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."

Comments

this says alot about the companies involved

[3seas]

.... 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.

Sign-ups

[king-manic]

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.

Re:Sign-ups

[slackmaster2000]

Yeah, but when the corporation doesn't explicitly tell their employees to make sure that customers understand what they're signing up for, and that corporation goes so far as to make it an incentive for employees to hard sell, then the problem is corporate policy, not a rogue employee.

You're right, a single guy getting charged for a month of MSN isn't going to raise the stock price of Microsoft or Best buy. This is a class action lawsuit which means there are many guys (and gals) who got charged for a service they didn't know they were signing up for. Add it all up, and the companies may very well have made a great deal of money from the way their employees are trained. And it's pretty easy to speculate that this problem isn't limited to being sneaky about MSN subscriptions. I think it's pretty clear that these companies, like many others, use all sorts of methods to extract money unnecessarily from customers. (service contract anyone?)

The name AOL has come up a lot on Slashdot today, and they're a great example of using underhanded tactics like this to generate revenue. Either their billing computer was perpetually broken, or I just happen to know a whole lot of people who had a whole lot of trouble canceling their service with the company in such a way that they would actually stop being billed (all automatic bill pay customers too, go figure).

I myself have fallen victim to a similar scheme by Discover card. Somehow I was enrolled in some kind of insurance program "trial", and then after a year I started getting billed for it. I have no idea how they did it, but I'd be willing to bet that they have me on record somewhere as saying "yeah, ok" to *something* that had this insurance program tagged on. And I probably got myself into the mess by calling them for a completely unrelated customer service issue, during which they always try to sell something and I don't want to be rude to them because, hey, my finances are at their mercy. So I got them to cancel the program from my account and refund the money that they'd been charging for several months (I don't carry a balance on the card so don't check the bill like I should). Getting them to do so was no picnic though. I was told for several minutes that I needed the service or my life would eventually deteriorate into a hellish nightmare. Then I was told that they would cancel the service, but not refund any of my money. After all, they provided the service that I didn't know that I was getting. I was literally told that they couldn't do it. So I kept asking and asking and eventually the person I was talking to gave in and reset my card balance back to zero and then gave me a little mini-lecture about responsibility. (credit card companies are the worst when it comes to these kinds of scams. they know that a certain percentage of people aren't going to notice or complain when they do things like arbitrarily raise an interest rate, and they take it to the bank...that they own)

Make no mistake. When employees of large corporations act like this, it's very rarely the problem of a single bad egg. These people are trained to get money from you above all else. Hell, they know you'll be back anyhow. We're all suckers. Even if a company hides behind an excuse like, "we don't tell them to be dishonest, we simply offer a sales incentive", it's total bullshit.

Everyone knows that everyone knows, but nobody can seem to figure out how to fix it.

Re:Good

[Original Replica]

actually charging my credit card (provided to ANOTHER COMPANY) is inexcusable.

How does that actually work as far as your credit card contract, I wonder? if I am the only one authorized to make a purchase with my card, how can BestBuy make a purchase for me?

Text "RINGTONE" to 35576

[Original Replica]

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.

Silverman has his head up his keister

[Excelcia]

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.

MS Violating Data Privacy?

[Anonymous Coward]

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.

Re:Outlandish result

[Darundal]

A dissenting opinion would be written by one or all of the justices who disagreed with the majority opinion. A concurring opinion states is from a justice(s) who voted with the majority of the other justices (and hence, voted for the ruling that is final) stating that yes, they do agree with the majority on what should happen, but disagree on why. Sometimes, the person who ends up writing the concurring opinion actually ended up having the same idea about what and why, but the person who wrote the majority opinion (by default the Chief Justice) or whoever is assigned to write the opinion (who is assigned by the Chief Justice) wrote it in such a way that everyone else disagrees with large pieces or all of it. Sometimes, a justices will vote the opposite way that they feel, with the sole goal of getting to write the majority opinion, because then they can water it down so that the opinion leaves broad room for interpretation.

Re:This is definitely true, Revelations inside

[Anonymous Coward]

I'm sorry. I would love to just go out and show to the world all the evil Best Buy made me think I had to do. It's bad when you attend college and live on your own and rely on a workplace which constantly reinforces how much better you are here instead of there. Even today I am afraid of Best Buy's reaches. Best Buy loves to sue the hell out of anybody who threatens them and I am in no position to fend off their dogs.

I actually have a slashdot account, read this website approx 6 times a day for about 3 years now, but posted this anonymous coward to limit any back tracking. I swear this is true, I understand fully those who may not believe it, but my word is all I can give and hope that is enough. Just please realize, Microsoft has nothing to do with this. Microsoft terminated the relationship because of issues like these.