You Need To Know These 9 Things About What Software Piracy Is

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Table Of Contents

  1. What is Software Piracy?
  2. Is Software Piracy A Real Problem?
  3. Is Software Piracy Dangerous?
  4. Am I Liable For Piracy If I Didn’t Know?
  5. What Is An EULA (End-User License Agreement)?
  6. Is It Piracy If I Share A Program That’s Free To Download?
  7. What Are The Types Of Software Piracy?
  8. Is Software Piracy Preventable?
  9. Can My Software Be Pirated?

1. What is Software Piracy?

Software piracy refers to using, copying and/or distributing a piece of software that’s subject to copyright. The software in question can mean digital goods such as video games, other computer programs or operating systems. Software piracy has more than 1 form, such as:

  • Copying a software program that you purchased legitimately in order to distribute it to other end users like friends, family, or anyone else through online means like torrenting.
  • Using a method known as “cracking” to access protected & copyrighted software that you didn’t purchase.
  • Distributing software online that you yourself received from a third-party that’s not licensed to sell or give away that software.
  • Modifying parts of the software, if the creator is against it or if the terms of use forbids it, and then distributing said modification (like altering the program’s source code)

All forms of software piracy are illegal. To make it a bit easier to understand why some of the above are illegal though, think of it this way: when you purchase a piece of software, you’re not purchasing the software itself. What you’re paying for is a license to use this software, to have access to it.

So, it isn’t yours to give for free or resell at your own convenience, as it continues to be the copyrighted product or service of somebody else.

2. Is Software Piracy A Real Problem?

Some people will argue that piracy shouldn’t be illegal, because you’re not actively stealing something. If you break into someone’s car and drive away, then they no longer have access to the car. However, if you pirate a video game, while you cost that vendor a sale, you didn’t take away any of their existing assets by pirating it. The video game is still very much theirs to sell to other users and regulate it via an EULA (end user license agreement) as they see fit, but you have free access to it.

You committed a crime, but not to the other party’s direct deficit.

Thing is, this type of thinking is costing people money and potentially their jobs on a daily basis. Let’s say you have the greatest cake recipe there is, and you’re making a living from selling those cakes. No one’s stealing your already made cakes, but they get access to your cake recipe and start giving them away for free. That’s your source of revenue gone in an instant, and you worked hard for it.

In 2018 alone, 37% of software installed or present on devices on a global scale was unlicensed/pirated. To put that into perspective for the movie industry, it means an annual revenue loss of $40 to $97.1 billion. The top offender countries for piracy website visits in 2018 were our own U.S on first place (17.38B), Russia on second place (14.46B), and India on third place (9.58B).

3. Is Software Piracy Dangerous?

To put it short: yes. While some groups of “pirates” have developed their infamy in underground groups for distributing “clean” unauthorized software, many pirates still include malware unto their copied files.

These are types of viruses that aren’t present in the original software, and their use can vary drastically. From infecting your device to a point of no return without an OS reinstall, to installing keyloggers that monitor your keyboard activity and send back your passwords or credit card information to the hackers.

It doesn’t stop there either. Some types of malware are very in your face, cutting your access to your device unless you send an X amount of money to a bank account (never do this, always look for another alternative). Others are discreet, lurking around your device and overloading your hardware with tasks like mining cryptocurrencies for the hackers.

Then of course, there are the legal implications. If you consciously download or use pirated software, you’re liable to answer to local laws & regulations. These range from hefty fines to more severe consequences like time in prison.

4. Am I Liable For Piracy If I Didn’t Know?

If someone else has tampered with your device without your knowledge, or you believed that the software you were using was genuine, it can get a bit complicated. Currently, the U.S. Copyright Law states that willful infringement of the software EULA is punishable by a fine up to $150,000. However, if it’s proven that the infringement has been unwillful, then there’s still a fine applicable, but up to $200.

It’s best that you make sure that the software you’re using or have installed on your machine comes from a verified source that’s allowed to sell it.

5. What Is An EULA (End-User License Agreement)?

When you install a piece of software like an antivirus, you must first click on “I Agree” on a wall of text that very few people read. If you do not agree to the terms specified within, the installation process stops and you can’t use the program. Because of this, the common practice is agreeing with it from the get-go.

Now, one of the things stated in a program’s EULA is that you’re not allowed to share it with other users. This does depend though, especially in the case of video games. If you’ve purchased a game digitally, let’s say on Steam (the biggest vendor of PC games), then you can share your library with a friend’s Steam account. In practice, this means they have access to the game “for free”, but you can’t both play it at the same time. You also can’t be logged into your account from 2 separate sessions/devices at once.

The important takeaway here is that if you’re using any legally acquired program, you’ve already agreed not to share access. This is true for your Netflix account too, as it’s a paid subscription.

6. Is It Piracy If I Share A Program That’s Free To Download?

No, file sharing of “freeware” software as it’s often called is completely fine! It basically mustn’t be copyrighted.

7. What Are The Types Of Software Piracy?

programmer hands on keyboard anti piracy

There are 7 main types of software piracy. Depending on each scenario, you’re either directly pirating software, or you’re an unknowing part of the process.

A. Softlifting

Another part of regular EULAs is that a program should only be downloaded on one machine. If you buy a single version, or piece of that software, but then you install it on multiple computers, you’re basically pirating it. This is the reason why softlifting is one of the most widespread piracy methods, and even most schools and businesses are guilty of this. The main reason is saving money.

Some companies allow this though, to an extent. If you own a physical copy of a PlayStation game for example, it’s allowed and encouraged by Sony to share it with a friend, but you can’t start the game yourself without the disc being inserted.

B. Counterfeiting

This is the illegal duplication and subsequent selling of software programs. The price is lower than that of the original software, which is the main reason for purchasing it. It’s to be noted that counterfeit software is made to look as though it was original.

C. Hard-disk/Solid-State Drive loading

This is the act of installing software on an HDD or SSD (or copying it) that’s then sold to an end user. This technique can be a go-to method of selling the end user a hardware piece with a functional version of an operating system on it, or other programs, but is still illegal. It can also be done without the buyer’s knowledge, but it still makes them an accomplice and subject to the up to $200 fine (in the U.S.).

D. Client-server overuse

This is the usage of the same copy of a software product by multiple people at once, or at different times on multiple devices. Most commonly, there’s a local area network involved from where multiple users download the same software version.

E. Online Piracy

This is the one you already know of, and the one that’s being used the most. In simple terms, online piracy revolves around computers with high speed internet connections that are connected to a peer-to-peer (P2P) network. True to their name, they form a vast web of interconnected devices that are continuously sharing bits of data of that program among themselves, until the software is completely downloaded on each machine.

F. OEM unbundling

If an original equipment manufacturer intends a software program to be sold exclusively as part of a bundle (think of an Adobe bundle that would have photo editing programs exclusive to it), but you’re selling it separately, that’s also piracy.

G. Product keys of uncertain origin

There are websites out there that’ll sell you “legitimate” product keys for anti-viruses, video games, photo editing programs and so on. It’s completely feasible that they’re official ones and the website is just a third party vendor, but you have no way of knowing if your particular key is official. If it’s a cracked key, you’re indirectly taking part in the piracy of that software.

8. Is Software Piracy Preventable?

Yes, and a lot of companies are using the following safety measures:

  • EULAs — these agreements between the software creator and the end users assures that legally, the software itself always belongs strictly to the creator; it also makes redistribution and copying against the terms of use, and illegal in the face of the law
  • Safeguards against tampering — some programs are made to cease working if changes are detected in their source code
  • DRM — digital rights management is an albeit controversial concept that makes sure that purchased software is never truly yours; you have the right to use it, but it belongs to the creator and is subject to any terms of use changes in the future, to which you must agree if you wish to continue using it; it’s also a safety measure against the copying of the program’s code, as it restricts your access to its inner workings (I.E. you can’t copy it, or forward it, or usage needs an internet connection etc)
  • Product keys — a straightforward method where you’re sold a unique mix of letters and numbers that serve as your identifiable code for using the product
  • Watermarks — another straightforward approach, where companies will include their logo on software interfaces so as to differentiate them from copied versions

Read more about this in our how to prevent software piracy article.

9. Can My Software Be Pirated?

Any software can be pirated, no exceptions. It just needs someone that’s more skilled at cracking the program than your team is at securing it. Piracy isn’t exclusively for software programs either. Songs, movies, TV series; these are also subjected to piracy daily.

At Toltec, we’re experts at investigating, documenting and stopping signal piracy. If your company is in the cable & satellite TV, streaming content or Motion Pictures industries, there’s a significant chance your own content is at risk. Get in touch with us at (727) 403-1129 today.

Software piracy refers to using, copying and/or distributing a piece of software that's subject to copyright.


We’re ready to safeguard your business by finding the involved parties and helping you prosecute the cases civilly or criminally.