Piracy Problems in Hong Kong

Government Policies
Much of Hong Kong's success has been attributed to its policy of positive non-interventionism. Under this policy, investment in original research and development is always left in the private sector. In the absence of giant multinationals to fund research, the inevitable outcome of the policy of non-intervention is low level of creativity and pervasiveness of copying from others (Ho, 1995).

However, government effort to combat piracy started a new page in the late 1990s. An anti-piracy task force was set up in the Customs and Excise Department in 1999 to make piracy-related arrests; the courts began imposing longer jail terms for violation of copyright ordinance; the Legislative Council reclassified piracy under Hong Kong's Organized and Serious Crime Ordinance in 2000.

Attitudes of Software Manufacturers
Marketing strategies of software manufacturers and pricing policies of their software also contribute to the piracy in Hong Kong. It was argued that piracy was partly a result of software manufacturers' strategic calculation. Some software manufacturers realized that they could not gain a significant amount of business even if all pirated material was non-existent. They therefore allowed piracy to exist in the hope that their software would be widely used and become a necessity in many organizations. By the time this happened, they would take action to combat piracy and gain profit as the users had to rely on them to supply legitimate copies. On the other hand, retailing prices of the same legitimate software in USA was 20% lower than that in Hong Kong. The huge gap between the retailing prices of legitimate copies and pirated copies led to a greater incentive for people to buy pirated copies (Ho, 1995).

Lack of Localized Software Industry
Hong Kong does not have its own software producing industry. As they are not the ones to suffer from software piracy, many Hong Kong people do not have the incentive to protect IP. This is contrary to its fight against piracy of Cantonese pop music. Hong Kong had a prosperous record industry in which millions of locally produced compact discs were sold each year. With the influx of counterfeit compact discs, many of the local record companies united together to launch various advertising campaigns to raise public awareness (Ho, 1995).