Computer piracy is the unauthorized use of copyrighted software. Copying music for a friend, downloading a commercially licensed program from the Internet without purchasing it and even using software in a way that violates the End User License Agreement are all forms of computer piracy. The use of piracy to disseminate intellectual property does severe harm to the economy; it also undermines several free market principles.
Cost & Value
Usually, electronic piracy takes the form of an individual downloading intellectual property from the Internet, and then redistributing it to other individuals at no cost to the downloading party. This lowers the real value of the information by increasing the supply. Although the real value drops, the absolute cost to the owner of the copyright has not changed. The relative cost has increased. This results in a loss of revenue to the copyright holder, who might not have as much incentive to create additional products.
The United States prides itself on maintaining a free market system, which allows the market to determine the real market value of any individual product or service. Piracy circumvents the free market system by taking valuable information from the market and lowering its value without regard to current market conditions. This results in an unexpected and unnatural drop in the real market value of the legitimate product. This loss in market value causes the investment in that producer to lose value; in-turn, the market as a whole loses value equal or greater to the value lost by the copyright holder. Simply put, piracy contributes to market contraction.
Computer piracy is intellectual property theft, which is a criminal offence. If charged with one of the many forms of computer piracy by the Federal Bureau of Investigation at the request of the copyright holder, the indictment must be taken before a court of law. Each of these cases requires the time of hundreds of individuals. Because of this lost time, alleged computer piracy crimes place a strain on the judicial system, which could otherwise be investigating and prosecuting other, more serious crimes.
Piracy also has negative effects on the user participating in the theft. Pirated software, music and movies are often of inferior quality. Additionally, the use of pirated information is frequently used as a way to spread computer viruses. Illicit software can be easily modified to contain harmful computer code. Downloading and using the pirated software can result in the corruption or loss of data on your computer, identity theft, personal liability for criminal activity, and even financial loss due to lawsuits or fraud.