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back to article BSA: Software piracy's 'tragic' impact on US society

The Business Software Alliance claimed yesterday that software piracy in the US is costing the industry $11.4bn and local government $1.7bn in lost taxes. The software multinational lobbying group reckoned that although four out of five pieces of software is legally bought in the US the remaining counterfeit material results in …

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Gates Horns

By this reasoning...

...it won't be long before they start arresting people for using Open Source alternatives.

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Whatever...

QUOTE "It claimed those losses translated into enough cash for local government to pay for 100 middle schools or 10,800 affordable housing units. Alternatively, said the BSA, 25,000 police officers could be hired"

Don't make me laugh, if piracy was complete ZERO and all that software was paid for in full, there is NO WAY ON EARTH they would spend it as suggested. Absolutely would NOT happen in a billion years the LIARS.

More like they would use it top up their own pensions and find obscene ways of wasting it without bringing a single piece of good to society.

I want to vomit when I read quotes like that. And no i dont agree with piracy but this is utter trollop and crass over-exaggeration.

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Bob
Jobs Horns

Open Source Software Destroys Civilization

Yes, the tragic loss to society due to the use of open source software is even worse. Think of all that lost Microsoft revenue from all those Apache installations out there. Or, how much better off would Microsoft be if Google had not been allowed to use Linux on their 150,000+ computers?

Sounds like NebuAd's recent claim that they're doing everyone a service by finding a way to make money on the Internet. Would it really be so bad if people don't try to "own" that right? What if the Internet just connects people without making money?

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Unhappy

Ah spending plans

So .. as they reduce the level of piracy down from the 10% it is supposedly at... are they then going to donate the increased profits to create these extra jobs and hospitals/schools ? .. err no ?! ..

so who is the gullible bandwagoning politician who is going to leap on this statement in the hope that some of this "cash" will come their way ? .. if the piracy levels drop of course .. which they wont .. of course .. cos if they did, well what point would there be in having a BSA ? ..

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BSA letters to small/medium businesses...

... demanding that "software audits" be undertaken and the results returned to them, effectively to prove your innocence, just go in the bin (actually, shredder).

Who are these guys? The cream of the licensing compliance droids from Microsoft, with whatever brain cells they had left surgically removed, and wound up and pointed at honest business people trying to make a (legal) living?

With a bit of luck, they will assume that we are using pirated software, but God help them if they turn up here with an Anton Piller order (civil search warrant), which is what it will take if they want to look at all of our (Linux!) boxes... :-)

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Anonymous Coward

Broken Logic

This is bollocks: I certainly don't advocate using unlicensed software, but to use the theft analogy: if a person can't steal a car it doesn't mean he's going to go out and buy one.

This is just an attempt to get taxpayers to foot the bill for enforcing software licensing by convincing government that it's losing revenue through piracy.

Auto-eroticists!

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Coat

Assuming piracy is evenly spread

Doesn't that mean hospitals, schools and the the police are saving 20% on their total software bills?

A massive saving - well done!

We want more of this piracy thing - its great value for the taxpayer!

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Well named!

They really are the BS Alliance...

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I like this reasoning and think we should support it

If we take this to the conclusion the Bull Shit Alliance are leading us to then an honest user should download or borrow whatever software they want to use. To ensure maximum social benefit from the 'licence' cost of the software we should remove the unecessary overhead of the software company and retailers so instead of paying directly for the software, the user pays society by giving the sticker price of the software to the nearest school. Fantastic plan! Bring it on!

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Black Helicopters

Stuff 'Em

I'd have more sympathy with copyright holders if they followed the law and fair business practices themselves but while egregious shrink-wrap software licences and notices falsely claiming that "$MEDIATYPE piracy is stealing" (it's neither piracy or stealing - it's copyright infringement) are the norm they can go whistle for it as far as I am concerned.

First poster may be half right - /They/ will not crack down on opensource and try to justify it by admitting to be protecting the vested interests that grease their palms in the back-alleys of the gubbmint lobbys; that's too controversial and blatent even for the dodgy con-artists running .co.us .co.uk et al.

But /they/ could insist that all software must by law contain DRM implementations that cannot be tampered with or disabled and that use of non-conforming software is illegal.

They could then claim this is to stop 'piracy' funding terrorism and for good measure would likely tack on some sort of parental control functionality so they can claim that anyone who is against it must be a paedophile.

That would stick a spanner in the works of OSS and no mistake.

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If piracy was ZERO - would equate to less products used ?

if piracy was complete ZERO - Would this equate to more products sold or less products used ? I think this would equate to less products used, so smaller business community, and less tax $$$$ fewer schools

Unless the pirates did the decent thing and moved to free Solutions this would maintaining the status quo.

Software piracy's 'tragic' impact is more to do with the waste of money spent by law enforcement and the BSA - pirates go Open Source save our Tax Money.

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Let's not forget

Microsoft costs the US several billion in unpaid taxes on the stupid amount that they claim is not taxable due to being 'petty cash'

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Two rather big problems here:

Firstly, unlicensed != pirated. Pirated means you have purchased an illegal copy off someone. Unlicensed usually just means you've installed more copies of a perfectly legal piece of software than you have licenses for. I'm pretty sure many, if not most, companies have at least some unlicensed software, but I doubt there are very many at all that have pirated software.

Secnodly, "The most tragic aspect is that the lost revenues to tech companies and local governments could be supporting thousands of good jobs and much-needed social services in our communities"

Since when are local governments in the habit of producing and licensing software? They are the users, not the producers. If everyone suddenly decided to properly license all their software, local governements would lose money, not gain it.

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To cover your losses...

...why not put your prices up by 20%, then the taxes on those extra profits can go to the schools, hospitals etc. That way everyone wins (I think...)

Sure, higher prices will encourage a little more piracy, which would mean more price increases and so on, but assuming there is a limit to the number of people prepared to use illegal software, at some point the cost of software will cover the lost profits...

Of course, there might be a tipping point where the fines for illegal software become lower than the cost of buying it.

My brain hurts now...

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Bronze badge

Not 'tragedy'

Let's confine the word to a more appropriate meaning. Tragedy is a drama where the hero's flaws are his undoing, hero being otherwise, well, heroic. The term has now moved to describe an event that seems unjust and deeply sorrowful, eg the accidental death of children, the re-capture of innocent people who have managed to escape a concentration camp, the death of young mothers, the crushing of a budding democratic movement in a totalitarian country, that sort of thing. That money isn't made available is not a tragedy.

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@ Bob

"Would it really be so bad if people don't try to "own" that right? What if the Internet just connects people without making money?"

You dirty commie bastard!

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@William Old

When they turn up to do an 'audit' and are told to disappear no doubt they'll do what they've done with similar situations in the past - turn up with U.S. Marshalls or FBI who will take them away for examination.

With luck, you should get your linux boxes back in a few months.

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Meanwhile.....

http://www.mygen.com.au/article.php?page_id=59624631212927813&se_id=29&format=5

"The “official” patch issued by Ubisoft was in fact the same patch stolen from the illegal cracking group RELOADED."

Game company saves itself money by using a patch from a cracking group to fix problems with its title... Classic. ..

Piracy saves the industry money :P

I know its a one off (that we know of) but my god, I am having a giggle fit at the irony.

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Joke

Support illegal Downloads!

Sound morally wrong, but it's not.

We all know that buying pirated software helps fund drug dealers, people trafickers, terrorists, peados etc to the the tune of billions of dollars each year.

Therefore, by downloading the software, you are denying these people there funding.

As a net result, we will require less goverment spending for pointless wars, over the top security, paid accomodation in Cuba and wastful Police resources.

As a result we can spend more on Schools etc.

Download the dodgy software now and save the world.....

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How could they possibly tell?

The software suppliers keep such poor records of what has been sold, and, there are so many license formats site licences, company licenses, bits of paper with holograms on, e-mails with activiation keys etc. etc.

It would take days to establish if all the softwre on a single PC was licensed correctly even in a large well run company.

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Joke

Crikey chaps

If the US Marshalls or FBI turn up in East Molesey I'll know we are all going to hell in a handcart...

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Alert

Double Charging?

And how much is generated by selling you a second copy of windows when you buy a replacement PC?

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Paris Hilton

Inevitable conclusion

The inevitable conclusion to this is that since pirating or using unlicensed software takes money away from public services -- such as police -- then ultimately such activities serve to destabilize the country and its government, which by current expanded definitions is a terrorist act. Therefore, pirates and people who use improperly licensed software are terrorists. And they probably won't get 70 virgins for their efforts.

Maybe that's why the crime rate in Chicago is off the scale. The BSA should investigate and forcefully instantiate its software licensing Utopia there as a model for the rest of the country. If people didn't pirate software, then there would be no need for a gun ban in D.C..

Paris, terrorizing virgins everywhere.

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Boffin

Certifiable Statistics

This BSA lot obviously studied under Professor Maurice Ronald (goes by his nicknames, mind you) of the famed P.T. Barnum School of Business.

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They send letters to everyone

My DOG got a postcard from Meg A Byte at www.bsadesigner.com urging her to report any illegal software that "her employer" might be running, i.e. ME, and offering her a reward for doing so.

Fortunately for me, the dog couldn't read because she was the biggest Quisling ever.

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Coat

Vista slow adoption...

We all know Vista has had a very slow adoption rate. I propose that is a direct result of the heavy handed license controls MS implemented.

With previous OS releases, the local sysadmin could grab the latest volume license software that came across his/her desk and take it home. Load the warez on a few home machines, break it, hack it, thrash it - you all know the drill. With Vista and its 'everything must be activated' approach, the sysadmin was no longer able to do this.

So what happened?? MS lost their new software advocate. In the past, the sysadmin was a natural advocate of adopting the newest software because they had already explored it on their own time. Self taught saved the company training dollars. And because they already had experience they were a built-in MS product champion.

With Vista, the license controls are so tight that the sysadmin cannot leech a copy for personal use. The sysadmin is no longer a free advocate of the new software. And wow, Vista has a slow adoption rate.

Then again... Maybe I am reading to much into this and Vista really does suck.

Mine's the one with the VLK's hidden in the inside pocket.

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Anonymous Coward

BSA every year same fraud

"In its calculations of the total software deployed during the year, open source software, freeware, and shareware were considered legitimate software and were not considered pirated. In calculating piracy losses, IDC counted this as paid-for software with a price of $0."

Lets do a scenario:

Average load is 5 packages per PC.

Bob has 5 packages, all open source free software.

John has 5 packages from Microsoft, all paid for.

Fred is unknown, but he has a PC.

Based on the known average, you could reasonably assume Fred has 2.5 commercial packages. But that's not what IDC method says.

Microsoft make $100 per package.

Hardware_units * Software_Load = Software_Installed

3 * 5 = 15

Software_Market_revenue / Average_Sale_Value = Units_paid_for

Software_Market_revenue = 100*5 + 0*5

Average_Sale_Value = (100*5+0*5)/10 = 50

UnitsPaidFor = 500/50 = 10

Ergo Pirated copies

= 15 - 10 = 5

Fred is unknown but yet assumed to be using ALL pirated commercial software. Even though he is likely to be using 2.5 packages.

The method is chosen to give a skewed figure. It's much worse than that, the survey is done on people who deal with commercial companies to give it a commercial software bias.

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Gates Halo

There's the answer

...to world hunger, AIDS, premature birth, Tourette's, and halitosis: every government agency on the planet donates to Microsoft's anti-piracy fund. The returns to the world economy will more than pay for the expense, and whatever is left over once the world's problems are solved can be donated to genetic scientists to bring back the unicorn from extinction!

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Unhappy

@Hollerith

So there's someone else out there who mourns the demise of the correct use of 'tragedy'. I thought it was only me.

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How Piracy *Really* Harms Businesses

Piracy hurts the big established players much less than it hurts their smaller competitors. It's not necessarily the people who are having their software pirated who are suffering.

If your business is selling an inexpensive photo editing suite, or an inexpensive office suite, then you are going to lose out to people installing pirate copies of Adobe Photoshop or Microsoft Word. Nobody ever has to make a single pirate copy of your program. They’re not going to, either -- why would a pirate rip off £50 of software when they could rip off £500? And why would any punter pay £50 for a legitimate copy of an office suite which is "compatible" with what businesses use, when they could obtain a pirated copy of the exact same software businesses use for much less than that?

All the big software vendors put up with this because they would still rather you were using a pirate version of their product (and therefore maybe acting as an advertisement to anyone else who might just be honest enough to pay for it) than a legitimate version of a competitor’s product. By turning a blind eye to piracy, the likes of Microsoft, Adobe and Autodesk are effectively ensuring that there is no profit in trying to compete with them on price.

It’s hardly a lost sale for Autodesk if Fred in the Shed is using a knocked-off copy of AutoCad -- he’d never have bought it anyway. (But it is a lost sale of some inexpensive CAD tool -- which, without the option of piracy, he’d probably have caved in and bought.) But if Fred is using Cheap and Easy Designer 2008, gets a job with an engineering firm, and successfully persuades them that C+ED2008 is good enough, that is a lost sale for Autodesk.

I’m no fan of Caged software -- I’d gladly watch the whole industry wither and die. But I want that to be for all the right reasons, and not from cheap below-the-belt shots like this.

If you don’t want to pay £200 for an Operating System, then get Ubuntu. If you don’t want to pay £500 for an office suite, then get OpenOffice.org (of course, if you got Ubuntu, you already have it). If you don’t want to pay £500 for a graphics editor, then get the Gimp.

There is no reason to use pirated software.

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Pirate

That's the beauty of FLOSS

The Business Software Alliance should look into how much FLOSS solutions can save businesses, but, since they are a proprietary software industy organization, they likely won't do that. http://www.gartnerwebdev.com/2007/05/12/bigger-faster-cheaper-open-source-in-the-small-business/

It's nice to have all of the software that I need and love without having to feel like I'm stealing.

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Unhappy

Outright Deceit

Hard to have any respect at all for the BSA when they make claims that they know are deceitful.

Just like the fiasco with the RIAA vs The People, all the BSA has done is cause us to avoid any members' software whenever possible. Most of it is crap these days anyway, so encumbered by DRM that it has new additional bugs even worse than the application code did. Take Acrobat for instance, now a steaming pile of poo having taken a downturn instead of improving in subsequent releases after roughly v5.

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Black Helicopters

@Alan W. Rateliff, II

Actually I blame the insane crime rate on the high cost of living in Chicago, highest tax rates in america, the lack of decent paying jobs, and highly corrupt Democrats in charge.

Now on the other hand it was kinda funny when they pretty much raided where I went to college and worked originally and slapped so many fines for our 300+ uses of windows 98 and office and we owned 1 license total (the machines had windows 95 licenses still). We got a new IT director the next week.

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Happy

They have it completely wrong

Here's a scenario, Company A makes a software pakage which Company B uses. The software sells for £200 but Company A's overheads are say £40 per copy. Company B uses 40 copies of the software.

If Company B buys 40 licences, Company A makes £6400 profit on whih they pay say 25% corporation, so £1600 goes to the government.

If Company B uses 20 copies but doesn't pay for the licenses, they save themselves £8000, which goes to their bottom line as increased profit. They pay the same 25% corporation tax on their profits, £2000 goes to the government.

Therefore the government is better off if Company B doesn't pay for the software.

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riiiiight

Im sure all of those non-payers would go and buy photoshop or whatever right away if they had to pay for it. O_o .

And thats what they are counting as "losses"

most would not use it at all, use an old licensed version and never upgrade, or would use the open source alternative which would probably get better with more users.

photoshop (or whatever) would sell less as those kids get older, go to work and tell the boss "don't bother buying that, i can use this open source one instead".

some software companies, such as cockos(reaper) have a very reasonable license for a completely non-crippled private use copy, and charge more for people who make money from it.

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Why

I've always wounder why companys let the BSA through their doors.

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Coat

The real thieves ?

Large companies avoiding tax ?

Oh, we might have a clue here: http://www.fool.com/portfolios/rulemaker/2000/rulemaker000217.htm

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Coat

Beyond Parody

This statement is beyond parody. Do you think this was a Friday afternoon joke that was floating around BSA, and got released for publication by mistake?

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Not to repeat the obvious,

This is a total crock.

Saying one sector would be better off, and thus pay more taxes is simply reportioning a pie. It's still the same pie, but now with crumbs on the floor. There's less pie for everyone. It wouldn't result in higher overall tax revenues.

This ignores subsequent value adds, which get taxed. This is where commercial activities create value further down the supply chain.

It ignores dead-weight losses to the economy such a regulation regime would add above and beyond the existing losses caused by infringement (There is a cost to society for some types of infringement). Net loss to society btw.

Ignores that the economy is not grown by a regulated or tax fix. Taxes only increase without a rate jump through economic real growth. This doesn't occur by restricting access to technology, or through monopoly pricing.

Ignores the cost to society of a monopoly. This is thoretically cancelled by the gains in innovation (not likely if patent and copyright terms keep getting extended)

Effectively the biggest hole here is to say "You'd get 1.7bn more in taxes!!!" The gov't already gets those monies in taxes from other sources. (eg the money saved from paying for software goes to other things (buying materials or profits), and generates taxes from that, unless everything had a value of 0). The only way they'd get that is through passing the taxes on to foreigner consumers, which could only happen through trade deals (which is being tried). Domestically it is a net loser, not winner.

Funny thing is, this will probably get all kinds of traction with politicians.

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Stop

A pitiful logical fallacy

The BSA's argument makes the insultingly stupid assumption that money not spent on taxable software is either buried and forgotten about or spent on some sort of magical non taxable products instead.

In actuality, the BSA's continual squeaky wheel routine regarding piracy diverts Police time and therefore tax payer money away from solving crimes involving finite product theft and actual harm to individuals, property etc.

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Joke

@this

Yes, tragic, isn't it?

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Alien

There is no tax loss

So the software company sells less software, therefore it and the supply chain make less profit and pay less tax.

The company with the unlicensed software makes more profit and therefore pays more tax.

Net result - no difference in total tax paid.

(OK, this is not quite right as it doesn't allow for different tax rates in different countries, but the overall effect should be around zero - give or take)

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One rule for them, one rule for us

Tell me how many kids play areas have run out of funding because Mr Company Director is only paying 5% tax thanks to all his tax loop-holes and dodges?

No, that's not enough. Tell me how many Amercian kids are being made homeless today because the US government thinks that only normal 'citizens' need regulation? Free market capitalists are all very keen to point out their losses when WE cheat the system. Where's the payback? When do we get to take out our frustration on the cheats and idiots who have screwed up the global economy?

We're on the verge of what could be the worst global financial collapse in three quaters of a century - caused entirely by the behaviour of those at the top of the economy - and all we get is complaint after complaint from the big businesses about how we're cheating them out of money.

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xjy
Paris Hilton

Jesus...

The real crime is M$'s compulsory monopolistic bundling of its OS with (as good as) all the new machines being sold. If the hardware sellers can bundle all sorts of demo crap, they can also bundle Windoze as demo crap, maybe along with Linux. Then we'd see how many punters ponied up for the M$ crap after the 5 days trial period. This would suddenly find Photoshop etc plummeting down the sales abyss with the other expensive crap. And gigantic growth in demand (equals development resources) for Open Source equivalents or improvements.

Anyhow it shouldn't take too long now for the Chinese and Indians to rev up their various Linuxes so they make inroads into the informal use of software that's proprietary in the West but open to genuine competition and ingenuity in the East and so selling at near its real market value. Actually above, cos the real market value of something infinitely reproducible is bugger all.

All this software and knowledge copyrighting is merely a legal cover for monopoly and the exclusion of most of humanity from developments in science, technology, medicine and culture. Bastards.

(And people wonder where the Nazis dug up all their concentration camp guards and torturers and murderers! Any of our security or legal jobsworths would do the same without turning a hair if they were told to. Befehl ist Befehl!)

(Paris cos she wouldn't dream of doing what anyone else told her to ;-)

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Anonymous Coward

@Hollerith & this

"So there's someone else out there who mourns the demise of the correct use of 'tragedy'. I thought it was only me".

No its not just you, you can also add hero, disaster, and *weapons of mass destruction to the list,

* Wen applied to chemical/biological weapons, thse are (normally not very effective) mass casualty weapons

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Paris Hilton

Where piracy does hurt

AJ Stiles mentioned how piracy doesn't really hurt the big companies. There's truth there. As I've mentioned before, I am a reseller for a software package. I've talked to several of my own colleagues about selling it to them at a discount, and a few of them have looked me right in the face and, without a flinch or second thought, said thank you but they'll just find a cracked key or use the free version outside of its licensed usage.

One of them had the balls to get upset with me for not picking up a lunch tab.

Paris, because she'd probably fuck you and want you to pay, too.

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Pirate

Pixie dust

O.K. I'm sick of this crap, "OHHhh we're losing BILLIONS to software piracy feel sorry for us" BULLSHIT!

Pulling numbers out of your ASS, doesn't make It fact I don't care how much fairy dust you sprinkle on It. theres just no way to put a real number to this kind a thing.

If makes you feel better, feel sorry for the poor knob pirate In Hong Kong who still has a hundred thousand copies of Windows Vista he couldn't give away as free drink coasters on e-bay

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Paris Hilton

Cost of war ?

Instead can anyone honesly compute how many dollars have been spent on war in Iraq (600 Billion so far minimum)? Any idea how many innocents killed ? (150,000 a fair estimate?).

This amount can build a 100 more hospitals and 100,000 more schools and a million more homes all over the needy world, including in Iraq and Afghanistan.

American hypocrisy ? You bet, at its best.

Even PH can't comprehend the sheer hypocricy of such idiotic arguments. Can smell RIAA, MPAA all over again.

Batsrads all.

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I confess

Today I walked to the shops instead of taking the bus - costing the company the price of my ticket. I had a shower instead of a bath, and cost my utility company (at present rates) a small fortune. I let the cat out of the house instead of watching the advertisements when I saw the news last night, thus robbing the advertiser of his paid spot.

I use open office, the gimp and gmail, thus depriving revenue from the software companies that sweated to produce more expensive products. Now I realize that all my activities have actually been depriving my community of the policemen, schools and hospitals that would have done so much to make the world a better place.

Come to that, why am I reading el Reg at all? Can someone recommend an inferior IT online journal that I can pay lots of money to read? For the kids' sake?

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in my country

in my country, buying a copy of windows costs a months wages. So if everyone in my country got rid of their pirated software and brought originals, would we all live in a better society? or would we all go broke and die of hunger?

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