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Cablegate: US Embassy Changes Saudi Laws and Practices for Microsoft, Helps Shut Down Saudi Stores

Posted in America, Microsoft at 3:53 pm by Dr. Roy Schestowitz


Summary: A demonstration of how — with help from the US government — Microsoft was able to influence affairs overseas and also raid shops that spread Microsoft products

THIS morning we showed a few cables from Saudi Arabia. Microsoft was trying to change laws and practices there, in order of course to better accommodate Microsoft’s profit model, not to help Saudi citizens. Well, this leaning on the government — helped by US officials — seems to have paid off. We’ve just found another Cablegate cable from exactly 2 years ago. It shows the role of the BSA behind the scenes too:

DE RUEHRH #1202/01 2571429
P 141429Z SEP 09
E.O. 12958: N/A 
SUBJECT: Microsoft and Saudi leaders cite progress on IPR 
Ref: Jeddah 297 
1. (SBU) Summary:  The Saudi Ministry of Culture continues to make 
progress working through a backlog of cases of suspected copyright 
violators.  The Ministry reports it has closed several stores for 
brief periods until they resolve copyright violations.  It plans for 
the first time to refer a repeat offender to the Board of 
Grievances.  The Ministry supports greater public relations efforts 
to increase awareness of IPR issues, and it is willing to work with 
industry on training and awareness campaigns.  Meanwhile, local 
Microsoft representatives tell us they have seen the Saudi 
government show improvement in both attitude and enforcement, and 
they confirmed to us that one computer store has been closed for IPR 
violations.  The company remains willing to work with Saudi 
ministries to provide training and increase awareness, although they 
still say enforcement  could be stronger, including within the SAG. 
End summary. 
Microsoft exec:  Saudi record on IPR has improved... 
--------------------------------------------- ------- 
2. (SBU) On September 8, Fernando De Sousa, Microsoft's chief 
operating officer in Saudi Arabia, paid a farewell call on Charge 
Ambassador Erdman, thanking him for the Embassy's strong support on 
IPR issues.  The Ambassador briefed De Sousa on his recent 
conversations with Minister of Commerce and Industry Abdullah Zainal 
Alireza (reftel), in which the Minister reiterated Saudi Arabia's 
commitment to fulfill all of its WTO commitments to protect 
intellectual property.  The Minister had said he welcomed the 
interest of companies like Microsoft in supporting SAG enforcement 
efforts, including through training.  Econ Counselor also briefed 
the Microsoft team on recent conversations with Assistant Deputy 
Culture Minister for Internal Information Abdulrahman Al-Hazzaa, who 
also welcomed cooperation with Microsoft and other companies on 
training and public awareness campaigns.
3. (SBU) Hazzaa reported that the Ministry of Culture and 
Information is processing the backlog of IPR enforcement cases that 
had been awaiting review by the violations review committee, 
finishing an average of 7 a week, and on track to finish reviewing 
all old cases by the end of September (the committee was meeting in 
the adjoining room while Econoffs called on Hazzaa).  Hazzaa said 
that this will allow the committee to focus on bringing new cases 
from inspectors, which will help improve awareness of enforcement 
efforts.  Hazzaa reported that, as a result of the committee's 
reviews, several shops have been closed with the posting of large 
public notices explaining why until the owners come and settle their 
fines with the Ministry.  The point, according to Hazzaa, is to 
impress upon store owners that they cannot sell pirated goods with 
impunity.  (Microsoft reps separately confirmed they are aware of 
one computer store having been closed down and said that closures 
may help stores selling legitimate software compete if enforcement 
is seen as more pervasive.)  Hazzaa also reported that increased 
Ministry inspections and enforcement efforts have disrupted the 
ability of black market vendors to sell a range of pirated products. 
 Econoffs have observed a reduction in the public sale of pirated 
software and other items, like movies, over the last year. 
Microsoft representatives agree that there has been some reduction 
in street-level sales, although they believe stores in malls 
continue to sell pirated software. 
4. (SBU) Hazzaa also reported that the committee had found one 
commercial entity had engaged in so many violations that the 
committee has recommended, for the first time, that the case be sent 
to the Board of Grievances with a recommended fine of SR 100,000. 
He explained that the Minister of Culture and Information will have 
to approve this referral, and he promised to push hard for this 
approval, noting that this will send an important message to the 
Saudi public and business owners that the Ministry is serious about 
enforcing copyright laws. 
... and the issue now is sustainment 
5. (SBU) De Sousa told the Ambassador that there has been 
improvement in IPR copyright protection in the last several years, 
although he said the issue now is to make this improvement 
sustainable.  He also stressed Microsoft's willingness to support 
efforts by the Ministries of Culture and Commerce to publicize 
enforcement efforts and assist public campaigns to raise awareness 
of IPR issues. 
6. (SBU) Despite the improvement in the overall climate, De Souza 
noted that problems remain.  He noted that Microsoft has discovered 
a software activation key licensed to the Ministry of Interior has 
been used in Pakistan and other south Asian countries to attempt to 
register product upgrades.  The Ambassador suggested that Microsoft 
work with the Business Software Alliance and other companies to come 
up with a white paper listing specific problems on which it would be 
RIYADH 00001202  002 OF 002 
useful to have greater cooperation with the SAG, including the 
Ministry of Interior. 
7. (SBU) Comment:  The Embassy will continue to work with the 
Ministries of Culture and Commerce and with industry representatives 
to foster agreement on a public relations campaign to increase 
awareness about IPR issues.  We will also continue to support 
industry offers to provide training to SAG inspectors, and efforts 
to achieve SAG support to allow an audit of its own software to 
ensure it does not exceed its existing license requirements.  End 

As one of our readers put it earlier today, “More and more, governments act as butlers for big companies.”

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