$129B in predicted costs

A new global study commissioned by Microsoft Corp. and conducted by International Data Corp. (IDC) on the effects of malware found in pirated software discovered that the chances of infection by unexpected malware are one in three for consumers and three in 10 for businesses.

The cost of dealing with the impact of malware-induced cyber-attacks for enterprises is predicted to reach $114 billion globally in 2013, while in Asia Pacific, the study forecasts spending will reach $39 billion. The regional number increases to a staggering $129 billion if the cost of data loss is taken into consideration.

Consumers also share the burden and cost, with the IDC study showing that as a result of these infections consumers worldwide will spend 1.5 billion hours and $22 billion identifying, repairing and recovering from the impact of malware.

The study analyzed 270 websites and peer-to-peer (P2P) networks, 108 software downloads, and 155 CDs or DVDs. IDC also interviewed 2,077 consumers and 258 IT managers or chief information officers from Brazil, China, Germany, India, Mexico, Poland, Russia, Thailand, United Kingdom and the United States.

Researchers found that of the counterfeit software that does not come with the computer, 45 percent is downloaded from the Internet. Of this, 78 percent is downloaded from websites or P2P networks and includes some type of spyware, while 36 percent contained Trojans and adware.

“The cybercrime reality is that counterfeiters are tampering with the software code and lacing it with malware,” said Jeff Bullwinkel, director of legal and corporate affairs for Asia Pacific and Japan at Microsoft. “Some of this malware records a person’s every keystroke—allowing cybercriminals to steal a victim’s personal and financial information—or remotely switches on an infected computer’s microphone and video camera, giving cybercriminals eyes and ears in boardrooms and living rooms. The best way to secure yourself and your property from these malware threats when you buy a computer is to demand genuine software.”

Director General Ricardo Blancaflor of the Intellectual Property Office of the Philippines (IPOPHL) said: “The results of the IDC study should make our countrymen realize that, when they buy software, they must make sure these are genuine or when they buy computers, that they are loaded only with genuine software. Otherwise, the risks of their PCs becoming infected by malware and spyware and numerous other viruses are high and the costs may turn out to be more expensive for them in the end from the cost of repair and the disruption of their business operation or practice of their profession.”

“On the part of the re-sellers, they have a responsibility to offer only genuine software in their establishments, whether just the software itself or pre-loaded in the computers they sell. The risks of being found using or selling pirated software by the Pilipinas Anti-Piracy Team (PAPT) during their inspection sweeps are also great as are the consequences in terms of disruption to their business and, if declared guilty, in terms of fines, imprisonment and lasting damage to both their corporate and personal reputation,” Blancaflor underscored.

The IDC study, titled “The Dangerous World of Counterfeit and Pirated Software,” was released as part of Play It Safe Day, Microsoft’s global initiative to bring awareness to issues related to software piracy.

“Our research is unequivocal: Inherent dangers lurk for consumers and businesses that take a chance on counterfeit software,” said John Gantz, chief researcher at IDC. “Some people choose counterfeit to save money, but this ‘ride-along’ malware ends up putting a financial and emotional strain on both the enterprise and casual computer users alike.”

The following are among the highlights from the consumer survey:

62 percent of respondents knew someone who had used counterfeit software and experienced security issues

55 percent of the time, counterfeit software slowed their PCs, and the software had to be uninstalled

50 percent of respondents noted that their greatest concern with using counterfeit software was data loss

30 percent were most concerned with identity theft

Embedding counterfeit software with dangerous malware is a new method for criminals to prey on computer users who are unaware of the potential danger.

Customers are encouraged to visit www.microsoft.com/security to learn about malware and ensure their machine is not infected; if malware is present, the site offers tools to remove the infection. Customers shopping for a new computer are encouraged to buy from a reputable source to ensure they are receiving genuine Microsoft software.