Beijing’s anti-piracy policies helped reduce the use of pirated software in China last year although 35 per cent of all software installed around the world was illicit.

The Business Software Alliance, a lobby group representing companies such as Microsoft and IBM, said that the industry lost $34bn (€26.6bn, £18bn) last year from the sale of illegal programs, up $1.6bn from 2004, according to data published on Tuesday.

Reductions led by China – where 86 per cent of software installed on computers was still pirated – was offset by increases elsewhere in Asia, the European Union and Latin America. India and Russia recorded progress with decreases of 2 and 4 percentage points respectively.

The US remained the “cleanest” software market with just 21 per cent of its software pirated.

China’s new policies of installing legal software on public sector machines and insisting that new PCs are shipped with pre-installed operating systems were behind the reduction of four percentage points from 90 per cent. It was still the fourth-biggest offender after Vietnam, Zimbabwe and Indonesia.

The BSA said the increase in the EU was mainly driven by southern European countries with large numbers of small businesses – “one of the sectors where we see the highest level of piracy”.

France was “an anomaly” as it had the third-highest losses in dollar terms in spite of a generally low crime rate. Contributory factors were the “rapid uptake in broadband and perhaps an ambivalence towards intellectual property”.

The industry has launched a concerted effort this year to make inroads into the problem. Last week the Software and Industry Information Association filed lawsuits in California alleging that at least three separate users of eBay, the online auction site, had conducted sales of pirated software.

In February the BSA increased cash rewards for tip-offs from $50,000 to up to $200,000. Software developers are also investing heavily in “digital rights management” tools, which make products harder to copy.

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