Sunday, October 26, 2008

Microsoft is NOT the Biggest Hacker in China!

Chinese surfers are crying foul at Microsoft's launch of the "Windows Genuine Advantage Program," which turns a screen black when it detects pirated software. It is believed up to 200 million computer users in China have counterfeit software on their machines.

China is well-known for being involved in the knock-off trade, as well as, selling dangerous and defective products in the global economy. The news has had a lot of stories about them censoring the Internet, violating user privacy and being involved in hacking on an industrial scale.

Ironically, Dhong Zengwhi, a Bejing lawyer, accused Microsoft of being the "biggest hacker in China with its intrusion into users' computer systems without their agreement or any judicial authority," according to the China Daily. His argument is that this will cause serious functional damage to users' computers and according to China's criminal law, Microsoft could be accused of breaching and hacking into computer systems. Zengwhi has filed a complaint with the Chinese government about this.

Does this mean Microsoft won't be able to out-source work to China?

I wonder if Mr. Zengwhi's opinion was when it was revealed that the Chinese were data-mining the communications of Tom-Skype users? Tom-Skype is the Chinese version of the popular Skype software, which allows people to communicate worldwide using the Internet.

Privacy violations in China aren't limited to Tom-Skype communications, either. During the recent Olympic games, the government openly monitored Internet communications, using the excuse of security to justify what many believe was censorship.

The allegation that Microsoft is the biggest hacker in China is questionable. Governments from all over the world have accused the Chinese of hacking into their systems and it isn't considered safe to carry a laptop, or even a smart-phone when visiting China. Recently, there was speculation that Commerce Secretary Carlos Gutierrez had his laptop hacked during a visit to China.

In fact, if you follow the news, the theft of intellectual property is often traced to the Chinese. The FBI has caught numerous Chinese agents stealing a lot of private and government information in the recent past.

Pirated software is a huge problem in the global economy. It is estimated that one third of all software being sold is counterfeit. A large percentage of the software sold on auction and even e-commerce sites is counterfeit, also. It isn't unknown for a consumer to think they are getting legitimate software when they are not.

Besides costing jobs and revenue to legitimate firms -- knock-off software can damage a machine, or even lead to information theft when malicious software is added to the mix.

I'm sorry that that certain people in China are outraged by Microsoft's solution to the theft of their property, but let's face it, they are hardly the biggest hacker in China.


Danny Lieberman said...

Interesting post. Good observations.

I disagree on the statement that "Pirated Software is a huge problem in the global economy" - the stat of 30% loss of revenue (source: BSA I believe) is arguable since it's based on the assumption that each unit of copied software represents a direct loss of sale for the software vendor.

If it were true, then the demand for software would be independent of price and perfectly inelastic.

If software demand was perfectly inelastic, then everyone would pay in order to avoid the cost of BSA enforcement. The rate of software piracy would be 0. Since piracy rate is non-zero, that proves that the original assertion is false.

Read more on the original post on this topic at Software piracy and the price of software

Shark Girl said...

The theft of intellectual property would also be traced to Defense contractors, but you don't hear about that in the news.

I have to congratulate Microsoft on figuring out a way to go after the thieves. China crying foul? Have they read the news lately? I'm surprised anyone is still doing business with them. I gladly avoid buying things that say "Made in China", if at all possible.

hanum said...

IT security consultancy Sophos said the number of companyfocused internet attacks was doubling each year, potentially costing companies billions of pounds through piracy, spying, sabotage and blackmail.