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Microsoft, Best Buy Face Racketeering Suit
15 judges of the 9th Circuit Court of Appeals have unanimously reversed dismissal of a RICO class action suit against Microsoft and Best Buy, which claims the companies engaged in fraud in promoting Microsoft's MSN online service. (RICO is a statute originally intended to help prosecutors go after organized crime.) Quoting: "The case started after James Odom bought a PC-based laptop at a Contra Costa County Best Buy store. Data about the purchase was sent to Microsoft as part of a joint marketing agreement between the companies. Microsoft then signed Mr. Odom up for its MSN Internet service and, after a free trial period, began billing him for it." Howard Bashman's How Appealing blog has more details on the reversal, including a paraphrase from one of the appellate judges that "all blame rests with the U.S. Supreme Court for allowing the 'outlandish' result that a claim such as this can be pursued under RICO."
If the accusations of signing people up without their consent is true, both companies should be judicially raped for it.
http://www.fbi.gov/wanted/topten/fugitives/bulger. htm
While it wasn't prosecuted under RICO, there have been similar issues with a number of adult website memberships. "Sign up for this for free, the credit card is for age verification only." Three days later, they bill you for a "recurring membership" for their affiliate sites that are just this side of impossible to opt out of. (This happened to a client-- I don't pay for my porn.)
In fairness, you kinda expect this from the seedier side of the web.
You don't expect it from Best Buy and the largest software company on the planet.
Since Bashman is talking about that subset of those 15 judges that originally dismissed the case, maybe it's a concurring opinion from the original hearing, rather than from the current reversal?
Sheesh, evil *and* a jerk. -- Jade
I have no idea how this particular issue will play out, but this court has had many decisions overturned, for reasons spelled out in the Wiki reference.
Dear kdawson, arbitraryaardvark We sure hope you have health insurance... and that it covers broken legs. - The slashdot community
Nature journal lied in Britannica vs Wikipedia Ask to retrac
.... what to expect of their lifespan.
When you have to resort to dishonest tactics as stealing, you don't have much time left.
I went into a best buy just yesterday and noted the prices for computer related products was a good bit higher than Micro Center and that their DVD movies are also higher priced than I can find elsewhere locally.
Best buy isn't a best buy anymore and Microsoft, long known to be aggressive marketing with stepping over the legal and moral fence in a calculated manner should never steal in such a manner as this article indicates... unless they really are hurting. So they did it in at least two different ways.....but where else are they proping themselves up in a financial paperwork appearance?
Ever wonder what assets vs. debt would be if MS had to liquidate? A million on paper can convert to a penny in liquidated into hard cash. Oh but you have stock holders...... and that is the real point.
Neither Microsoft nor Best Buy has the best of track records with treating their customers with honesty. Best Buy's alleged bait and switch internal website and the multitude of Microsoft failings with their customers (Windows Genuine "Advantage" and the Vista/IPod issues come to mind immediately) put both corporations at a definite disadvantage as far as character goes. The fact that they have now been accused of working together to try to boost their respective profits through questionable and/or possibly illegal practices should not surprise anybody. Innocent until proven guilty, but talk about starting with one strike against them...
Starting next week, all passwords will be entered in Morse code
It may have something to do with the fact that you're knowingly providing your credit card information to AOL when you sign up. By doing business with BestBuy, you don't expect to be entering into a business relationship with Microsoft.
Not to punish promotion of multi-colored butterflies. Microsoft should be broken up into several companies and barred from anti-competitive practices. But this doesn't make any more sense than punishing P2P downloaders under laws passed to fight actual maritime pirates.
And then took all my karma.
Do not try to read the dupe, thats impossible. Instead, only try to realize the truth
What truth?
There is no dupe
I work at a Canadian telecom. I am aware that some portions of the company (door-to-door and Telemarketing, all contractors) will blatantly misrepresent our products and deals to fill their pockets. I think the guys isn't a victim so much of big business as he is of a sales guy who misrepresented things. In the big picture neither MS nor Best Buy would benefit from the pittance the guy would have paid for the service but the sales guy probably got 5 bucks and does it a lot.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
Yep, I worked for Best Buy for quite a long time and I know this was never a corporate policy (hardly anything the stores do is corporate policy. This protects corporate from being blamed on our horrendous practices while allowing us to meet their unrealistic expectations).
First, they expected us to sign up approximately 50-75% of all PC purchases with MSN accounts. My store trended about 15-20%... So our management took some advice they heard on a higher level... It's free, it comes with the PC. We were able to boost our numbers to about 50% attachment by not explaining what was happening during the process. We didn't explain it was a free trial, we didn't explain they had to cancel, we helped speed them through the process and I even witnessed some people using the touchpad for the customers to accept the agreements.
This was an INCREDIBLY dirty practice and why have such animosity towards Best Buy.
The last time I forced customers to setup with this was a memorable occasion. A semi-intelligent customer realizes I had just set him up with something that he did not want. I confused him by rushing him through the process, what I was shown and instructed to do. After the transaction was over, he saw the agreement on the receipt and was furious. He requested a manager, which I went and got. As I explained the situation to the manager, they were like 'oh crap' and then told me what I'm about to do I have to do infront of the customer but no this is just a front for the customer. The manager gets to the GeekSquad area, the customer explains the situation, the manager begins to apologize and blame the entire thing on me and not being experience, ignorant, etc. So basically the customer thought I was an idiot and I tried to screw him over. So the company saved face on my expense. After the customer left, the manager apologized again for what he had to do, but it couldn't be revealed this was actually what we were supposed to do. From that point forward, I never pressured anybody into any contracts and management did not like that. However, they let it slide because I would explain what had happened before and my sales were so strong on everything else, they couldn't really fault me. I received the store MVP award for approximately 2 years straight (every month, every quarter).
So yea, fook best buy and their dirty as practices. It's never corporate, but the managers that don't meant their goals will likely be fired within a few months. So stores do everything they can to keep their management employed. Fooked up system right? Oh and did I tell you that the stores compete against each other on goals, so half of the company is always in the dog house. Half of the management is always on alert that they could be fired or replaced shortly. They pull out all the tricks to stay in the top half.
Something doesn't sound right about this.
BestBuy doesn't even sign people up for MSN AFAIK. They'll sign you up for AOL, PeoplePC, NetZero, etc. They can only sign you up through the registers and only for the services with the "free" discs that are available in the store and that have a UPC. They scan the UPC and enter in your information & at some point you have to swipe the credit you want to bill.
I don't believe they even have MSN CDs or at least not that I have ever seen. I'd call some BestBuy's and find out. I'm certainly not "pro" BestBuy, but this is far fetched. Sounds like some confused customers to me.
Supreme Court rejects case.
Appeals court reinstates case.
Reason? Quote: "all blame rests with the U.S. Supreme Court for allowing the 'outlandish' result that a claim such as this CAN be pursued under RICO." (emphasis mine)
Shouldn't that be CAN'T? If not, the sentence would mean that the Supreme Court AGREES that it can be pursued under RICO, so...
Could someone please tell a confused Wabbit Wabbit what he's missing here???
Nothing is inexplicable; only unexplained -Tom Baker, Doctor Who
I wonder if this will be able to traslate into companies that "trick" people into buying ringtones and other crap for their phones, by charging them through their phone bills. If you give you credit card info to Sprint you don't expect to paying out to BlingFone inc.
We are all just people.
In Soviet Russia, you sign up for servi.... waait. Suddenly, Russia isn't looking too bad. ;-)
You can have only two of the following three qualities when developing a product: cheap, fast or good.
RICO actually stands for:
Racketeer Influenced and Corrupt Organizations Act
according to Wikipedia Racketeering is:
(no, I'm not making that up)
Sound like any large software company we might all be familiar with?
I never thought of Bill Gates as just a non-violent, really smart version of Tony Soprano.. but damned if it doesn't fit.
AccountKiller
*Sigh* I'm already boycotting Microsoft (Mac user), Sony (rootkit), and Wal-Mart. Now I have to add another company to the list. What sucks is that they own futureshop.ca, where I go to buy a lot of electronics, video games, etc. I can't do business with either anymore.
This space left intentionally blank.
the credit card is for age verification only."
Yeap, that's the hook, the cc is for verification only. But only for the three free days. Read such free offers and they'll say if you don't cancel at the end of the 3 days then they'll bill your cc. However many won't cancel. What some may not know though is that the cc holder can dispute the charges. And some merchant bankers or credit card verifiers will drop a client who has too many chargebacks.
FalconShould there be a Law?
He took it to court? He should have handled it in the Contra Best Buy store itself, all it would have taken is... UP UP DOWN DOWN LEFT RIGHT LEFT RIGHT B A
It is Microsoft's business model to force you to buy crap you don't want and have no choice in, so business as usual.
My little Linux and tech blog
Silverman and his group (Rymer, Tallman, Rawlinson, and Bea) have their collective heads up their arses. They suggest that they can't see any sort of enterprise in the complaint. In the complaint, it is alleged that one partner would get the credit card info and send it to the other to process and bill. If two corprorations working together to this end - and even memorializing the arrangement contractually- doesn't comprise an "enterprise", good heavens what does? With these guys making decisions, it's no wonder the ninth circuit has so many of their decisions reversed. I'm just glad that enough other justices were on the panel with heads on their shoulders to make the correct decision. If this had been remanded solely because the complainants should have been able to amend to "correct" his mistake, it would have been substantially harder for them to prove their case. I mean, how much more evidence of an enterprise can you actually get? If these were solely criminal organizations, they wouldn't even have had contracts to memorialize their arrangements (at least not contracts like the legal system thinks of the term). What was Silverman thinking?
Poor Bybee was sour grapes too.
RICO was originally designed to deal with organized crime ala the Mafia. The problem is it has many times been abused to attack corporations who run afoul of the law. Many companies are completely unprepared for the realities of RICO because it's not something that would normally apply to them. RICO had a noble purpose, but the language of it is so broad, and supported by SCOTUS, that it's a danger to any company.
Here's a quick example. Let's suppose a small conservative town in Texas decides that something like FHM magazine is "obscene" and inappropriate for kids. They pass an ordinance saying so. The next day, the cops come in and close down a local 7-11 for selling FHM, takes 'em to court, and they're found guilty. Southland Corporation decides not to fight on free speech grounds and pays the fine or whatever. They make sure not to sell the magazine in that town anymore. Remember, SCOTUS says obscenity is defined by local community standards, so this is entirely legal.
Then a small town in, say, Oklahoma does the same thing to another 7-11. Ding! RICO kicks in. Suddenly, Southland is engaged in a racketeering pattern of behavior. The fact that the two violations were unintnetional or unrelated doesn't matter. Okay, so what's the big deal? The big deal is that under RICO, the entire assets of the Southland corporation can be seized. And sold. BEFORE TRIAL. WITHOUT ANY RECOURSE. Every 7-11 in America can literally cease operation overnight because two small towns in Bumfuck, Nowhere decided they didn't like a particular magazine. The only other alternative is that 7-11 would have to stop selling the magazine everywhere, because it can't take the risk of having a second violation that would qualify for RICO.
Anyone who thinks the PATRIOT ACT goes too far should really be far more worried about RICO. It can do far greater damage. There are parts of RICO that are probably a good thing; it certainly makes it easier to take down criminal organizations. But the law needs to be changed if we are going to preserve our freedoms.
I know that employees of the evil empire (the MS one) have to take an online course (with cool animation) where they learn how you are never never ever supposed to do stuff with data unless the customer has explicitly agreed to it. Everyone at MS has to take the course this year.
Obviously if they didn't have trouble with their people doing this kind of thing, there would be no such course. Apparently there are even "Privacy Officers" where one can do the appropriate whistle blowing, I doubt many people would bother though.
Setting up an apparatus like that to enforce behavior makes subverting the process that much cooler.
Very interesting. Didn't realize that RICO was so draconian.
Another case of lawmakers throwing out the baby with the bathwater, SARBOX comes to mind as well.
Newsflash: Greedy people try to squeeze blood from stones
Heh, it's like that a lot of places, such as gas stations with car washes (they expect you to push the car wash tickets and lotteries), with restaurants (super size), and these are international chains... doesn't surprise me that others are doing this as well. There is actually a lot of coersion used on the managers of these places and there's not much you can do about it unless you own the outlet independantly, and even then you can get cut off of distributor chains, etc.
In soviet U.S., service signs up for you!
Once a few of these huge mega-corps get a good fucking-over, maybe they'll start to behave a bit. As it is now, the government lets them do whatever they want. I'd love to see them seize all the assets of Microsoft.
I know for a fact I was at Best Buy a few years back, and they did have MSN signs all over, and were selling computers with "free*" MSN subscriptions. I wouldn't buy a PC at Best Buy, and I pay cash for stuff (good luck getting extra cash out of someone making a cash purchase 8-), but I have heard before about Best Buy's policy of basically setting such high sales requirements that people have to cheat to meet them.
*costs a bunch of cash
From reading so far, and especially from a prior post from a Best Buy employee, it doesn't appear that Microsoft knew that these customers were being signed up without concent.
It sounds more like Best Buy had an overly agressive internal campaign to refer as many sales as possible to MSN, and did whatever they could to make it happen.
Is Microsoft guilty if it had no knowledge of this? Further, did Microsoft make it easy for people to cancel the service?
If Microsoft played fair when someone asked to cancel, and if they honestly didn't know how aggressive Best Buy was, then I can't fault them for this.
-David
I worked in a call center that did support for MSNIA. That was horrible in itself, but I had to deal with people who had anywhere from 2-8 extra accounts that were created each time they went to best buy. Some of the people didn't even have a computer! In one case an elderly lady bought a microwave, which didn't work, then returned for a new one and ended up with 2 dial-up accounts... which she didn't notice for a year! Now that last part is her fault, but I arranged for a full refund because I hate microsoft and their scummy ways.
A similar incident happened to the buyer of a cell phone at a Reno Best Buy store, the case says. Microsoft withdrew monthly MSN payments from her debit card account for 17 months without her knowledge or permission, the allegations say.
How do you not know that you're missing $20 every month for a year and a half? Seriously, look at your bank statements every now and then.
Outlandish?
NO
In my humble opinion this WAS petty crime, it was organized, and it was "interstate". RICO applies.
At best the practice was a case of willfull disregard of consumers' rights.
In cases of death, willful disregard is called second-desgree manslaughter. Why should 'willful-disregard-theft' NOT be a crime?
I bought an HP Pavilion in summer 2000 at Best Buy and a year later I saw a $15 charge for MSN dial-up on my cc statement. At least back then it was charged against a credit card and not withdrawn from your bank account.
Ah, the good old days
How about no more card-not-present transactions for a few years? (No card-not-present means no online business)
"The use-mention distinction" is not "enforced here."
Six months later MSN billed my card. I called MSN and asked what was going on, they told me that I'd signed up through Best Buy. I said "Oh no I didn't". They canceled the membership and refunded my money.
Lawsuits going all the way to the supreme court? Sounds like some lawyers getting richer.
Even from the newspaper ads I remember it being perfectly clear that they weren't just giving you a $300 rebate (or coupon or whatever) for free, they were giving it to you in exchange for signing up for three years of MSN. Heck, the ads even tell you how much it costs to sign up for the MSN contract.
On the other hand, I really hated this promotion because they advertised everything using the price after the "rebate" rather than the actual price of the item. Pay $700 to get $300 in return? Such a deal!
I've said before that Microsoft could quite viably be charged under RICO for Ballmer's "Nice OS, would be a shame to see anything happen to it," noises towards Linux, and concievably for the Novell deal as well. Protectionism is protectionism, after all.
People can see the Sherman Act as being anticapitalist if they want, but as far as I'm concerned gangsters on the other hand have no place within a principled economic system. If Ballmer is going to insist on continuing to behave like a gangster, then he should by all means be prosecuted as one.
Way more interesting than another bash MS case is the link to the US Cort of Appeals setting up their own wiki. Now we will be seeing reports that the rate of convictions has tripled over the last decade.
I use a local ISP with QWest. I advised someone going DSL to do the same. The first guy told her there were alternate ISPs available "but he couldn't find the list right now." (My person is old and probably sounds it.) When I told her to assert herself, the second girl stated that my ISP specifically wasn't available for her location. So she accepted MSN. Since I know from discussing an outage about five years ago that my node is probably a few hundred yards from her place and a hell of a lot closer to her than it is to me, that sounded fishy. I called my ISP and they said her location certainly was covered. I had her call the ISP and tell them what QWest was telling her.
I hope a bunch of local ISPs are collaborating to collect these accounts and get together with their state Attorney Generals to sue QWest/MSN's ass.
my wife a had similar problem with BestBuy signing her up for magazines she didn't ask for or want. when they started charging for the "free" subscription, it caused a series of checks to bounce and it turned into one bad domino effect after another.
she eventually got them canceled, the money refunded, and fees returned, but it was a nightmare.
it should never have happened.
except that it's not. when you buy a computer they try to sign you up for internet services. when you say yes you're asked to swipe your credit card FOR THE SERVICE. if that weren't a big enough bell, WHILE the swipe machine is asking you for the card, it explicitly states that if you don't cancel within the trial deadline they will autobill you for the first month's service. IIRC, the wording is something like "by signing below, I agree to be automatically billed for service after my 15-day trial expires."
I have no sympathy for people who refuse to read; if you're responsible enough to own a credit card, you should be damn well responsible enough to know what you're signing.
-- Joshua
Very interesting. Didn't realize that RICO was so draconian.
Because it isn't.
Ignore this fool and read the Wikipedia overview of RICO linked to repeatedly above.
Rape in prison is a rights violation whether or not some legislators and a judge somewhere say it's "the law."