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Original Equipment Manufacturer Unbundling (OEM Unbundling)

Definition - What does Original Equipment Manufacturer Unbundling (OEM Unbundling) mean?

Original equipment manufacturer unbundling (OEM unbundling) involves dissembling the major components of the bundled software that usually accompanies OEM hardware.

Software can be sold in conjunction with hardware. When it is, a notification to the consumer or retailer is present (a user license), explaining that the software is only to be used with the packaged hardware. Of course, the software may be installed on other machines, but this is a form of software piracy.

OEM unbundling may also be known as softlifting, although this term refers to a wider range of activities.

Techopedia explains Original Equipment Manufacturer Unbundling (OEM Unbundling)

Original equipment manufacturers often sell equipment that comes with bundled software. Unbundling is illegal as it is an unauthorized use of the software according to the distribution license of the OEM equipment.

Once such software is installed on a different hardware or system (other than that with which it was bundled as a package), it is considered an act of piracy. OEM unbundling can take place either at the OEM level or at the retail level. The act of OEM unbundling fully disregards the legal ramifications of using unauthorized digital software.

OEM unbundling is also considered illegal when retailers sell standalone products designed to be sold together. In the United States, OEM unbundling can lead to jail time of up to five years and/or a $150,000 civil penalty fine. Without a prison sentence, the fine may as high as $250,000.

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