Hundreds of counterfeit Xbox games have been seized by Customs officials after a recent raid on the Brightwater Commons market – but the haul only represents the tip of the iceberg, according to a local attorney.

Charl Potgieter of Bowman Gilfillan, who accompanied South African Revenue Services (SARS) officials and representatives of SAFACT (the Southern African Federation Against Copyright Theft) on the raid, says there is clear evidence that piracy of games, software and music was on the increase in South Africa.
“Right now, we’re seeing a growing wave of counterfeit software from organised criminal syndicates in the Far East,” says Potgieter. “We suspect that many international crime organisations are now involved in counterfeiting to some degree – which effectively means that people who buy pirated goods are funding organised crime.”
Although no arrests were made in the unannounced raids at Brightwater Commons, investigations into the origin of the goods is continuing.
As part of its ongoing anti-piracy operations, Microsoft has launched a massive campaign across KwaZulu-Natal.
Charl Everton, anti-piracy manager at Microsoft South Africa, says the campaign is part of a nationwide effort to raise awareness of piracy of all kinds. She says the Internet is emerging as a major avenue of trade for fake goods, pinpointing auction sites as particularly useful for counterfeiters.
The campaign includes “mystery shopper” visits to more than 250 computer dealers across the province, the launch of a “clean dealer” certification and an education programme to alert consumers to the dangers of fake software and highlight the value of the genuine article for consumers.
Part of the campaign will focus on Microsoft’s newly-released Windows 7 operating system, which saw fake copies for sale weeks before the software went on sale last month.
Everton says Microsoft has have already launched investigations into the activities of several resellers advertising pirated copies of Windows 7. This includes one reseller from Stanger, who was selling copies of Windows 7 Ultimate for R130 on an online auction site – R3 000.00 below the average selling price. A pirated copy of Microsoft Office 2007, the company’s best-selling productivity software, will set shoppers back R70.00.
“In addition to these low quality counterfeit versions of software, South Africa is now also being flooded by high quality counterfeit software from well-known organised criminal syndicates in the Far East – and the pirates are getting more sophisticated in their approaches every day,” she said. “In this case the software is shipped as a complete package, including counterfeit hologram CDs and Certificate of Authenticity labels.”
Part of the problem, says Everton, is that pirates are seen as heroes in some circles.
“We need to change the perception that these guys are modern-day Robin Hoods,” she says. “This isn’t a case of taking money out of Bill Gates’ pocket to help the poor consumer, as the refrain often goes. Our investigations show that software piracy funds bigger criminal operations that affect each and every one of us at the end of the day.
Despite genuine copies of Windows 7 selling out in many retail stories hours after launch, it’s still estimated that more than a third of all software in South Africa is pirated. Research by the IDC suggests that reducing PC software piracy by 10% over the next four years could create an additional R6-billion in economic growth and R480-million in additional tax revenues in South Africa."
Everton believes that unscrupulous resellers who take advantage of consumers are only part of the problem.
“The bottom line is that you get what you pay for. We see many cases of customers who wanted to buy genuine software and believed they did, only to find out later that they were victims of software piracy. And although consumers who buy a R3 000.00 piece of software for R130.00 are often aware that they are purchasing pirated software, they probably don’t appreciate the security risks that come with using software that is installed with the hacked keys that are commonly used to circumvent the legitimate activation process,” says Everton.
The dangers of pirated software should not be underestimated, she adds. Several international news outlets have reported on malware built into pirated copies of Windows 7 for the express purpose of building a botnet – in other words, hijacking your computer remotely for use in hacking activities.
“Counterfeit software delivers a poor experience and impacts customer satisfaction – particularly if users don’t know that their software is non-genuine,” says David Caygill, business unit director at Comztek.
“For example, one piracy exploit caused more than 1-million reported system crashes on non-genuine machines before Microsoft could resolve it. The bottom line is that if customers are running genuine software, they’re much more likely to be protected from that negative experience.”