Posted by Brad Smith
Executive Vice President & General Counsel, Microsoft

The National Association of Attorneys General (NAAG) today announced that 39 attorneys general, representing both parties and from states across the nation including Washington, North Carolina, Massachusetts, Texas, Michigan, Florida, Colorado and Illinois, sent a letter to the U.S. Federal Trade Commissioners affirming their commitment to use their existing state powers, and calling for stronger federal enforcement against companies around the world that use stolen information technology to gain an unfair business advantage and who seek to sell their products in the U.S. The 39 attorneys general represent 36 US states and three US territories: Guam, Puerto Rico, and the Virgin Islands.

The letter clearly highlights the impact of the issue and the resolve of the attorneys general to tackle it directly, while also calling for additional state and federal action. As the letter says, “Competition is unfairly distorted…when a manufacturer gains a cost advantage by using stolen information technology. It offends our sense of fairness when such wrongdoers reap a commercial advantage from their illegal acts.”

Microsoft wholeheartedly supports the attorneys general in their effort to create a level playing field around the world for companies to compete fairly. Bold moves like this - to protect jobs, improve the economy and protect companies both in the U.S. and overseas that play fair - will drive economic growth and spur innovation for everyone.

Using stolen IT gives companies an unfair advantage over companies that obtain their IT legally. In some countries, the piracy rates are as high as 80 percent or 90 percent. This has a real impact on the U.S. and other economies – most visibly in the manufacturing sector, where in the U.S., 2 million jobs have been lost between 2001 and 2008, often to lower cost competitors.

Microsoft believes that fair competition and respect for intellectual property drives innovation and local job creation around the world. According to a recent Business Software Alliance (BSA) study, a 10 percent reduction in global piracy rates over four years would create $142 billion in new economic activity while adding nearly 500,000 new high-tech jobs.

But we do not have to just look at forecasts. We see concrete evidence now that laws aimed at leveling the playing field are working. For example, there are new U.S. state laws in Washington and Louisiana that promote fair competition. We are seeing success already from these laws in which companies are doing the right thing, and switching to legal software. Additional laws and regulations will only strengthen and accelerate the process toward legalization and a level playing field.

While calling for the FTC to take action, the bi-partisan group of state attorneys general have also committed themselves to stepping up enforcement of existing state laws which can help tackle stolen IT and enable fair competition. Today’s letter from 39 state attorneys general clearly demonstrates how seriously governments in the U.S. take this issue and their strong resolve to take action.

We applaud the attorneys general and NAAG for their bold move to address software piracy, for their ongoing efforts to create a level playing field for business, and their efforts to spur job creation and economic growth.