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However, this data is encrypted during transfer and at-rest in cloud and the key is derived from your password.
For criminals it's easier to break into your PC than into the cloud.
Consequently, software publishers, developers, and vendors are taking serious actions to protect their revenues. Aside from the legal consequences of using pirated software, users of pirated software forfeit some practical benefits as well.
I'm curious to know if there are any hard facts to backup this claim.
There are many anecdotal claims out there on the internet, such as Software Cracks: A Great Way to Infect Your PC, but even the provided stats are vague.
The percentage of malware seems to vary greatly based on distribution - eg P2P like Kazaa and Limewire contain more malware than torrents - and type of pirated software.
Moshchuk et al performed a study were they crawled the web and looked for spyware.
The losses suffered as a result of software piracy directly affect the profitability of the software industry.
Because of the money lost to pirates, publishers have fewer resources to devote to research and development of new products, have less revenue to justify lowering software prices and are forced to pass these costs on to their customers.
For the sake of this question, only pirated software distributed with malware counts, not completely fake software which are actually just malware in disguise trying to trick people to run it.