Microsoft Files Software Piracy Actions Against Five Pennsylvania Resellers

Pennsylvania Ranks Eighth in the Nation in Combined Wage, Salary and Tax Revenue Losses Due to Software Piracy

HARRISBURG, Pa. - Sept. 21, 1999 - Microsoft Corp. today announced that the company has filed lawsuits against five resellers in Pennsylvania as part of its ongoing efforts to protect consumers and legitimate resellers and to lessen the negative effects of software piracy on Pennsylvania's economy. The five resellers allegedly distributed counterfeit software and/or installed unlicensed software on computers.

Prevalent across the country, software piracy has a significant impact on state and local economies. According to a recent study by International Planning & Research Corp., in 1998 Pennsylvania lost over $244 million in combined wage, salary and tax revenue due to software piracy. The state lost more than 6,000 jobs due to the severe impact of the distribution of illegitimate software, as well as more than $32 million in tax revenue - money that otherwise could have contributed to local and state improvement projects.

"The impact of software piracy is threatening the welfare of legitimate businesses. It's nearly impossible to compete with the 'too good to be true' prices some software distributors are advertising these days," said Kendell Stellfox, sales representative at Threshold Technologies. "We appreciate the steps Microsoft is taking to level the playing field."

Most investigations are initiated by tips called in to the Microsoft anti-piracy hot line by customers or other resellers who have obtained suspicious software. Microsoft customarily notifies a company that it is suspected of acting illegally and asks the company to stop the illegal activity. Microsoft then determines whether the suspect company has continued its illegal activity before filing a lawsuit. The complaints, which were filed in the U.S. District Court for the Western, Eastern and Middle Districts of Pennsylvania, allege hard disk loading and/or the distribution of counterfeit software and/or components to investigators and/or customers, as follows:

• Astro Software and Computer Center allegedly distributed counterfeit components of Office 97 Professional Edition and counterfeit Microsoft® Windows® 98 (Case No. 99-cv-4672).
• Computer Plus Connection allegedly hard disk loaded Windows 98 and Office 97 Professional (Case No. 99-cv-1675).
• Computer Revolution allegedly distributed counterfeit Windows 95 and Windows 98 (Case No. 99-cv-1507).
• HillCom Technologies Inc. allegedly hard disk loaded and distributed counterfeit components of Office 97 Professional (Case No. 99-cv-1674).
• PCS Computers Inc. allegedly distributed counterfeit Windows 98 and counterfeit components of Office 97 Professional (Case No. 99-cv-1677).

"Software piracy has a severe negative impact on our nation and most definitely here in the Keystone State. In order to protect consumers, the honest channel and the economy, Microsoft will continue to take action against companies that repeatedly place their customers at risk by distributing illegal software," said Nick Psyhogeos, Microsoft corporate attorney. "We are dedicated to breaking the pattern of piracy and appreciate the support and assistance of honest resellers and consumers."

Microsoft has announced that, in addition to its other community affairs activities, it expects to donate an estimated $25 million over the next five years - half of its anticipated software piracy recoveries during that time period. Funds will be donated to a variety of nonprofit organizations focused on providing access to technology for disadvantaged communities. In 1998, software piracy cost the U.S. economy nearly $1 billion in taxes and 109,000 jobs.

Consumers and resellers are encouraged to become familiar with the warning signs that can help them identify counterfeit or illegal software:

• Prices that are "too good to be true"
• Software marked with a phrase, such as "For distribution with a new PC only," "Special CD for licensed customers only," "Not for retail or OEM distribution" or "Academic price - not for use in a commercial environment," that does not describe the transaction
• Microsoft OEM Windows 98 or OEM Office 2000 that is not accompanied by a user manual that incorporates a Certificate of Authenticity as the cover, as well as backup media and an end-user license agreement that is visible on screen when the programs are first run

Customers or resellers in Pennsylvania can visit http://www.microsoft.com/greaterpa/protect/ to assess potential exposure to software piracy and learn about steps that can be taken to protect against the distribution of illegitimate software.

Customers or resellers with questions about the legitimacy of Microsoft software should also contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448) or send e-mail to piracy@microsoft.com. In addition, a list of authorized distributors and details regarding the OEM System Builder program are available at http://www.microsoft.com/oem/. Consumers can obtain more information about software piracy by calling the Business Software Alliance anti-piracy hot line at (888) NO-PIRACY (667-4722) or sending e-mail to software@bsa.org.

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