Sting! The biggest software counterfeiting bust in history

[This is a post originally penned by Alex Kochis over on the WGA blog.] 

Earlier today the Chinese Public Security Bureau and the FBI announced the largest bust of counterfeit software manufacturing or distribution ever.  The bust took place in the southern Chinese province of Guangdong and includes arrests that took place over the last couple of weeks.  While the value of the software actually seized is estimated at about five hundred million dollars, we're estimating that the value of software produced and distributed over the last few years by this particular group is closer to two billion dollars.

Beyond the sheer size of the bust, the most exciting aspect for MS' WGA (Windows Genuine Advantage) team is knowing that WGA played a role in it.  More than 1,000 customers in 12 different countries who had purchased counterfeits from this particular source used WGA to learn their software was counterfeit, submitted the counterfeits to Microsoft, and forensic and intelligence specialists then traced the counterfeits back to the criminal syndicate in China.  Windows customers using WGA actually helped bring down the biggest software counterfeiting operation in history, as without their help, it's possible that this piracy operation would never have been apprehended.

The goal of WGA goal is not to punish the people who purchased these programs -- they are in fact victims -- but rather to give them a tool that both lets them know they have been victimized and a way to do something about it.

A little cloak-and-dagger for your afternoon :).  The one on the left is the genuine article.

WGA bust


Comments

  1. Posted on: July 25, 2007 at 1:51PM  

    Hey Good_Bytes:  you should check out the How To Tell site for more information on how to spot fakes (granted, some are very difficult to discern, and a photo is rarely good enough to tell the difference in those cases):  http://www.microsoft.com/resources/howtotell/.

  2. Posted on: July 25, 2007 at 11:24PM  

    Wow, the counterfeiters are really pushing the limits. Its gone far beyond holograms now.

  3. Posted on: July 25, 2007 at 11:56PM  

    Thanks for the info evildictaitor, good to know.

  4. Posted on: July 27, 2007 at 3:28PM  

    Thanks Nick!

  5. Posted on: July 29, 2007 at 12:30PM  

    find some useful information at http://more-vista.blogspot.com

  6. Posted on: August 27, 2007 at 4:37PM  

    Well, I certainly appreciate any attempt to protect the consumer from being ripped off, since  as a consumer, I often feel at a disadvantage in the marketplace where my reasonable expectation of product performance is routinely violated, even by products from supposedly reputable and competent manufacturers, from General Motors to Microsoft itself.

    Even so, I would like to take this opportunity point out to you that in some ways Microsoft's business model (whether you know it, or admit it, or not) is dependent on the continued proliferation of cheap or free versions of MS' software. Below, I will explain why I think this is so.

    I own the MS software that I use because, and in as far as, I can afford to do so since there are moderate advantages to using legitimate copies. However, many people could not afford to own MS software if they had to buy all of it, and since it is easy to obtain pirated copies of MS products for free, it is common practice to do so. (I am talking about, for instance, people in the developing world, students and first adopters who generally try out and create a culture for way more software than they could possibly afford to buy.)

    Meanwhile, collectively, the users of your products, the software, web services and proprietary data formats themselves, are often collectively referred to as an “ecosystem". The interdependence of this ecosystem assures the "lock-in" of consumers to products such as MS Office Suit and its proprietary formats as the price of participation in the wider economy and culture. But a large part of the installed MS software products within said ecosystem is prated software. Actually, while I have not done a formal survey, I would estimate that 50% or more of the total install base for your software, is pirated. Thus, the value of your paid for software is in part dependent on the interoperability it assures with the pirate install base. Were it not possible to pirate your software and thereby to obtain it for free, there would be strong motivation to switch to competing platforms.

    Linux and Open Office will not overtake their MS counterparts, because while the former may be "Free" in the larger sense of the term, the latter is free in the only meaningful sense of the term for the vast majority of users who are not programmers and simply want software that will enable them to participate in the larger socio-economic ecosystem.

    In contrast, most of the Mac users I know actually own most of the software they use, or at least they seem to own more of the software they use than do their PC user counterparts. (Though I also acknowledge that I am less confident in this assessment of Mac users than my assessment of PC users since I know comparatively fewer Mac users than PC users well enough to speak with equal certainty of the two groups.)

    While I do not expect that anyone at your company will ever to admit it publicly, I think you know that what I am saying is generally true (fore if you do not, I think your shareholders should be worried), and I am not accusing MS of being hypocritical so much as I am calling on you to be more transparent about the contradiction arising from (a) your need to be paid for your software, and (b) your simultaneous dependence on the free distribution of your software via widespread piracy (whether for profit and/or not-for-profit). I ask this in the hope that by bringing this contradiction into the open, some  more reasonable legal framework might be found with which to satisfy these two competing imperitives. Is it really in your interest to criminalize what is probably the majority of the very user base you depend on?

    This hypocritical prohibition against what is called piracy is in fact giving rise to ever more sophisticated forms of organized piracy, similar to how prohibition against alcohol and Marijuana actually create organized crime by creating black market unregulated economies that on the one hand feed legitimate human desires and needs, while on the other hand generating capital that is then used to feed more malevolent socio-economic phenomena.

    Also, I would suspect that if ever MS Windows/Vista is dethroned as the #1 OS and software ecosystem, it will be by largely means of exploiting contradictions prizing from your hypocritical dependence on the piracy you claim to abhor. However, I admit that this last bit is highly speculative on my part.

    Yours truly,

    betamod

  7. Posted on: August 28, 2007 at 2:16PM  

    Correction to last paragraph in the above post: Also, I would suspect that if ever MS Windows/Vista is dethroned as the #1 OS and software ecosystem, it will be by largely means of exploiting contradictions arising from your hypocritical dependence on the piracy you claim to abhor.

    To clarify further,  my point is that this contradiction is not only a corrupting force within the ecosystem, which costs everyone in the community, but also an opening that represents both a grave risk and a great opportunity for MS’s future and that of its competitors. For instance, what is going to lock people into MS’s ecosystem as office-like functionality and soon even games become more available through web based services? In this light, is the recent release of Safari for Windows the thin end of a wedge?

    From my standpoint as a customer, I would like to feel that the value of my software does not stem merely from the fact that I will be able to participate in the ecosystem since that makes me feel trapped (i.e. locked in) and thus resentful of Microsoft. Rather, I would like to feel as if the greatest value in the software that I purchase from your company resides in genuine innovation both in functionality and UI design that continually improves my user experience. But unfortunately, I can’t say this. For instance, I eventually stopped using Word Perfect and Netscape in 2k, not because Word and IE were better but simply because these were more compatible with the ecosystem. I do therefore carry some resentment towards your company for that reason, and I would suspect that this is why you guys have that evil empire stigma in the popular culture. People like me often feel like we are getting a raw deal, and we want a way out, whether that way is to migrate to the Mac or Linux platforms. Perhaps it is not fair to blame you for outperforming your competition but the devil is in the details of “how” you are perceived to have done so. If people feel like they are being forced to use a product that is worse than the one they previously used then they will be less inclined to pay for it, whether that means finding an alternative or piracy.

  8. Posted on: November 03, 2008 at 5:25AM  

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