Don't pass this along

WE THINK NOTHING of passing along a book or video we've enjoyed to a friend, but what about a software CD? In the case of Intuit's TurboTax, at least, you'd better think twice.

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The Gripe Line has been buzzing with complaints from readers about the product-activation scheme Intuit has implemented in this year's version of TurboTax. "Basically the program must be installed on the computer that you will eventually complete your taxes on," wrote one reader. "I have several computers that I work on, and I am constantly upgrading several at any one time. When I asked Intuit about this, they told me I needed to purchase another license to install when it comes time to print."

Many readers pointed out various problems they might have due to being restricted to printing or electronically filing their tax returns from the same computer on which they first activated the program. Those who were planning to buy a new computer before they were ready to file, or those who didn't install the program on the computer they must use to file, struggled to get answers from Intuit as to what they should do. Longer term, many wondered how easy it would be to carry over data in subsequent years or to file amended tax returns after the computer system they'd used TurboTax on was long gone.

Even more distressing was the discovery by some users that the product activation software Intuit is using -- based on Macrovision's Safecast technology -- remains active even when TurboTax is not in use. "There was no mention made of software other than TurboTax being installed, especially not of things that would run anytime my computer was running, even after TurboTax was uninstalled! Yet, they installed software that does just that, and who knows what else. As an individual, I feel that, in a way, my computer has been vandalized. After all, software was installed without my knowledge -- and therefore without my consent -- that is using my electricity, CPU cycles, network bandwidth, and not least of all, [is] irritating me."

Intuit says it knew that some users would be upset with the product activation system, although I get the feeling Intuit officials didn't anticipate quite the firestorm the system has produced. "Sure, there's going to be a certain percentage who switch, but we think most customers will have no trouble with it," says Scott Gulbransen, Intuit corporate communications manager. Gulbransen emphasizes that the Safecast technology employed in TurboTax collects no personal or system information, displays no ads, and makes no Internet communications beyond those required for activation. (Macrovision officials confirm this, adding that their software has to remain active in order to work properly with Windows XP.) "It is not spyware, as some on the Internet are saying," Gulbransen says. "We don't collect any personally identifiable information at all, and we can't look at the configuration of your hardware. The program doesn't chew up system resources at all, and it can be uninstalled when you wish."

Gulbransen acknowledges that some customers may be forced to reactivate, but he believes most will understand the necessity. "In doing this, we're just trying to make sure the product is used in compliance with our license agreement, which has always said you should use it on a single computer," he says. "What it really does is prevent unauthorized pass-along of the CD, and one of the good things about the technology we're using is you can still give the CD to a friend and they can try it out on a trial basis. When they're ready to file their return, they just have to buy their own activation code. It's not that we consider pass-alongs to be piracy -- we know most people do so with good intentions."

Do you notice Intuit has a somewhat ambivalent attitude toward pass-alongs here, as if they want to both encourage it and discourage it at the same time? Why not just have a Microsoft-like product activation scheme that can't be used on another computer at all?

The answer of course is that Intuit is trying to have its cake and eat it too. The nature of tax software is that the customer who uses a program he borrows from a friend this year is a likely prospect to buy that same program next year, and Intuit doesn't want to lose that marketing opportunity. But now, rather having to wait a year to cash in, Intuit hopes to make that friend pay up as April 15 looms. Very neat.

Perhaps the TurboTax product activation scheme isn't spyware, but does that mean customers have no right to be upset with it? Absolutely not. Whether Intuit is choosing to collect personal information with it or not, it's still registerware in my book. Customers are still being limited in their usage of the product for reasons that have a lot to do with marketing and little to do with piracy. In my humble opinion, no software publisher should have the right to do that, any more than a book or video publisher has the right to keep you from passing its product on to a friend when you're finished with it.

It will be interesting to watch this situation during the next year, because I think it will provide us with the best test yet of whether or not software publishers can indeed force registerware down customers' throats. Microsoft's product activation was reluctantly accepted because most felt they had no alternative. And although Intuit has a dominant share of the tax software market, it has clearly opened the door to competitors with this move.

This year's TurboTax customers should recognize that they wouldn't be doing their friends any favors by passing along Intuit's booby-trapped CD. And next year let's hope they can find a tax program that will allow them fair use of the product they buy.