convincing with packaging and so on. If you go out to a bigger local store you'll see a mix of very good fakes with legit software. They'll even translate it and hack it for use with their own servers. When i was there it was harder to find a legit copy of Warcraft 3 then a pirated one and the pirated ones where packaged decently (if nothing like the real package) and they hooked up the remnants of bnetD Asia. This isn't your geek pirating with black sharpies and spools of random software. This is the real piracy that MS ought to fight.
      • Re: (Score:3, Interesting)

        Some of the fakes are very convincing with packaging and so on. If you go out to a bigger local store you'll see a mix of very good fakes with legit software.

        Just as a matter of interest, do they pirate things like Linux distros? I can see that people might sell convincing fakes of Redhat boxed distros, but I don't know if they'd sell. Perhaps if someone was getting what they thought was a support contract that turned out to be bogus?
        • by thona (556334) on Tuesday February 05 2008, @04:03AM (#22304418) Homepage
          ::It does surprise me that there is significant demand for "real looking" software,

          There is no demand.

          See, it goes like that:
          * Counterfeiter fakes software.
          * Counterfeiter and in between person pose as distributor, selling the windows copies with a SMALL discount.
          * Computer shops, always looking for a small gain (as margins are super slim) take that. Mind you, way talk about omaybe 5% less price, but if your margin is only 5% on the product, that doubles your margin.

          The shop may not know the software is fake (it was a little chaper, but it could just have been a sale), and the end user definitly does not DEMAND fake software. The whole reason it is so high quality is that the purchase chain (shop, end user) do NOT REALIZE it is fake.

          Criminal like hell. Nothing compared to copy some software where both parties know it.
          • by patio11 (857072) on Tuesday February 05 2008, @06:27AM (#22305004)
            >>
            Criminal like hell. Nothing compared to copy some software where both parties know it.
            >>

            This appears to be the Slashdot consensus morality:

            Make a perfectly functional copy, upload it to Pirate Bay, charge for advertising: No problem.
            Make a perfectly functional copy, sell it on a CD-R, charge $1 for it: Very little problem.
            Make a perfectly functional copy, sell it on a CD which looks real, charge $100 for it: Criminal like hell.

            It would appear, on the basis of available evidence, that the Slashdot consensus doesn't give two bits about IP rights as applied to software, but thinks they are really, really important when applied to the distinctive branding on cardboard boxes. I suppose Microsoft should have invested more in Pretty Box Rights Management? It would probably make them more popular around here.
            • by thona (556334) on Tuesday February 05 2008, @07:44AM (#22305342) Homepage
              I personally see it as vastly different. Because it affects the cunwary consumer.

              See, if I ask you to copy me software, and you do, we do something illegal, and we can discuss the moral. But we both KNOW it. It is a fact, I dont pay, we know what we get into.

              In this fact, there is the additional dimension that not only is software illegally copied, but it is done so to swindle an unsuspecting third party for money. It means that while the copy person knows it is fake, the person paying does not know so, and in fact THINKS he purchases it legally. Besides the obvious moral issue it opens that third party to legal claims, because he is comitting a crime by using this illegal copy, albeit not knowing it.

              One case where "I did not know" is a very sad defense.

              And this "betraying another unsuspecting party" does add tremendously. If I steal software, this is between me and the company putting it on the market, and the person allowing me to copy. If I make counterfeit software, I involve a third party that does not want to be in this game.
  • by Thanshin (1188877) on Tuesday February 05 2008, @03:05AM (#22304086)
    Every time I read news about "piracy", the "pirates" are "stealing" 90% of the money!

    Now I wonder:

    A - Is it 90% of the 10% left from the previous "pirate" operation?
    So, after three or four captures, it becomes clear they are actually selling legally less than 1/100 of a single copy.

    B - Are the "pirates" stealing copies from other "pirates" and repitating them?
    So, 10% of the copies would be legally sold and 90% would reach the final clients after being "pirated" about twenty times.
  • by SeaFox (739806) on Tuesday February 05 2008, @03:54AM (#22304354)
    ...must have more 0's and not as many 1's.
  • hmmmm (Score:5, Funny)

    by muszek (882567) on Tuesday February 05 2008, @04:39AM (#22304578) Homepage
    90% of the supply for a gigantic market is gone? Seems like a perfect business opportunity :)
  • Strategic FUD? (Score:3, Insightful)

    by Bones3D_mac (324952) on Tuesday February 05 2008, @05:22AM (#22304738)
    Considering just how adamant Microsoft has been about killing off XP, it makes one wonder if the "high quality" label used here may allow the guy to become a practical scapegoat for Microsoft, should they attempt some underhanded tactic like setting their authentication system to automatically flag all future XP serial numbers it encounters as pirated, regardless of the product's legitimacy. By claiming all currently unsold retail and system builder versions of XP are pirate copies, it wouldn't take much to bury the OS beyond a mass recall of all unsold discs to be used as "evidence".

    Of course, this couldn't ever really happen, but it does make you think...
  • Keys (Score:5, Insightful)

    by PhotoGuy (189467) on Tuesday February 05 2008, @07:04AM (#22305156) Homepage
    There was no mention in the article how these pirates handled keys and activation and such.

    An exact copy of the pretty box and manuals and holograms and stuff is fine, but if it's an exact copy of the CD contents itself, it won't activate properly. Do they use hacked versions of the binaries? You'd think that would stand out (failed updates and such). Anyone know?
    • Re:high-quality (Score:5, Insightful)

      by cp.tar (871488) <cp.tar.bz2@gmail.com> on Tuesday February 05 2008, @03:28AM (#22304220) Journal

      You liars, high-quality. The quality IS THE SAME, don't blame pirates for your quality of development.

      Actually, no, it is not.

      I surmise pirates really do offer better quality, as they conveniently remove the WGA and similar "protection measures", thus ensuring the user's copy of Windows will never ever get blocked by Microsoft. For instance.

      Though I suspect that "high-quality copy" means "CD and packaging virtually indistinguishable from the original retail copy", not "a better product". Nevertheless, sometimes pirate copies are of quite higher quality than the original.

      • Funnily enough, that's sometimes true.

        One of my professors bought a copy of MATLAB to use for solving some filtering equations. (He taught the DSP courses) He installed the program on his laptop, but whenever he wasn't using his internet access, he couldn't use MATLAB correctly. I'm not sure why.

        He finally just installed a pirated version and it worked flawlessly.

        Technically, he wasn't pirating the software either, since he paid for a full licence. They weren't cheap, either. It runs about $25k for a full v
    • by Cougem (734635) on Tuesday February 05 2008, @03:57AM (#22304374)
      How is this insightful? Just asking a question which damns WGA doesn't mean you're worth modding up.

      This is 90% of professional piracy, therefore:
      1) There are other vendors (see the other 10%), who really probably can expand to fill the spaces - ESPECIALLY since if these guys were apprehended so long ago there is a fine vista market ready for targetting. If you've already managed to circumvent the protection then you're only going to be limited by distribution and manufacture, which is hardly that big a hurdle
      2) 90% of HIGH QUALITY piracy, NOT 90% of torrent downloaders and casual pirates. WGA, supposedly, protects against this, which is also a huge problem

      Just getting pissy with copy protection is hardly worthy of mod points.
    • Re: (Score:3, Informative)

      ::It's likely these copies are sold very cheaply to people who can't afford to buy from a real vendor

      No, they were not. We talk of high quality - the vendor bought from a distributor, who got it somewhere cheaper than from MS.

      SOMEONE up the chain made a hugh profit.

      This is the whole crux here - we dont talk about software someone who wants a pirated copy buys. We talk of softwarte that I could buy and sell a customer. Either cheaper (a LITTLE), or for the full price, and not me nor the customer would have t