Small businesses ‘paying the price for using unlicensed software’

Posted 21st April 2017 in For Businesses For Workers

Small company owners have been reminded of the potentially significant financial implications that can result from the use of unlicensed software.

A new report from BSA – The Software Alliance has indicated that in 2016, small and medium-sized enterprises (SMEs) in the UK had to pay out £914,587 in damages and fees – including the cost of acquiring new software to become compliant – after being caught out using an unlicensed program for commercial purposes.

This represents a significant increase from £770,192 in 2015, with the highest individual settlement costing one particular business a significant £84,300. Sales and distribution firms were the more prevalent offenders, with engineering, architectural and design and manufacturing companies also found to be frequently flouting the law.

The report also showed that the current rate of unlicensed software use in the UK is 22 per cent, which represents a two percentage point drop since 2014, but indicates that around one-fifth of companies are still falling short on this key issue of legal compliance.

It was also noted that in real terms, the costs of being caught out using illegal software is likely to be higher than the numbers given here, which only represent the amount paid out as a direct result of BSA legal actions.

The real cost may also include legal bills and indirect expenses, such as disruptions to business operations and the impact on cash flow when having to make unplanned software purchases.

Sarah Coombes, managing director of the BSA in Europe, the Middle East and Africa, said: “It’s concerning to see that unlicensed software is still costing small businesses hundreds of thousands of pounds every year.

“Despite the rate of unlicensed software in the UK dropping, it’s clear some businesses are continuing to ignore copyright law, leading to greater settlements and legalisation costs.”

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