Microsoft Sued Over Vista-To-XP Downgrade Fees

Krojack writes with this excerpt from Computerworld: "Los Angeles resident Emma Alvarado charged Microsoft with multiple violations of Washington state's unfair business practices and consumer protection laws over its policy of barring computer makers from continuing to offer XP on new PCs after Vista's early-2007 launch. Alvarado is seeking compensatory damages and wants the case declared a class-action suit. ... Irked at having to pay a fee for downgrading a new Lenovo notebook to XP, Alvarado said that Microsoft had used its position as the dominant operating system maker to 'require consumers to purchase computers pre-installed with the Vista operating system and to pay additional sums to "downgrade" to the Windows XP operating system.'"

Comments

less freedom if you're a monopolist

[Trepidity]

If Microsoft were letting OEMs sell either version of Windows for vaguely similar prices, it'd be okay. The issue is that they're effectively giving away Vista, while charging for XP. Now companies often can give things away as loss leaders, but monopolists are more constrained in whether they can undertake that sort of activity.

This case is somewhat unusual because most of the lawsuits regarding dumping are e.g. giving away IE to kill Netscape, not giving away one of your products to try to kill one of your own other products. But it's possible that Washington state business law (vs. federal anti-trust law) has something that reaches that.

XP supply inconsistencies = legal trouble

[ErkDemon]

Yep, MS could get into trouble for market abuse for their current inconsistencies over who is "allowed" XP and who isn't.

If they'd simply pulled the plug on XP totally, and said, "that's it, we aren't going to sell XP any more, because it's old and we don't want to be lumbered with the after-sales support forever", then that might be a legitimate manufacturer's decision.

But they didn't do that, because they didn't want to lose the netbook market. So they said that netbook manufacturers could continue to buy, install, and sell-on XP, but laptop manufacturers couldn't. When you say to a company, "We have a product, we're selling it to other people, but we refuse to sell it to you to work with your products, because we now want you to buy a different product from us", then that starts to get dodgy.

It's a bit like if a car-seat manufacturer has two ranges of car seats, their older smaller range and their new wider deluxe range. They want manufacturers to build the wider seats into all new luxury cars that can take them, but if they discontinue the older range, they'll lose the section of the market that supplies cars where the newer seats don't physically fit. So they continue to sell both ranges, but tell manufacturers that they are "banned" from selling the older seats fitted to the larger cars, even if those same cars have been sold fitted with those same seats in the past. That level of interference is getting into "illegal restraint of trade" territory.

The question is, how much control should a dominant component manufacturer have over how their products are used? Should they be allowed to micromanage what people do with their products with these sorts of restrictions and conditions? If a product has already been certified for XP, should they be allowed to then tell a manufacturer that they can still buy copies of XP, but they're are no longer allowed to preinstall them on those particular machines because new MS policy is that those particular customers should be buying something else? Even if this upsets both the suppliers and the customers?

Now to me, it sounds like MS are probably legally in the wrong here (as they have been so many times before when it comes to OEM contracts). And they probably know that they're in the wrong, but figure that the stakes here are so high that they'd rather break the law and worry about the consequences later ... after all, none of their suppliers are going to want to sue them for fear of unofficial retaliation.

So this customer has decided, look, this is complete s**t - I should be able to buy the current software that I want on the machine that I want, without my supplier saying that they aren't allowed to do that because of some arbitrary rule imposed illegally on them by MS. So she figures, (a) it's unlawful and unfair, (b) someone should do something about it, (c) the laptop manufacturers won't, (d) she has the receipts that prove that this illegal behaviour by MS has cost her money, and (e) if it's illegal, and she's provably been damaged by it, then she's in a position to take a stand and sue, and maybe have the court ruling force MS to stop breaking the law (as she sees it).