According to the Business Software Alliance (BSA), one quarter of the computer software used in UK businesses is unlicensed, representing some £800 million in lost revenues for software providers each year.

While some suggest that the industry-backed BSA exaggerates the extent of the problem, recent events suggest that UK businesses face an ever-increasing risk of a costly visit by the BSA or the UK-based Federation Against Software Theft (FAST). In June this year, an unnamed UK firm agreed to pay £250,000 to settle its licensing shortfalls and soon after this UK record was dwarfed by the $3.5 million settlement agreed earlier this month by an unnamed US-based international media firm.

The BSA and FAST rely heavily on tips from the public to identify potential wrongdoers. In the business context, information received from disgruntled IT personnel has been particularly helpful. Conducting regular software licence audits and reviews is the best way to minimise the risk of attracting the BSA’s or FAST’s attention; the prudent course after being approached by either of these organisations is to first audit the situation internally to understand whether or not there is any exposure.

Although the BSA and FAST do not have official powers of investigation they will likely refuse to take no for an answer and they often have legal leverage through audit clauses in software licences. While approaches by the BSA or FAST rarely end in court actions, they do often lead to payments which are generally based on the unpaid licence revenues, plus interest.

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FAST is currently lobbying the government to make punitive damages available, a legal reform that would make a letter from the BSA or FAST all the more costly to UK businesses.

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