BSA stung unlicensed UK firms for almost £1m last year

Legalisation costs and damages clawed in by body representing Microsoft, Adobe and Autodesk rose 19 per cent in 2016, but rival body CCL dismisses the amount as a 'rounding error'

The Business Software Alliance (BSA) stung UK firms it caught using unlicensed software for nearly £1m last year - with the total rising by 19 per cent - partly because more disgruntled staff grassed up their employers.

The anti-piracy body takes action mainly against SMEs and leaves its members to conduct audits of larger enterprise firms unilaterally. These include Microsoft, Adobe and Autodesk.

Of the damages it secures, the BSA offers to pay up to 10 per cent of the total to whistle-blowers, up to a maximum of £100,000.

In the past the BSA has chosen not to disclose how much its enforcement activities bring in but in a release yesterday it revealed that UK firms it settled with coughed up £914,587 in legalisation costs and damages in 2016.

Despite recent BSA/IDC figures suggesting the UK unlicensed software rate is falling, that figure is up from £770,192 in 2015.

The BSA attributed the rise partly to a hike in leads it nets from whistle-blowers. It received 335 tip-offs last year, often from disgruntled employees, up from 290 in 2015.

However, one rival industry body representing end users dismissed the sum as a "rounding error".

BSA senior counsel Warren Weertman told CRN that the legalisation costs and damages it secures have been gradually rising in recent years but described the 2016 figure as a "significant increase".

"It might be a blip or it might be an ongoing trend; we will have to keep a close eye on it," he said.

"What we've seen, with some of the awareness campaigns we've been running, is that increasingly people are willing to blow the whistle on their employers for using unlicensed software. More employees are becoming aware of the issue of unlicensed software and take a moral approach that they are not happy working for organisations that use unlicensed software."

The £914,587 figure includes cases where firms have inadvertently over-installed software, as well as more serious cases where the actions have been wilful or involve counterfeit software, Weertman said.

"We certainly see instances of companies having unknowingly used unlicensed software," he said. "It could be the result of people over-installing software or installing software on the company's systems they are not allowed to install, right through to instances of where it's blatant and people know what they are doing and think they are going to get away with it.

"There was one case where the company knew what they were doing. They tried to stall us but ultimately we had them bang to rights and they had to settle with us."

A case where one UK SME shelled out £84,300 in damages for using unlicensed designed software was cited in the press release, but Weertman said the body recently settled another case where an informant received "significantly more" than the sums involved in the former case.

"All our cases originated from whistle-blowers but what is interesting is that very few informants actually claim the reward," Weertman added.

He said the BSA avoids stepping on the toes of its members, many of which have ramped up their own compliance activities in recent years as they seek to compensate for falling sales of new licences.

The BSA is not even allowed to act unless its members give it the nod to carry out an audit, he explained.

"Our members prefer to audit the large enterprise space themselves," Weertman said. "They are pretty large IT estates and to try to audit that is quite complex. Our mandate is to focus on companies in the SME space that aren't engaged with our members."

Earlier this month, trade body FAST launched a campaign incentivising software asset management (SAM) consultancies to report customers for using unlicensed software. The move was met with scepticism from some SAM consultancies we spoke to, with one of them branding it "counter-productive", and in a subsequent CRN poll some 65 per cent of respondents said they wouldn't blow the whistle on a non-compliant customer.

Weertman declined to comment on the campaign specifically, but described the debate as an "interesting question".

"It's one of those things where people need to make the right ethical choices based on what they are seeing and what they believe is right," he said.

However, Martin Thompson, founder of the Campaign for Clear Licensing, an end-user licensing body set up in 2014 partly as a counterweight to vendor bodies such as the BSA, criticised the BSA for its emphasis on whistle-blowing and enforcement.

"Given the software and maintenance market is measured in hundreds of billions, this contribution from BSA is comparable to a rounding error in the software market," he told CRN. "Rather than bleating on about whistle-blowing, wouldn't it be more effective to promote more constructive practices, like helping users to help themselves, increase understanding of licence programmes and encourage transparency and openness from software publishers?"