The High Cost of Free Software

The use of pirated software and shared licenses puts dealers at risk of criminal penalties and cyberattacks.

June 2017, Auto Dealer Today - Feature

by David Gesualdo

David Gesualdo
David Gesualdo

Welcome to a tech-heavy edition of Auto Dealer Today. In our cover story, dealership IT expert Erik Nachbahr offers a list of five pressing issues you must address before completing the acquisition of a dealership. Item No. 1 is software. Simply put, if any store you own or plan to buy is using unlicensed software, you are sitting on a time bomb.

Unlicensed software takes many forms. An employee may download pirated software and install it on one of your machines. They may bring software they purchased at home to use on their work computer. Multiple users can get by with the purchase of a single license if they all use the same login and password. Each of these practices is a violation of the provider’s copyright, and each is illegal.

Perhaps you or your employees view unlicensed software as a victimless crime. I realize Bill Gates won’t go hungry if you steal a copy of Microsoft Office. But nor will he face punishment if you get caught.

It happens every day. The Business Software Alliance sees to it. The BSA enforces software copyrights by going after individuals and businesses that download, share or sell pirated software or install multiple copies of purchased software. The fact that you have never heard of nor been audited by the BSA should not make you feel safe. A disgruntled employee or vendor can rat you out to the agency — confidentially — at

The implications are dire. If your dealership is found to be in violation of the U.S. Copyright Act, the owner can recoup actual damages (the cost of their product) plus attorney’s fees. If they are so inclined, they can even attempt to pursue any profits gained from the use of their software.

According to Nachbahr, one dealer paid a total of $1.5 million to settle charges of using pirated software on 300 computers. Another was fined $50,000 shortly after acquiring a store that had unlicensed software on its computers when the dealer bought it.

Of course, only a slender fraction of the dealer body will ever be subject to a BSA audit. But every dealership that runs on unlicensed software does so with a heightened risk of security issues. An employee who downloads a copy of Photoshop from The Pirate Bay has no way of knowing whether it is infested with spyware, malware, ransomware or viruses. Should your customers’ personal information be breached in a cyberattack, fines leveled by the BSA will be the least of your worries.

I am not an attorney, and no part of this page should be taken as legal counsel. But I urge you to follow Nachbahr’s advice. Conduct a thorough IT assessment of your store and any dealership you may wish to purchase. Failing to do so subjects you, your business and your customers to an unacceptable level of risk. 

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