Microsoft says it will continue to “come down hard” on software piracy after reaching a multi-million dollar settlement with French company, MPO Group, linked to the distribution of thousands of counterfeit copies of its server software.

Disk replicator MPO Group admitted that its Thai subsidiary inadvertently replicated thousands of Microsoft server software discs after relying on a fake licensing agreement. MPO agreed to a multi-million-dollar settlement, and cooperated in the investigation. Details of the agreement have not been disclosed.

Microsoft SA’s Mark Reynolds, Microsoft SA Group Manager: Small Business & Transactional Partners, says that even though MPO “stepped up and did the right thing” by cooperating with the investigation and acknowledging its responsibility, Microsoft felt it had little choice but to insist on a substantial settlement.

“Microsoft cannot stand by when counterfeiting and piracy undercuts the work of honest and responsible resellers and partners whose prices are compromised by the introduction of counterfeit software into the market,” says Reynolds.

“There’s no question that software piracy is a global problem for the industry. By addressing the trade in counterfeit software at the manufacturing level, we are effectively shutting down illegal operators down to the point of production.”

According to MPO, its Thai office manufactured 20,000 counterfeit copies of Microsoft Exchange and SQL Server products in July 2003 on the basis of what turned out to be forged documentation from a third party that purported to have a license to distribute Microsoft software. In fact, Microsoft does not license its software to be reproduced and distributed in this way.

Reynolds adds that Microsoft will continue to identify and investigate organisations that manufacture illegal software, with several suspected South African pirate operations under surveillance. The company has been dogged in its pursuit of software piracy, launching the Genuine Software initiative to educate customers and resellers about the tell-tale signs of piracy.

According to the Business Software Alliance (BSA), the global software industry lost $34-billion to piracy in 2005, amounting to 35% of all software used worldwide. This figure was up $1,6-billion from 2004. In South Africa, about 36% of businesses use illegal software.

“In the last 18 months, Microsoft and law enforcement agencies around the world have seized more than 675 000 units of fake Microsoft software and components. This represents a loss to Microsoft of $84-million,” Reynolds adds.