Piracy has been with us ever since the early days, but four years ago there was widespread attention given to a different type of illegal software - counterfeit. The difference, in a nutshell, is that pirated software makes no pretence at being anything other than what it is - a cheap copy, usually on a gold disc, with no sleeve, case or instructions. A counterfeit item of software, on the other hand, can look identical to the real thing, coming on a silver CD, with packaging and printed materials so similar to the genuine article that only a trained eye can spot the differences. Even then, it usually requires a genuine item to be compared with, side by side, so the differences become apparent - not quite the right shade of red on the box, for instance.

Four years ago this week, Microsoft announced that they were instigating a crackdown on retailers who were selling OEM (Original Equipment Manufacturer) versions of their software at bargain prices. 'Why?' we all asked. 'Surely software, especially an OS, should be sourced by the retailer as cheaply as he can find it, just like every other item he sells?' If you were a retailer and supplier A was offering you Windows 95 at £63 and supplier B was only charging £48, who would you buy from? Particularly if you were buying dozens of copies each week to accompany every PC you were building? Microsoft corporately shook their heads and Paul Tollet, the company's Consumer Business Manager, explained, "I can guarantee you that at least 95% of this software is fake."

We gasped in astonishment. Whether that figure was true or not, the pieces all suddenly fell into place. Microsoft only supplied five wholesalers with their product, and all sold to retailers at the same (high) price. Dealers who bought from any other source, and there were hundreds, were probably buying 'grey' imports and saving between £10 and £15 a copy. But, according to Microsoft, 95% of these 'greys' were counterfeit, hence the crackdown. If the price difference had been larger, say £30, then most retailers would have probably smelled a rat and left it alone, but a smallish difference didn't arouse dealers' suspicions, and gave the counterfeiters a much higher profit margin too.