Online auction sites pose one of the biggest impediments to combating software piracy, with a recent survey indicating up to 70 per cent of online software sales could involve illegal software.
The Australian channel loses more than $286 million a year in sales revenue, according to the Business Software Association of Australia (BSAA), which surveyed around 200 computer resellers and retailers across the country.
"It is not only software manufacturers who are losing out," said BSAA chairman Jim Macnamara.
According to a recent global survey by US analyst International Planning and Research, Australia's piracy rate fell from 33 to 32 per cent over the last 12 months.
"We have significantly reduced piracy in large businesses and Government departments, however the overall figure has not changed [much] because the home user and SME market is increasing," Macnamara said.
He added that with increasing Internet use, due to the development of cable modems and wider bandwidth, and the trend towards online retailing, Australia needs to back up its legislation with policy and regulation.
In addition, there are still a number of backyard dealers who load the hard disk without purchasing the software, but online auction sites also pose a problem, he said.
Macnamara cited US results which showed that out of 300 applications bought from online sites, 70 per cent were found to be illegal copies of software, he said.
"That is frightening because the consumer is generally not able to differentiate between pirated and legitimate software.
"We have spoken to the major sites here and they are understandably concerned. While they are not accountable for what is sold on their sites, we are working with them to find ways of self-regulating the industry. If piracy runs out of control, we all lose because consumers lose confidence in the channel."
The Australian industry has lost $1.4 billion in retail software revenue over the last five years due to piracy.
"Australia has done lots of work on Internet security, but consumers have got to have the security of knowing that what they are buying is the real thing," Macnamara said.
"Australia's piracy rate for PC business software is around 6 per cent higher than the US. There are other countries which have higher rates but we ourselves consider to be at the same level of understanding about licensing as North America.
The BSAA is calling for the Federal Government to allocate more resources to the Federal Police and to implement statutory damages.
"In Australia, the absence of statutory damages means that you only pay for the value of the software which has been proven stolen.
"It is effectively a time payment system for software. The industry is doing the work to help ourselves, but we do need backing from the Government."