Criminal gangs are increasing taking advantage of the internet to peddle counterfeit software, say experts.

According to an investigator for the trade body, the Business Software Alliance (BSA), criminals hawking counterfeit or cracked software are tapping into the e-commerce potential of the net.

The internet helps the software pirates reach a much bigger pool of customers; it boosts profits because the code can just be downloaded instead of burned on to a CD; it is also cheap and easy to set up so-called warez sites.

Moreover, the chances of being caught are pretty low. It all adds up to a serious problem for those tackling the selling and pirating of software online.

It is an issue acknowledged by the BSA investigator, known only as Mr X. He has to keep his identity secret so he can do his job effectively and avoid the real threats of harm he regularly receives.

"It's getting harder," he says. "Organised crime has definitely picked up on this trend."

Faking it

There is no doubt that many of those peddling pirated programs are from organised crime gangs, said Mr X.

Recent raids on pirates have turned up bundles of cash, fake driving licences and passports as well as counterfeit software.

And it is not just the experienced criminals that are using web technology to distribute the pirated warez.

Some pirates are using peer-to-peer software such as BitTorrent to share the load of downloading what can be very big programs.

They use sophisticated techniques such as Distributed Hash Tables to make it more difficult to track down where the files are held.

Others have turned to older systems such as Usenet and label files using the NZB format to make sure that downloaders pick up all the different parts of the program they are after.

Software and entertainment products were the second most counterfeited category of goods according to a report released in late July by Canada's Gieschen Consultancy.

For the first time, the names of Microsoft and Adobe joined those of Prada, Adidas and Nike in the names of the top 10 most counterfeited brands.

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