U.S. Companies Fight Chinese Piracy

Stephen Yagielowicz
LOS ANGELES — In an attempt to combat the widespread theft of its market-leading Windows operating system, Microsoft has entered into an agreement with Beijing-based PC maker Founder Technology Group, to have Windows and other system software pre-installed on the manufacturer’s computers.

Founder also will market Microsoft keyboards, webcams and other products in its 500 retail outlets.

The problem of global piracy is growing, particularly in China — and it’s not just adult entertainment companies that are feeling the pinch or coming up with innovative solutions.

According to the Business Software Alliance, China is a center of piracy; 82 percent of the software used there is unlicensed, compared to an Asian average of 55 percent.

The problem is increasing despite enforcement attempts by Chinese officials who are displeased with China’s standing as the world’s leading source of illegal software, music, and other copyrighted intellectual property and products.

"Our partnership with Founder is an essential part of our strategy here in China and around the world," Microsoft CEO Steve Ballmer said.

Previously, Microsoft had secured an agreement with the Lenovo Group, China’s leading PC maker, to install Windows Live, its tool bar and search software on new computers.

Other companies taking a stand against Chinese piracy include rival media powerhouses Paramount Pictures and Warner Bros., which have just entered into a deal that would allow Paramount to sell DVDs at deeply discounted prices through Warner’s 20,000 outlets in 50 cities across China.

These titles, from Warner, Paramount and Dreamworks, will be offered for the equivalent of $3, be available two months after their theatrical release in the U.S., and will feature the earliest release dates and lowest prices offered anywhere in the world, as an incentive for consumers to avoid illegally copied material.

"It's our way of fighting piracy," said Tony Vaughan, managing director of CAV Warner Home Entertainment Co.

According to the Motion Picture Association, more than 90 percent of the DVDs available in China are illegal copies, readily bought for around 68 cents and obtainable within a week of the title’s release in America.

As an indicator of the scope of piracy today, a recent report by the Organization for Economic Co-Operation and Development estimates that the value of illegally copied products is in the hundreds of billions of dollars and exceeds the GDP of more than 150 of the world’s economies.