Mainland companies will be fined for using pirated software as Beijing realises knock-offs are hurting local software businesses, which officials see as a catalyst for continued economic growth.
According to an April notice from the National Copyright Administration, mainland firms found using pirated software will be forced to switch to legal products. They must also pay a fine ranging from twice to five times the value of the software. A computer company that installs pirated software must also pay back illegal gains.
The notice suggests that mainland companies budget for licensed software before they shop for computers - most companies do not set aside software funds. Pirated software now in use should be replaced as soon as possible, the notice added.
A spokesman from the copyright administration said this notice was his department's first outline of a specific punishment for users of pirated software. He said his department was drafting measures to extend the rule to government offices. He anticipated that rules issued by July would make the use of pirated software a legal offence, leading to more severe punishment.
The unnamed official said the new policy would increase company expenses because licensed software often cost several hundred times more than pirated versions, which may cost as little as 10 yuan (about HK$9.20). He suggested companies bargain with software developers for bulk discounts.
The official said the notice was aiming to help China's software industry because piracy threatened its very survival and hurt the development of new technologies.
China's software developers are in full agreement. Gao Qun, the deputy head of the China Software Alliance, a non-government organisation set up by major software companies, said piracy in China would not ruin foreign developers because China was a relatively small market. But it was lethal to local developers, because China was almost their only market, he said.