Q&A: BSA’s informant fee hike is a money-maker, says attorney

The Business Software Alliance has upped the ante to $200,000 for qualified software piracy leads

By Thomas Hoffman

March 8, 2006 12:00 PM ET

Computerworld - The Business Software Alliance last week increased its cash reward for qualified software piracy leads from $50,000 to up to $200,000. When the BSA announced the change, its director of enforcement, Jenny Blank, said in a statement that the increase reflected BSA’s plans to escalate its fight against software piracy.

But attorney Robert Scott views it differently. Scott, who is managing director of Scott & Scott LLP, a Dallas-based law firm, believes the BSA upped the ante to line its own pockets. Computerworld’s Thomas Hoffman spoke to Scott yesterday about the BSA’s latest move and its anticipated impact on IT managers and corporate software customers.


Robert Scott, managing director of Scott & Scott LLP

Why do you think the BSA upped the ante for software piracy information? I think the basic problem is that in order to generate revenue for its own operations, BSA is driving more enforcement money.... BSA keeps all of the money it generates from enforcement. None of the money goes back to the members.

Do you expect this to result in more whistle-blowing? Yes. Basic economics suggest that when you put these types of incentives in place, a rise in legitimate and illegitimate leads will increase. For the salaries that these IT folks make, $200,000 is a lot of money.

That’s why I think there’s a huge potential for abuse. My clients tell me that the very people they thought were handling compliance for them were the same people they’re sure turned them in.

So do you expect more software piracy settlements to be reached between corporate software customers and the BSA? Unquestionably. The net effect of this is a substantial increase in audits and a corresponding increase in settlements and a corresponding increase in revenues for BSA. They’re paying [informants] a percentage of what they recover. It’s a sliding scale based on what’s recovered in the investigation. It was up to $50,000 on a sliding scale, and it’s now up to $200,000 on a sliding scale. But they’re not going to be paying $200,000 unless they discover something substantially north of that.

What does this mean for corporate IT managers? I think corporate IT managers have to embrace the fact that software compliance is a part of their jobs and they have to deal with this proactively or wait until the inevitable and be caught off guard. How they’re measured by their performance dictates what camp they fall in. No one ever got fired for taking care of the issues they were supposed to take care of.

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