IDC Study USD 0.8bn Saved Through Using Pirated Software Regresses to a USD 35bn Loss in Exports

Author:Chris Luijten

June 26 , 2014

Against the backdrop of the Law Against Unfair Competition in the United States, International Data Corporation today unveiled a whitepaper on the possible risk for India’s manufacturing sector due to non-compliance with clean IT practices.

According to IDC, use of pirated software by a mid-sized Company in India can expose the Company to an export loss of $35 million, while the savings expected from using pirated software is less than a fraction of the expected loss, at $0.84 million. The Law Against Unfair Competition in the United States promotes fair competition and encourages manufacturers to respect property rights in their IT systems. All manufacturers whose products are sold in the United States must achieve full legal compliance of their IT, failing which they risk liability and lost sales opportunities. The law provides a strong incentive for manufacturers to take responsibility for their IT systems and ensure that businesses are able to compete fairly.

What is UCA?
The Unfair Competition Act (UCA) Law states that ‘A business that manufactures a product while using stolen or misappropriated information technology (stolen IT) in its business operations engages in unfair competition when the product is sold in Washington, either separately or as a component of another product, in competition with the product made without use of stolen IT." The law also implies that the US Company selling within the State of Washington is responsible for the suppliers who may be located anywhere in the world. It applies to all manufactured products and to all suppliers from any country, and allows the Government to block the US Company from selling the finished product in the State and compel them to pay damages for what either the Company themselves or their overseas supplier(s) did.

The law has been passed in two States - Louisiana and Washington. The other 36 states are seeking ways to use the traditional powers of their office to address the unfair competition advantage and taking actions under existing Fair Competition Acts. These growing enforcement actions are a logical and welcomed step toward the call made by U.S. officials to curb unfair competition and ensure a level global playing field for suppliers and manufacturers.

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