The Sydney Morning Herald has reported that Microsoft-owned website Cudo, was selling a 4GB ebook reader this week for $99 (Australian) – The Chinese-made device came with a CD preloaded with 4,000 books, most of which were pirated. Some of the pirated titles were the entire Harry Potter and Lord of the Rings series. The Cudo e-reader deal has ended, after 2,317 of the devices were sold.

Cudo claims the none of the devices sold were actually shipped with the pirated books, all of which were initially listed on Cudo’s site. Cudo took this list down, but it can still be viewed in Google’s cache.

Australian Booksellers Association chief executive Joel Becker stated, “it’s extraordinary … there’s piracy taking place on a grand scale. It’s deeply concerning to see Channel Nine and Microsoft involved … two organisations where copyright protection is a major issue to them.” Cudo is a joint venture between Microsoft and NineMSN, one of Australia’s most popular websites. Customers who bought the package were contacted and offered a “higher specification e-book reader,” according to Cudo CEO Mike Sneesby. He added, “despite the merchant’s assurances that the offer complies with all relevant Australian laws, including copyright laws, our assessment of the 4,000 e-book titles determined that this may not be the case.”

Interestingly, Microsoft is often embroiled in various copyright lawsuits, and sued Barnes and Noble over it’s Nook reader last March.