Ethical fair trade - you knew it made sense until MS embraced it

A new take on 'confronting your weaknesses head-on'

By John Lettice, 13th December 2004

Customer Success Testimonial: Recovery is Everything

British consumers have double standards when it comes to ethical purchasing, claims Microsoft. According to YouGov research commissioned by the company, 89 per cent of the population believe themselves to be ethically-driven consumers, buying fair trade coffee and organic produce for example, but nevertheless 43 per cent own goods or material they know to be counterfeit, and 23 per cent have knowingly bought pirate software. Er, so?

We at The Register have been asked to believe some remarkable things by Microsoft in our time, but this one's outstanding. One buys, say, fair trade Nicaraguan coffee because one is concerned about ethics and wishes to support local growers rather than give money to multinational megacorporations, while one buys genuine Microsoft software in order to... Quite. Even if Microsoft did not have a well-documented history as an ethically-challenged company, it's quite a stretch to view Bill Gates and his merry men as poor, oppressed peasant farmers.

Microsoft's error here is particularly exquisite, because it is claiming that the "double standard" exists in relation "to the ownership of ideas [Intellectual Property]". As the application of Western IP law in developing countries leads to interesting effects such as HIV treatment being prohibitively expensive, so people die, just by making the comparison Microsoft is tagging itself as an international megacorporation with a scant grasp of ethics and development issues. But if the company's spin doctors might care to make a belated start, they could begin their researches here, at Make Trade Fair. Uphill work though, as Microsoft supports TRIPS (Trade Related Intellectual Property Rights).

Shall we stop kicking? No, let's not. Microsoft's 'contradictions' announcement goes on to point out that most of the people who owned pirate software felt that UK public services were under funded, and cites a independent research (actually carried out on behalf of the Business Software Alliance by IDC in 2003 - "independent?" ) claiming that a 10 per cent reduction in software piracy in the UK would provide an extra £2.5 billion in government revenue. This could be used, it is claimed, to build nine new hospitals, recruit 113,000 more police or 132,000 more nurses, or it could be thrown away on a brain-dead Government IT project (OK, they don't claim that last one really).

That's as may be, but dimly remembering that there's something a little sharp about Microsoft's European tax affairs, we called the luckless PR people. How much tax does Microsoft pay in the UK? Microsoft does not disclose this. Is it still the case that Microsoft ships the bulk of its European software via its European Operations Centre in Ireland? Yes, Microsoft UK is mainly a marketing operation. So, if the UK population stopped buying pirate Microsoft software and bought the real thing instead, it would be making some small contribution to the er, Irish economy. But not a vast one, because the tax advantages are why Microsoft operates out of Ireland in the first place.

At this point the spokesman protests that the Value Added Tax paid on the software would be contributing to the UK economy. Which it would, up to a point. VAT-registered customers (i.e. most businesses) would however claim the VAT back, and in quite a lot of cases people buying pirate software will also be paying VAT on it. Still, at least there's something about the Microsoft announcement we can agree with. According to Microsoft Ltd (isn't that the one that's the marketing operation?) anti-piracy manager Alex Hilton, the impact "is profound and not only economic but also social." Quite. ®