Piracy puts emerging market manufacturers at competitive disadvantage - Microsoft

Thursday, November 17, 2011

Software piracy creates a competitive disadvantage of more than US$2.9bn per year for manufacturers across emerging markets, including Latin America, according to a study on the financial impact of using illegal software.

The study - developed by consultancy Keystone Strategy and commissioned by Microsoft (Nasdaq: MSFT) - quantifies the anticompetitive harm software piracy inflicts on businesses that play fair.

In Latin America, Keystone found that the competitive disadvantage for manufacturers playing by the rules in Brazil alone reaches US$186mn.

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Over a five-year software lifecycle, manufacturing companies in BRIC countries - Brazil, Russia, India and China - will lose more than US$8.2bn to competitors that use pirated software to slash costs illegally. This gives pirating firms the opportunity to increase profits or reinvest in their businesses.

"Competition is unfairly distorted when a manufacturer gains a cost advantage by using stolen information technology, whether in its business operation or its manufacturing processes," according to the US National Association of Attorneys General.