Michigan Resellers to Pay More Than $1.2 Million To Microsoft for Software Piracy

Software Piracy Cost Michigan More Than $327 Million in Lost Wages and Tax Revenue

DETROIT, May 16, 2000 — Microsoft Corp.'s efforts to stop the widespread distribution of counterfeit software are being realized today as the company announces settlements and judgments totaling over $1.2 million in lawsuits alleging software piracy. These outcomes are a result of legal actions taken against 10 Michigan resellers for the alleged distribution of counterfeit software over the past two years. Microsoft is committed to protecting its consumers and business partners from the harmful effects of counterfeit software. Counterfeit software has an increased potential for carrying malicious viruses and is often found to be missing key software code, and consumers who acquire it are ineligible for valuable technical support, warranty protection and upgrades.

"When resellers engage in the distribution of counterfeit software, not only do they cheat unsuspecting consumers and businesses, but they damage the user's overall confidence in software products," said Duane Tursi, president of Netarx Inc., a Bingham Farms-based information technology consulting firm specializing in corporate network strategy, security and monitoring. "Piracy creates an uneven playing field that undermines the ability of honest resellers to compete. I don't blame consumers for being attracted to 'good deals,' but ultimately it is honest businesses and consumers that suffer when counterfeit software is acquired."

In addition to its other community affairs activities, Microsoft will contribute the net proceeds of its anti-piracy recoveries -- including those announced today in Michigan -- to nonprofit organizations worldwide focused on providing access to technology for disadvantaged communities. One of the company's goals in donating these funds is to help curb the negative impact that software piracy and criminal counterfeiting have on local communities and economies.

The software piracy rate in Michigan of 26.5 percent means that more than one in four software applications in the state are pirated. According to a Business Software Alliance study, in 1999, software piracy cost the state more than 3,580 jobs and over $327 million in combined wages, tax revenues and retail sales of business software applications, demonstrating that software piracy affects not just unfortunate consumers and honest resellers, but every citizen in the state.

"It is important for the software industry and local and state government agencies to work together to help protect honest software distributors, consumers and economies from the negative impact of software piracy," said Janice Block, corporate attorney at Microsoft. "Illegal software is being distributed more widely than ever before, and consumers need to become savvy shoppers to ensure that they are acquiring genuine software."

Some of the warning signs that can help consumers and resellers identify counterfeit or illegal software are listed below:

• Prices that are "too good to be true"
• Suspicious delivery and/or payment methods
• Retail software distributed in jewel cases only, rather than full-color retail boxes
• Software marked with a phrase, such as "For distribution with a new PC only" or "Special CD for licensed customers only," that does not describe the transaction

Customers or resellers with questions about the legitimacy of Microsoft software should contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448) or send
e-mail to piracy@microsoft.com.

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