Four out of every 10 of the software programs in possession of consumers are pirated (Hayes). The internet and the ability to copy digital media have created an epidemic that is hard to regulate. Much of the public is not aware of the actual effects of acquiring software illegally. Software piracy is an illegal practice that has caused a major economic problem in the field of software engineering; therefore it requires major attention by law enforcement and various other agencies.
Software piracy affects the economy in several different ways. "Software piracy undermines the stability of the burgeoning ecommerce industry and it is a direct threat to innovative companies that help strengthen the U.S. economy," as quoted by Deputy U.S. Treasury Secretary Kenneth Dam. As stated by Bauman, in the year 2000 software piracy constituted a $12.2 billion dollar loss worldwide. As of 2002, the rate of software piracy in the United States was at 23 percent, which resulted in 2 billion dollars of lost revenue. As a result, the industry leaders also had to release over 105,000 employees because of the lost revenues. The corporations lost 5.3 billion in wages along with 1.4 billion in lost tax revenue all within the year 2002. Using information obtained by Gallegos and Cook, the Asia-Pacific region was the only region to see a rise in software copyright infringement. The regions piracy rate increased from 47% to 51% resulting in the loss of $4.1 billion dollars in revenue for the corporations in that region. Vietnam had the highest rate of illegal software distribution worldwide, which is currently 97%. .
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China is not very far behind with 94% of all software being illegally copied. Subsequent to China, Indonesia has 89% of all software currently being illegally obtained. The BSA found that after a steady decline for six years, piracy rates worldwide remained equal with the previous year at about 37%. These numbers are staggering compared to revenue losses from other sources.
