Despite these factors global software piracy rates are on the decline. However, the number of illegal applications installed continues to grow, according to the Business Software Alliance (BSA) and the Software and Information Industry Association (SIIA). In 1998, 38 percent of applications in use globally were pirated, down from 49 percent in 1994. Yet, 231 million business software applications installed were pirated, 2.5 million more than in 1997. This led to an eleven billion dollar loss in revenue by software companies (Paquet). Jason Penchoff, a BSA spokesperson, states, "Software piracy affects company productivity and jobs. For every free package or unlicensed package of software, companies are losing money. If an automaker lost 38 percent of its revenue, there would be a huge outcry" (qtd. in).
So how are users obtaining all this illegal software? Consumers now have the ability to purchase goods from their computer. Generally when we think of electronic commerce, we mostly think of business to consumer transactions. But one of the most rapidly growing developments in electronic commerce is the consumer-to-consumer market. The rapid growth of Internet auction sites has created shopping opportunities for online consumers that were never before available. According to SIIA's Piracy on Internet Auction Sites, "consumer-to-consumer online auction revenue will climb from $4 billion in 1999 to more than $15 billion in 2004" (3). This has created a new opportunity for rampant software piracy. Through these auction sites, such as Amazon, eBay, MSNBC Auctions, Yahoo and others, software pirates are establishing a large customer base among often unsuspecting individuals.
In order to determine how bad of a problem this was, SIIA initiated its first investigation into online auction sites in 1999. The investigation showed that 60 percent of software being sold online was illegal. In the spring of 2000 a similar investigation showed that the number had risen to 91 percent (4). Clearly software pirates have recognized these auctions as an easy, cheep, and relatively anonymous place to sell illegal software.
For the price of a recordable CD-ROM, which is usually les than a dollar, the software pirate can make a copy of an application that is then sold for around $40. High profit combined with the low-risk of being reported by unwitting consumers, has made auction sites a haven for software piracy. The SIIA received one email from a pirate who bragged, "114 orders last week alone" (qtd. in). At $39 profit per CD, this amounts to over $4400 dollars in just one week. Attempts to remove these pirates often prove feudal, as the seller will often just change their screen name or auction description (4).
Another way that...