BSA reacts to further Bribery Act claims

Anti-piracy body explains why so many of its cases are settled out of court, as Bribery Act queries mount

The Business Software Alliance (BSA) has been urged to rethink its policy of financially rewarding whistleblowers, following claims the practice could constitute a breach of the Bribery Act.

The anti-piracy body offers rewards of up to £10,000 for information that leads to the discovery of pirated software or licence misuse.

The organisation counts Microsoft and Adobe as members, and was forced to deny claims made earlier this week that its whistleblowing rewards scheme breaches the Bribery Act legislation.

In a statement to ChannelWeb on Monday, Julian Swan, the BSA's director of compliance marketing for EMEA, said: "We do not pay rewards unless software piracy or infringement is found, and rewards are only ever paid when a case is successfully concluded.

"We vet all our leads before sending any legal letters regarding illegal software use, because our programmes are designed to elicit and reward reports of illegal conduct only, and not false reports filed with malicious intent. We are confident there is no breach of the legislation," it concluded.

The Bribery Act allegations were made by a source who agreed to speak to ChannelWeb under the condition of anonymity.

The source has reported his misgivings about the BSA's actions to the Metropolitan Police, the Serious Fraud Office (SFO) and the Federation of Small Business (FSB).

An FSB spokesperson indicated to ChannelWeb that it had responded to the complaint's author, and that the SFO and Metropolitan Police will be doing so "shortly".

Speaking to ChannelWeb, the source explained the motive for reporting the matter to the authorities.

"The BSA's defence earlier this week was that, because it is uncovering illegal acts, the Bribery Act does not apply to them," the source explained.

"If that is the case, they should be able to point to the large number of criminal convictions its activities have led to, but every case that is reported in the press seems to be settled out of court with a massive financial settlement," he explained.

The source claims this suggests the BSA's activities are commercially motivated, and carried out to "secure large financial settlements from companies". This, it is claimed, would be a breach of the Bribery Act.

In response to these allegations, Swan insisted – in a further statement to ChannelWeb today – that the BSA does take cases to court, but not on a routine basis.

"The civil justice system in the UK is predicated on discouraging lengthy litigation processes, so that settlements of disputes outside court are preferable, wherever possible," said Swan.

"Businesses settle with the BSA because they have been caught using under-licensed or illegal software and, in such cases, [that] works in the favour of the business by enabling them to avoid additional costs and the media attention that a court case brings."

When pressed on how many of the BSA's leads result in police convictions, Swan stopped short of giving an exact figure, but said: "We carefully vet the leads we receive and act on about 50 per cent of them, [because] as previously explained nearly all these actions are settled out of court, so civil action is rare."

The source called on the BSA to scrap its whistleblowing reward scheme, claiming it could lead to "malicious" and "vexatious" complaints being made against companies by disgruntled employees.

"The quality of leads would go up and the BSA would not have to sift through malicious allegations, as the people sending them in would only be motivated by the desire to uncover wrongdoing," he said.

Howard Sklar, an advisor at the InfoRiskAwareness Project, said he is not sure the BSA has a case to answer.

"The BSA's actions seem to stay within the act's guidelines, although there could be situations where it might cross a line [but] it remains to be seen how narrowly the UK authorities draw that line," said Sklar.

"Reasonable regulators would not prosecute the BSA for incentivising whistleblowing of wrongdoing, [but that depends on] how reasonable or business-friendly UK regulators will be."