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Nah, if the company completely ignored piracy it would increase even further.

The fact that people know the Company is looking for pirates like these, and that there are harsh consequences, prevents a lot of more ethical people from pirating. While there will always be pirates, enforcing their policy will keep it contained.

It's kind of like robbery, if people knew the police didn't care if you robbed a store, I guarantee you robberies would skyrocket, but the fact that it is enforced keeps a lot of people at bay. Now while there will always be robbers, the law will keep it contained.