MS sends notice to six Chennai partners for piracy

Last week Microsoft issued a notice to six channel partners in Chennai for
indulging in software piracy.

Among them were partners like GBS Systems, Magnum Computers, Modern Computers
and Aeon Marketing. The letter that these partners received stated that they
were being fined an amount ranging from Rs 2 lakh to Rs 8 lakh for piracy.

The letters were sent on Sep 14 and the next day all the partners who got the
letter met with Microsoft's legal wing. In the meeting Microsoft asked each of
the partners to pay a penalty of Rs 18,000. They were also asked to sign a
document admitting that they have pirated the software and will not do so
henceforth. The document also included a clause, according to which, if the
partner is caught again, they will be fined Rs 45 lakh as a penalty.

Market sources also insist that besides being charged with the
above-mentioned penalty, the partners were also told by the software vendor that
products worth the fine amount levied on them will be billed on their names.
Sources suggest that the software major had strong proofs against all the
accused partners. Microsoft has been working on gathering proofs for the past
few weeks to ascertain the partner's involvement in piracy activities. The
investigation exercise involved getting quotations for buying laptop/desktop in
which a pirated operating system (OS) was installed. This operation was carried
out across Tamil Nadu.

Microsoft has been conducting random surprise checks on other partners in the
state also to gather proof on those selling pirated software. The partners in
question are expected to receive a notice in the coming weeks.

Partners in Chennai, on the other hand, are quiet agitated over Microsoft's
force-selling attempts and lamented that the pricing of its software is too
high. Few also opined that many partners will not be in a position to pay such a
high price for an OS. Also, though there is no action plan in place as of now,
there are talks about pushing Linux into the market.

Expressing his views, PN Prasad, President, Confed-ITA said, “All the branded
machines should come with pre-loaded OS. The price difference between the
systems with/out OS is just about Rs 2,000, whereas, if it is purchased
separately, it costs nearly Rs 7,000. So, the only solution I see for this
problem is selling systems with a pre-loaded and fully functional OS, which will
bring down the piracy to a very large extent.”

When contacted, Vipul Sant, Director, Original Software Initiative said, “It
has been Microsoft's endeavor to work with the reseller community across India
to create a healthy and safe reseller eco-system where genuine software is
adopted as a correct and safe IT business practice. The three pillars of our
outreach are education, engagement and enforcement. Every year, Microsoft sends
periodic letter mailers and EDMs addressed to channel owners and partners to
educate them about the products, problem of software piracy, informing them
about the risks and dangers of indulging in software piracy, both to them as
well as to their customers. As to the second level, we work closely with
approximately 12-13 channel associations across various regions to collaborate
on intellectual property and piracy awareness programs to their member base. We
also conduct periodic market checks to track the behavior of the reseller
community towards genuine software, all in an effort to alert the resellers and
reduce the instances of piracy. Enforcement is only used as a very last resort
where we see consistent instances of piracy detected at a premises. Even in
those cases, we always engage one-to-one with the identified reseller to
understand the problem, seek an explanation/undertaking and to provide inputs on
why their acts of piracy can lead them into legal and financial risks. Very few
cases are taken to the court, where piracy is blatant, large scale and
intentional. Therefore in all, Microsoft always believes in its education
outreach programs and channel engagement models to drive genuine business
behavior to protect their customers and the honest resellers. By far our
programs have given us a considerable good response and we only hope to do
better.”