Scott & Scott, LLP Responds to BSA Report that 41% of all Software is Pirated; $53 Billion Revenue Loss

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Business Software Alliance claim 41% software piracy causes software publishers $53 billion revenue loss. Dallas-based business and technology law firm, Scott & Scott, LLP , responds to BSA report.

the Business Software Alliance’s (BSA) latest report, 'Software Piracy on the Internet: A Threat to Your Security,' is another example of their report exaggerations.

Software audit defense attorney, Robert J. Scott, Managing Partner, of Scott & Scott, LLP, a Dallas business and technology law firm, says that “the Business Software Alliance’s (BSA) latest report, 'Software Piracy on the Internet: A Threat to Your Security,' is another example of their report exaggerations.” Earlier this year, Scott & Scott, LLP responded to the exaggerations in BSA-IDC’s ''Sixth Annual Global Software Piracy Study.''

The Business Software Alliance (BSA), a trade association of software publishers, ranging from Adobe to Quark, claim that roughly 41% of all software is pirated, costing the industry $53 billion in revenue losses. The organization’s claim that those funds could have been invested in new jobs and next-generation solutions because for every $1 of PC software sold, another $3 to $4 is lost by local information technology service, support and distribution firms. Scott could not find documented proof for their numbers.

The BSA reports that it has issued 2.4 million takedown notices to peer-to-peer networks the first half of 2009, which represents a 200 percent increase from the same period last year. The latest report says that in addition to harming the economy, software pirates use P2P networks to distribute illegal and dangerous software.

The organization’s dollar loss figure is based on an assumption that 100% of pirated software represents a direct loss of revenue to the software firms. There is no evidence that ALL pirated software would be replaced by a purchase of the legitimate version at full retail.

Scott says: “The BSA report contains no analysis regarding the effect of unlicensed software on IT services. It seems to me that a high percentage of currently unlicensed software would not be replaced at market price, and fewer, not more, jobs would be created."

In addition, Scott points out there is another side to the software piracy issue: the side that looks at the interests of millions of honest businesses that routinely purchase legitimate software for the majority of the products that are installed on their networks. Many of these companies, especially in light of the current economic crisis, do not have the financial and human resources to interpret software license agreements and establish very costly compliance initiatives, largely because of the unnecessary complexities of the license agreements created by the software industry.

Scott & Scott believes that the Business Software Alliance should do more to lessen the compliance burden on American businesses, as they seek to adhere to complex license agreements and the challenging asset reconciliation process. In doing so, companies will have the resources necessary to invest in revenue generating initiatives, as well as foster innovation that drives their businesses – and the economy.

About us: Scott & Scott, LLP ( and is a leading law and technology services firm dedicated to helping senior executives assess and reduce the legal, financial, and regulatory risks associated with software compliance. Scott & Scott’s legal and technology professionals provide software audit defense and software compliance solutions, all protected by attorney-client and work product privileges.


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