Microsoft to Get Tough on License Dodgers

An anonymous reader writes "PC Advisor reports that Microsoft is going to start getting tough with certain small business customers. They are going to examine their small customer license database — any discrepancies and it will call you for an audit. If you refuse it will send in the BSA and the legal heavies. "

oh yeah

[User 956]

PC Advisor reports that Microsoft is going to start getting tough with certain small business customers.

They're starting with the small ones, because we all know what would happen if they started with the big ones.

Cringely

[mfh]

Cringely mentioned a while ago that people will disrupt Genuine Advantage as a first offense against Microsoft, so if they get tough with people who have legitimate copies, this will get really interesting, really fast.

Reason to check out Linux

[bb5ch39t]

If they are truly "small", then their "lock in" may well be light enough to consider using Linux instead. For those things which don't have an equivalent, I'd check to see if it ran under CrossOver Linux (was CrossOver Office). Convert all MS Office documents to Open Office documents. Not difficult, unless there are a lot of VBA macros. Convert MS SQL server to MySQL or PostgreSQL. Start converting VB.NET stuff to something else (I'd say Java, but I don't want the flames [grin]).

MSDN

[jsnipy]

I wonder how universal MSDN subscribers will affected by this?

But, can the BSA actually do anything?

[MysticOne]

The BSA is not a government entity, nor is it part of any law enforcement. If Microsoft wants to audit you, and you tell them no, can they actually force it on you? Or is this something where you have a contractual agreement with them (for your legitimate copies of Windows) that allows them to audit you whenever they feel like it? If so, wouldn't this simply encourage people who pirate a few copies of Windows to simply pirate all of them? You can't be in violation of a contract you don't have.

Been there

[zenray]

At my former job Microsoft did this to us already. We were one company with two divisions that had individual accounts with Microsoft. Stupid, but that was the way that the owner wanted it. Anyway Microsoft was reviewing the size of the company (from what source I don't know) and only one of the division's software purchase from them and demanded an audit claiming that we did not purchase enough software to run a busniess the size we were. They implyed that we must be 'pirateing' some software. It was a major PITA combining audit data from both divisions.

Oh, yes. PLEASE throw them all in the briar patch

[Ungrounded Lightning]

How cool. So Microsoft is going to use their "genuine (dis)advantage" tools to get serious about collecting their license fees.

So what does this do to the "total cost of ownership" of windows versus open source solutions?

How much of those calculations especially at the PHB level - are done assuming either that all their installations are paid for (and nobody installed any extras or forged their identification) or that they can get away with extras - and in either case didn't factor in being audited? (That's a BIG cost even (especially) if it turns out you're squeaky-clean.)

Perhaps this will create additional incentives to switch.

Re:So true

[QuantumG]

You mean other than the fact that civil law around the world makes it legal to build private police forces like this to enforce copyright? That these private police forces can enter private property, seize assets that contain confidential information, and are accountable to no-one? The BSA and other copyright police forces have more power to search than the FBI. Not withstanding the obvious civil rights concerns, or the privacy concerns, copyright owners have the power to look at any computer system, any piece of source code even, that they may find interesting. Who gets to look and where they get to look is determined entirely by who has the best lawyers. In most parts of the world, the local police will happily aid in the use of force to inspect.

I'm waiting for the next upgrade to the TRIPS treaties to see whether or not copyright police forces have started demanding covert inspection rights.. making it legal for them to plant spies in your business to see if you have all the appropriate licenses or whether any of your source code is violating their IP, without the messiness of a raid. Maybe they'll ask for widespread surveillance rights too.

Re:So true

[captainjaroslav]

Your comment makes complete sense and it's obvious you're not trolling, however, it doesn't take into account the quite real possibility that MS is identifying legitimately-purchased copies of Windows as illegitimate for some reason. (I don't use Windows on my own computers, but there was an article here the other day about MS's estimate of what percentage of Windows computers are running illegal copies and a large number of the comments were personal stories about MS making just such mistakes.)

Will MS compensate businesses for the time they have to spend proving that their copies are legal?

Why now?

[EmbeddedJanitor]

Vista!

Why didn't they do this 6 months or a year back? Nope, they're waiting for Vista. Thus is an extra encouragement for people to "Get Legal" and thus get Vista and push up Vista sales numbers.

After a few months people (shareholders, analysts etc) will be looking at Vista sales and they better be selling it like crazy to support all the hype.

Re:So true

[Jeff DeMaagd]

I don't condone copyright infringement. Now that's out of the way:

The problem is that it sounds as if BSA has near-police powers, which is going too far.

I am also curious if it would backfire. I remember the story a while back where a business got hit with a stiff fine and heavy legal fees. They paid up and simply switched to open source software after that. Commercial software makers would never get another dime from that business beyond the settlement.

Re:So true

[TheFlu]

Not sure if it's who you were thinking of, but this happened to Ernie Ball, the largest maker of guitar strings. http://news.com.com/2008-1082_3-5065859.html [com.com]

Re:But, can the BSA actually do anything?

[Anonymous Coward]

EULAs have not yet been proven 100% enforceable. I can put it in an EULA (which you don't see till you have paid and open the software) that as a condition of opening and using my software, you authorize me to bang your wife at least once a week provided I find her hot enough. Doesn't mean a court's gonna accept my complaint when I come whining about having blue balls, since you couldn't even see the conditions until after the time of sale when the exchange of money (and hence the actual sale and enforceable contract) took place.

Just more saber rattling, why do you think there's a press release? If anything, all they could do here in the US is sue you (since technically I CAN sue you for my blueballs, even if it's a stupid thing to sue for) for damages, then claim they have no licenses for you on record and show systems inside your network hitting Windows Update. From there I'd wager the judge would subpoena the information since they've already shown a possibility that you're pirating. You don't have to let MS in on force of a shady EULA cause, but on a court subpoena you sure as hell would.

Of course, IANAL, so they may not be able to do so in a civil suit. Not really sure, but either way the EULA won't matter dick.

Re:Yeah, RICO!

[alienmole]

Relevance? What's that?

Perhaps you aren't aware of the history behind the use of the RICO law, going back at least to Rudolph Giuliani's use of the law against Michael Milken. For your further amusement, see e.g. The continuing expansion of RICO in business litigation [findarticles.com].

Re:But, can the BSA actually do anything?

[LParks]

Its not just in the EULA, but its also in the Microsoft Master Business Agreement, which you must sign before entering into any contract with MS.

Re:But, can the BSA actually do anything?

[harpune]

There's a clause in the EULA where you give Microsoft or it's agents the right to come in and audit you at any time, at your expense. Refuse to let them audit and you're automatically in breach of every Windows license you have in addition to any other violations. Can you provide a citation?

Re:BSA?

[jazman_777]

It's described here [sfgate.com].

Re:So true

[QuantumG]

Heh, have you heard of Trolltech's licensing policies? They license on a per-developer basis. You actually have to give Trolltech the names of your developers.. and licenses are not transferable. If the developer leaves, the license is void (the developer doesn't take the license with him, it just ends) and you get no refund for the remaining period. Mind you, Trolltech are unusual (that's putting it nicely).

Re:So true

[EtherMonkey]

Hogwash.

The BSA is not a government or law enforcement agency. It is a commercial entity engaged on behalf of a copyright holder to perform audits of suspected license violations. Your participation with their audit is voluntary unless they have sufficient probably cause to justify a warrant, in which case they will be accompanied by a law enforcement agent. And quite frankly, there's no reason why you would want to cooperate with the BSA, even if you know your are 100% in compliance, because of the cost in your time in going through the process.

The biggest problem is going to be finding purchase records at all. Most businesses are not sufficiently organized to deal with a license audit. And, since most small businesses buy their software through multiple sources -- OEM, eCommerce, local retaillers, electronics stores, even bundled with other applications -- usually the business is forced to go back through tax records to come up with receipts and invoices. Overall, it is usually a combination of physical evidence -- invoices, credit card transactions, physical media, license keys, registration codes, email messages, etc -- that combined provide compelling, if not conclusive, evidence of legal purchase. If a company changes its name, or merges with another, there will be sufficient documentation of what has occurred that this wouldn't be a problem. An original receipt doesn't even need to show the name of the purchaser (i.e, buying MS-Office at Staples doesn't make your copy illegal just because Staples doesn't print your name on the receipt).

Remember that, at least in the US, the evidence must prove guilt beyond a reasonable doubt. If you have original media, CD-cases and CD-Keys -- all the mechanisms of Microsoft's license enforcement -- it is unlikely that a jury will find in the BSA's favor for lack of purchase records.

Re:So true

[Anonymous Brave Guy]

You mean other than the fact that civil law around the world makes it legal to build private police forces like this to enforce copyright? That these private police forces can enter private property, seize assets that contain confidential information, and are accountable to no-one? The BSA and other copyright police forces have more power to search than the FBI.

I'm sorry, I must be new here. Exactly what UK law gives the BSA, or anyone else, any authority to enter private property and seize assets?

When the security guard on the door of my company tells them they may not enter, exactly what recourse do they have, other than going to court?

And if my company does have proper licences (as proven in court, which is not the same as producing whatever specific and awkward evidence the BSA would like to see) why should my company not then ask for costs from the BSA, as permitted under UK law?

Re:Gets Tough?

[Anonymous Coward]

Because my actual private property rights on the physical computer system TRUMP your speculative theory...

Sir, you are silly. Perhaps you're not from this country or planet? Microsoft is a multi-billion dollar corporation who makes multi-million dollar contributions to the Republican AND Democrat parties. Do you know President Bush personally? No? Then, YOU HAVE NO RIGHTS COMPARED TO MICROSOFT. Now, will you please turn around so that Gates & Co can enter?

Undisclosed balance sheet liability

[ikekrull]

Why, its almost as if people who license Windows find themselves with an undisclosed balance sheet liability - the cost of an audit, and the risk that even legally purchased copies of Microsoft software will need to be re-purchased because of a lack of documentation.

In all of my Linux vs. Windows discussions...

[Glowing Fish]

In all of my Linux vs. Windows discussions, I've noticed a pattern: I usually end up arguing legitimate use of Linux vs. illegitimate use of Windows. Many people don't even know that they are using Windows' illegally. Many people have no idea that having the CD does not mean you are allowed to install it on as many computers as possible. This is something people should learn as they step up from using Windows to play games to using it in business, is that their are rules you have to follow. You are probably not going to get caught for using your brother-in-laws copy of Windows to play games. But people who go into businesses often are totally unaware of that.

A few times at Free Geek [freegeek.org], people have asked me why we don't use Windows. After all, these computers coming in have Windows on them, right? So we can just pass it on to another person, right? And none of these people have bothered to read the EULA, which states:

The initial user of the Software may make a one-time permanent transfer of this EULA and Software to another end user, provided the initial user retains no copies of the Software. This transfer must include all of the Software (including all component parts, the media and printed materials, any upgrades, this EULA, and, if applicable, the Certificate of Authenticity). The transfer may not be an indirect transfer, such as a consignment. Prior to the transfer, the end user receiving the Software must agree to all the EULA terms.

(Point 13 of the Windows XP Home EULA)

People who talk about how "easy" Windows is are not looking at the fact that Windows is more than just the software you use..."Windows" is also the legal terms of ownership. And those often, especially when you are working in a business, get very far from easy. If Microsoft was really auditing the usage of their software, it would get next to impossible. But often people don't know, or just don't care about this. If they were, they would have to factor it into their calculations of "ease".

Re:Gets Tough?

[pnot]

I still dont see what makes people think they have the right to a fair trial from companies. If you use their product, you're subject to the terms and conditions that go with that product.

Three points:

1. Who says I'm using their product? They conduct the audit on the assumption that I am. If I have never bought a copy of Windows in my life, what on earth would give them the right to march into my premises searching for the copies of Windows that I don't own?

2. Having read the XP Professional EULA, I can't find anything about consenting to searches of my property. I may have missed it, though. Could you refer me to the relevant paragraph, please?

3. If such a paragraph does exist, is it enforceable in law? AIUI, the enforceability of click-through and shrinkwrap licenses is still in doubt. Furthermore, there are certain statutory rights which can't be signed away. I would suspect that the right not have strangers rifling through your personal property is once of these, though IANAL.

In the UK, the TV Licensing Authority has no right to enter my home, even if they believe I am operating an unlicensed television. The RSPCA has no right to enter my home, even if they believe I am torturing my dog. Now, I realize that I didn't sign a EULA for my TV or dog, but I was under the impression that some kind of court order is necessary before some random organization can barge into my premises to conduct a search. Hell, even the police need a search warrant... right?

Re:Gets Tough?

[Anonymous Coward]

DM9290 brings up very valid points. I was threatened with such an audit. This practice DOES happen ALREADY in the US. MS demanded that I pay them money for suspected license violations (lacking sufficient licenses for the number of machines I had). I politely told them I wasnt sending them anything or letting them on my property. The BSA followed up with a demand for money or a forced audit. I told them (not as politely) to go to hell and I would have any of their personnel arrested and sue them if any of their personnel (or MS's) stepped on my property.

Here's the clincher... our machines were (quite frequently) hit by machines from MS's "internal" network before this - perhaps to ascertain the number of machines we has running. BUT... here's where it gets interesting... all our machines were running OS/2 Warp or Warp Server - except 2 Macs - which were running MacOS 8 and 9. I reminded them that THEY have no control over licensing to OS/2, and even though it wasnt their business I had legal copies of OS/2 for FAR more stations than I had. I then advised both MS & the BSA that I permanently was refusing them the right to enter my property for ANY reason and any such action contrary to that would be considered criminal tresspass as they had been notified in writing. A few more scans of my network and I never heard from them again.

Until my final letter and a few nasty calls to the BSA though, I was being threatened with a 5 figure fine and imprisonment (I didnt know it was their right to make such threats - they were worded as "you will be..." not as "if you are found in violation of, you may be").

Needless to say, what if I was a poor windows user, in full compliance, but bound by MS's idiotic license agreements to allow such behavior?

- RobertMfromLI

PS: And yes, I really was running all OS/2, eComStation or MacOS - no Windows.

Re:One more reason to go Linux

[Schlemphfer]

Imagine being able to tell the Microsoft auditor to fuck himself/herself, and when the big heavies show up, all they see are peace lovin' penguins fluttering around the office with no short and curlies to grip on to.

And then imagine the BSA showing you the logs from six months ago, when six of your unauthorized Windows computers were automatically downloading Windows security fixes from Microsoft. What do you think brought the BSA to your doorstep in the first place?

Windows' notorious security problems may turn out to help Microsoft in their antipiracy efforts. What business can afford to not download the latest patches?

They don't have to be worried

[feld]

I reported my previous boss to the BSA for his heavy piracy (which lead to my quitting) and guess what -- he's still in business and hasn't been contacted. It's been two months. He had several 2003 Enterprise Servers and at least 100 XP and Office XP that were pirated. Not to mention the VMWare ESX Servers that were pirated, the Red Hat Enterprise Linux (seriously, why? WHY!?), and the many copies of Photoshop.

He's still somehow in business when he couldn't afford the licenses for that stuff anyway. I've never been contacted back by the BSA. Needless to say, I'm rather upset, and wish I could just do some vigilante justice and nuke his systems, but I have morals.

Re:One more reason to go Linux

[ajs318]

We actually got raided by FAST (Fucking Arseholes and Stupid Tossers -- the UK arm of the closed-source-peddling wankers' price-fixing cartel) once. We had about half a dozen Windows boxes (all fully licenced, for running legacy software needed at the time to be compatible with Group Head Office) and everything else was Linux. The gestapo agent was horrified at first when my boss told him that we had no procedure in place for preventing employees copying software from their workstation. He shut up when we explained that since there was nothing on any employee's workstation that it would be illegal for them to copy, there wasn't a lot of point preventing it.

We now have a few fingers in the Open Source Migration Strategy pie, so we obviously have a positive interest in seeing Windows "pirates" get busted -- it gives us an opening to sell our services :) Which would you rather have -- a litre of milk that you aren't allowed to let anyone else drink; or a cow that once you've learned how to feed and milk her, which really isn't as hard as the dairies like to make out, you can get unrestricted milk for life?

Re:Gets Tough?

[ivan256]

In 2001, the company I worked for switched from a Windows NT 3.5 server to Linux. The workstations stayed with Windows and upgraded to Windows 98. We payed for all of our upgrade licenses for the workstations and for full licenses on the whiteboxes we built to add to the network... Everything was perfectly legal. But we didn't upgrade the server with the rest of the network and it triggered a BSA audit. The audit took about 100 hours of two administrators time to document all the software on all of our boxes, and to properly convince them that the internally written software was really internally written. It was a HUGE waste of time and money all because they thought that maybe we pirated a copy of NT 4.0 (Or to punish us for converting to Linux.. Who knows?).

If the notices are that you have to produce a bunch of documentation that is going to take hundreds of man hours to come up with, then yes. It is an intrusive action. They should have to provide some evidence that you are breaking the rules, and "you didn't buy the new version from us yet" is *not* sufficient. They shouldn't be allowed to force you to prove your innocence because they feel like it.