Going, going, gone . . . Software in nine out of 10 auctions on the Net found to be counterfeit

A damning probe of some 1300 online auction sites has revealed major auction houses such as eBay and Yahoo are among a string of players caught up in illegitimate software sales.

And while Internet auctions may be the latest rave, IT professionals are being warned not to fall prey to the hotbed of illegal sales, of which the report concludes an alarming nine out of 10 are counterfeit.

The report, issued by the Software & Information Industry Association (SIIA), found that a shocking 91 per cent of auction software was pirated and of the 1300 sites only 138 contained legitimate software licences. Online powerhouse Amazon.com was among the Web sites which weren't found with illegitimate e-sales.

Meawhile the Business Software Association of Australia has likewise found up to 70 per cent incidence of illegal software on auction sites, according to chairman Jim Macnamara. With dire consequences for users of illegal software and companies that don't address the use of such software within their networks (see Software piracy: what's the cost), Macnamara urges caution when buying from online auction sites.

"IT managers should treat software purchases from online auction sites the same as they would in the physical world," Macnamara said.

To help IT managers avoid unintentionally purchasing illegal wares, Macnamara suggests:

* Ensure the product is physical, don't simply download software;* Request original CDs, manuals, disks and documentation;* Request printed licensing agreement;* If price comparison with recommended retail prices is too good to be true, it usually is;* Where downloads are unavoidable, make sure you are familiar with the host site.

SIIA also suggests IT managers take precautions when buying software from an online auction.

For example, users should look for signs the software isn't for purchase, such as having the terms ‘not for resale', ‘backup' or ‘OEM' emblazoned on the packaging.

BSAA will start monitoring the host sites themselves, Macnamara said. The association is trying to encourage better record keeping of sellers on online auction sites, he said.

"We are not opposed to online auction sites, but we believe the major online auction sites should recognise there is a serious problem [with pirated software]," Macnamara said.

"It is not realistic to ask auction sites to be policemen, but we are trying to encourage better record keeping of vendors," he said.

Yahoo declined to comment on the SIIA report because the company is facing a lawsuit from the top three video game makers regarding pirated games sold on its site.

Two weeks ago, video game manufacturers Electronic Arts, Nintendo and Sega Enterprises joined together in a lawsuit against Yahoo. The companies claim that Yahoo failed to remove illegal auctions from its site after being notified to do so. The companies are seeking an injunction against the Web company.

SIIA's Burek says Yahoo needs to be more vigilant about enforcing its usage terms and reducing counterfeit software sales on its site.

"Yahoo, unfortunately, has the most blatantly pirated auctions, in terms of transferring unauthorised software," Burek says. "Yahoo does not have the systems in place to effectively deal with this."

Anna Featherstone, a spokesperson for Yahoo Australia told Computerworld "it's not an issue we have faced yet in Australia".

Featherstone said the onus is currently on users to self-monitor, and under Yahoo's Terms of Services "users are not allowed to sell anything illegal".

To date, Yahoo Australia has not received any complaints from the local software vendor community about pirated software, but "we would work closely with the software companies to work out a way to police [pirated software] should it become a problem", Featherstone said.

As for Macnamara's suggestion that users of online auction sites are monitored and recorded, Featherstone countered: "This has huge privacy implications."

Lee Copeland contributed to this story

Software piracy: what's the cost?

Natasha David

The largest problem of software piracy is still confined to corporate Australia, according to Jim Macnamara, chairman of Business Software Association Australia (BSAA).

"We have found enterprises are using software beyond licensing agreements," he said.

IT managers who infringe licensing agreements can be fined $500 for each unauthorised copy, to a maximum of $60,500 and a maximum of five years imprisonment, under Australia's Copyright Act. Companies can face fines of $3500 for each unauthorised copy made or distributed of software covered by copyright, up to a maximum of $302,500.

Under civil legal action by copyright owners, users of illegal software can face damages of an unlimited amount and court costs.

"Many businesses feel that they won't get caught for using illegal software," Macnamara said. "No matter what business you are in and where you are located, you need to comply with copyright and, if you don't you risk severe penalties," Macnamara said.

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