Safe, Legal Online Shopping Tops Microsoft’s Holiday Wish List

REDMOND, Wash., Dec. 15, 1999 — Today’s holiday shoppers want to know that their online Santa suppliers do not turn out to be the Grinch who stole Christmas. At the height of this year’s busy holiday shopping season — with a record number of shoppers turning to the Internet as a supplement or alternative to trips to the malls — Microsoft is taking steps to ensure consumers understand how to protect themselves from a privacy invasion or software piracy scam as they shop online.

Although online shopping rose exponentially this year and consumers are becoming more accustomed to the world of e-commerce, many e-shopping carts will be left empty at the checkout page because of concern about privacy and security on the Internet.

Such consumer concerns have led Microsoft to work with TRUSTe, the Internet’s leading privacy
“seal”
program, as well as the U.S. Department of Commerce, to issue several safety tips to help consumers protect themselves online.

“As Internet commerce blossoms, it is clear that privacy loss has become the biggest concern for consumers online,”
said Commerce Secretary William Daley.
“Our number one priority is to educate consumers about what to look for — and what to look out — for while on the Internet. Industry initiatives promoting online consumer education and protection bolster consumer confidence and help fulfill the promise of the emerging digital economy.”
Consumers can protect their privacy while they are online with a few simple steps:

  • Reading a Web site’s privacy statement and understanding its contents;

  • Looking for third-party seals, such as TRUSTe or BBBOnline; and

  • Looking for security symbols, such as the “closed lock” symbol on the Web browser, when using credit cards over the Internet.

“When a consumer sees the TRUSTe Privacy Seal, they know that the Web site discloses its privacy practices and that it submits to third party oversight, monitoring and verification,”
said Paula Bruening, Director of Compliance and Policy at TRUSTe.
“If a consumer doesn’t see a privacy statement, they should steer clear of that Web site. Period.”

“Consumer education is of the utmost importance,”
added Bob Herbold, Executive Vice President and Chief Operating Officer at Microsoft.
“We want to make sure we’ve established a trusting environment online and that privacy is maintained as consumers move around the Web. As a result, Microsoft won’t advertise on Web sites that don’t post a comprehensive privacy statement.”

Consumers should first read the privacy statements on the Web sites they visit, Herbold said. These statements should disclose in plain English what personal information the Web site collects and — more importantly — what it does with that information.

Illegal Software Scams

“What looked to be a great deal at an online auction site turned out to be too good to be true.”
These are the words of Denise Flatt of Olympia, Wash., one of the thousands of consumers who unknowingly obtained counterfeit software over the Internet this year.
“I learned my lesson the hard way,”
she said.

Flatt’s situation represents another issue consumers should be aware of this holiday shopping season and beyond — the prevalence of illegal software sold on the Internet. Buyers often believe they are going to receive legitimate and legal software, only to find out that the auction site they’ve perused or the reseller from whom they’ve bought just sold them something unusable.

According to Forrester Research, approximately 8.6 million shoppers will spend $4 billion this holiday season shopping online between Thanksgiving and New Years Day, and software is one of the leading products delivered electronically. The Business Software Alliance, a software industry trade association, estimates that there are 840,000 Internet sites selling illegal software as genuine products.

Another problem many consumers face is that by acquiring illegal software over the Internet, they often never receive the programs they paid for. Others are not able to get their money back if they discover the software they acquired is counterfeit. Disreputable Internet businesses often quickly vanish, leaving behind hundreds of dissatisfied consumers.

“Internet piracy is growing nearly as rapidly as the Internet itself, and it is severely harming consumers and their confidence in feeling safe to conduct legitimate business online,”
said Tim Cranton, corporate attorney in charge of Microsoft’s Internet anti-piracy efforts.
“There is a possibility that this problem could spiral out of control, and we need consumers to help us hold back the floodgates by being knowledgeable online shoppers.”

Understanding the risks involved in potentially illegal software is the first step online buyers must take. The risks that customers face when acquiring counterfeit software include:

  • An increased potential for viruses;

  • Software that may be missing key elements, including software code, which could render the program unusable;

  • Ineligibility for technical support and upgrades; and

  • No warranty protection.

It is also worth noting that software piracy has a significant effect on the economy. By spending money on counterfeit software, customers also are inadvertently contributing to the loss of tax revenue and employment. In 1998, software piracy accounted for losses amounting to nearly $1 billion in taxes and 109,000 jobs in the United States.

Watch for Warning Signs

What warning signs can steer online shoppers away from questionable Web sites and distributors? When dealing with software vendors over the Internet, consumers should beware of the following:

  • Companies or individuals unwilling to verify their identity or full business name or provide a physical street address and telephone number for follow-up after the transaction has occurred.

  • Online distributors unwilling or unable to provide adequate or satisfactory descriptions of their return, service or warranty policies.

  • Online distributors that offer unusual inventory explanations, such as special deals with the software publisher, liquidated inventories or acquisition through bankruptcy sales.

  • Vendors offering software products at prices and in packaging inconsistent with offerings through legitimate retail channels. If the price seems too good to be true, it probably is.

  • Vendors offering original equipment manufacturer (OEM) software alone, without the sale of a new computer. Buying an OEM product separately from a new computer is illegal.

For Microsoft software, software components being sold solely as a CD housed in a jewel case or with a loose end-user license agreement, because these items are not distributed in this form through legitimate channels.

Both Microsoft and public officials agree that warnings are issued not to discourage consumers from using the Internet and conducting their shopping online, but to protect themselves and their families from falling victim to counterfeit software and invasive breaches of privacy.

“By working with advocacy groups, government and all interest parties to identify the issues, we are developing best practices for addressing them,”
said Microsoft’s Herbold.
“One of the beauties of e-commerce is that you can shop in your slippers in the privacy and comfort of your own home. We want to continue to facilitate and establish a trusting environment online that is safe for both legitimate buyers and sellers. We want robust online activity to extend well beyond December.”

Customers or resellers with questions about the legitimacy of Microsoft software should contact the Microsoft anti-piracy hot line, toll free, at (800) RU-LEGIT (785-3448) or send e-mail to piracy@microsoft.com .

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