China’s reputation for its heavy use of pirated software is well established. According to the latest Compliance Intelligence data, China topped our list of Top 20 license misuse and piracy hotspots.
The latest research from BSA reports that commercial value of unlicensed software in China is $6.8 billion (14.77% of total worldwide commercial value). This is 25 percent lower than the unlicensed commercial value reported in 2015. This drop points to the growing opportunity to recover license revenue and the fact that China has tightened its IP regulations.
In fact, Compliance Intelligence customers have captured reliable infringement data, pursued the opportunities, and generated seven-figure settlements in China.
Why Does China Have High Rates of Software Piracy?
According to studies, piracy manifests at the highest rates in developing nations such as China, Russia, and India especially among young (16-24) males in urban environments who see illegal downloads as separate, and less harmful, than traditional theft. However, studies into the cultural norms of China have shown that Chinese students respond differently in their attitudes toward software piracy. An MIT study for the Journal of Economics and Statistics found that “most students would switch to Internet piracy even if the government eradicated street piracy.” This intriguing statistic can be partially explained by a 2015 study which showed that unlike US students, Chinese students engaged in digital piracy primarily based on the “perceived behavior and approval of others.”
As these studies show us, one of the reasons software piracy in China has been difficult to eradicate is because those purchasing illegal license are operating under a different set of cultural perceptions. While American students were more likely to cease downloading software when threatened with legal sanctions, Chinese students were far more sensitive to social norms. As the European Journal of Information Systems found, to combat software piracy in China, companies need to focus not on the legal implications of piracy, but instead on how buying illegal software harms those proximate to the user. By targeting the specific behaviors which encourage software piracy, businesses have a much better chance of protecting themselves and their products.
Tune into our Piracy Impact Podcast to hear from software vendors and law firms about the problems, opportunities, perceptions and myths surrounding the software license compliance.