Safeguards Punish Consumers, Not Pirates

Dave Wilson is The Times' personal technology columnist. He can be reached at

Microsoft’s new Windows operating system, XP, promises a platform much more crash resistant than the company’s previous offerings. Unfortunately, XP also contains an anti-copy mechanism: product activation.

This feature is supposed to take aim at software piracy, but the truth is it’s just another example of a rapacious monopolist abusing computer users who are helpless to do anything about it. The activation feature means that in the future, you’ll have to pay for every copy of the operating system loaded on every computer you own. Up until now, the company has turned a blind eye to that kind of software duplication. But no more.

Illegal software copying is a legitimate issue for Microsoft. Company records revealed during the antitrust trial that Microsoft’s only competitors are software pirates who distribute copies of its programs.

Outside the United States, enormous factories illegally churn out billions of dollars’ worth of Microsoft products and resell them at a fraction of the company’s price.


The new product-activation technology is supposed to help put the brakes on piracy by making it harder for one copy of the XP operating system to be running on more than one computer.

Here’s an abbreviated summation of how the technology works. When you install XP on your computer, it takes note of the equipment on which it’s running. At some point, XP must check in with Microsoft--usually via an Internet connection--so the serial number on the software can be deposited in a database. If another computer tries to use that same copy of XP, the product-activation feature limits its use until things get cleared up.

The activation technology is designed to be relatively transparent. If you buy a new computer from a retailer, you probably won’t have to go through the process because the retailer will have registered XP when it loaded it onto your machine. Microsoft insists that the activation system doesn’t transmit any information about the computer itself--a claim supported by independent research--so privacy issues aren’t a concern right now.

The problem with the system: It won’t have any significant effect on professional pirates, a fact Allen Nieman, Microsoft’s product manager for licensing technologies, concedes. Pirates probably will crack the security system within moments of XP’s release, allowing the illegal factories to keep on running.


The only folks this is really going to affect are consumers who have more than one computer--such as a desktop and a laptop--and have used one copy of Windows for every computer they own.

This is a violation of the license under which Windows is sold. Technically, Microsoft doesn’t actually sell you software. It sells you the right to use software under certain specifically designated circumstances. Sit down with your lawyer someday and read the license that comes with your Microsoft software. You’ll find all sorts of restrictions on what you can do with it. It’s sort of like buying a book with a label that says you can’t resell it to your brother after you’ve read it.

Book publishers would love to do stuff like that, but legal concepts such as the doctrine of first sale forbid it. Software publishers have skated around such traditions through licensing, which, among other things, prohibits you from reselling video games at a yard sale. Or moving your operating system to a new computer when you upgrade.

Naturally, most consumers have pretty much ignored those restrictions. “That kind of casual copying makes up a substantial portion of the piracy problem, upwards of 50%,” Nieman said. “We hope this will help educate the public in how the product is licensed.”


It’s going to tick off a lot of users, Nieman acknowledged.

Microsoft’s strategy taps into the controversy over licensing software instead of selling it. “There’s some legal question as to whether the end user is agreeing to these relatively unconscionable terms and whether licenses like this are in fact legally enforceable,” said Jennifer S. Granick, director of the legal clinic at Stanford University’s Center for Internet and Society.

Under the license, Microsoft could take consumers to court for copying the software. But why risk a legal defeat when the technology can simply enforce what could be a legally dubious practice without the messy process of getting legal approval?

“Yes, the technology does allow Microsoft to impose product activation on consumers, but that doesn’t make it OK,” Granick said. “And it’s certainly not targeting the professional pirates that we all agree need to be stopped. I can’t understand why they’re mistreating loyal customers.”


Microsoft, under scrutiny for illegal business practices, can’t raise the price of the operating system. Forcing households to buy multiple copies resolves that problem.

Unfortunately, there aren’t many choices in this monopoly operating system market, short of staying with current Windows software and its bugs. Looks like we’ll have to put up with this sort of thing until Microsoft runs out of appeals.